<p>Amazing how much admit rate resembles price activity in the stock market. Prices go up and down, companies are overvalued and undervalued, all based on perceived value that may or may not comport with reality.</p>
<p>Think about it. 10 years ago, Yahoo was the smart buy. Apple was not on a lot of stock buyers’ shopping lists. Today? Yahoo is laying off employees in an effort to boost earnings, and Apple owns it all.</p>
<p>It would be one thing if far-reaching changes in personnel or corporate strategy were responsible for the market’s reassessment of value. But both companies are (or, at least, until recently, were) pretty much the same companies they were 10 years ago. People just value them differently now.</p>
<p>About 10 years ago, I “bought” into a university (UChicago) when its “stock price” (as reflected by its admit rate) was quite low. In fact, by almost any objective measure, it was ludicrously undervalued. Today, UChicago’s admit rate brings it closer to “fair value”–while leaving it still undervalued, I believe, with respect to its peer group. But undervalued, overvalued, fairly valued–the UChicago now attracting so many desperate applicants is exactly the same UChicago that was pretty easy to get into when I applied.</p>
<p>So what’s my point? Ignore admit rates. Put them out of thought. Do not make the mistake of correlating a high (or low) admit rate with high or low quality or even prestige–especially prestige, which can change in a blink. </p>
<p>When I was applying to colleges, Duke was THE hot school. Which is why I applied to Duke. So when I was accepted by Duke and then decided to attend Chicago, people thought I was nuts. Ten years later, Duke is still pretty hot, but not as incandescent as it was. UChicago, meanwhile, has gone supernova. If I were in high school today choosing UChicago over Duke, no one would think I was nuts. Someone or other might disagree with the choice, but no one would find it inexplicable as some did back in the day. </p>
<p>So what has changed? Is UChicago better than it was? Has Duke slipped? No and no. Both institutions are virtually unchanged. All that’s changed–and continues to change–is the market’s perception of their relative value. </p>
<p>Bottom line: Markets assign value based on the crowd’s perception of value and crowds are often wrong before getting it right. So ignore the crowd. Think for yourself. When and if the crowd starts to see it as you do, you won’t care anyway.</p>