Generation 2.0: Do you want to make more money? A good friend is all you need

Are you tired to watch your money go up and down?... keep in touch with your schoolmates.

Harvard Business School's Lauren Cohen and Christopher J. Malloy, along with University of Chicago colleague Andrea Frazzini, investigated the ties between more than 1,800 sell-side analysts and the management of public firms, and the subsequent performance of stock recommendations. The study is titled "Sell-side school ties" and suggests that agents in financial markets can gain informational advantages through social networks. Data on the educational background of sell-side analysts and senior corporate officers shows that analysts outperform by up to 6.60% per year on their stock recommendations when they have an educational link to a company.

It seems to be what happened with Raj Rajaratnam.

In 2009 he was arrested by the FBI on allegations of insider trading and on May 11, 2011 was found guilty of conspiracy and securities fraudnews. With more than $60 million, it was the largest hedge fund insider trading case in United States history. Rajaratnam allegedly profited from information received from Robert Moffat, an IBM executive, Rajiv Goel, an Intel Capital executive, and Anil Kumar, a McKinsey & Company executive. It was reported that Rajaratnam, Goel and Kumar were all of class of 1983 from Wharton business school.

According to a famous saying, who finds a friend, finds a treasure!