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Software “detects CEO emotions, predicts financial performance”

blogs.wsj.com

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Re: Software “detects CEO emotions, predicts financial performance”

#31

Post by ucha »

Terr_ wrote: post #25

> CEOs whose faces during a media interview showed disgust [...] were associated with a 9.3% boost in overall profits in the following quarter. I'm surprised I haven't seen anyone say "Regression to the mean" yet. Suppose the CEO gets obviously-scowly whenever their last quarter was abnormally bad... Well, the next quarter will naturally tend to be better, purely because it's a return to a "normal" state of affairs.…

I have never heard of regression towards the mean in profits. It certainly doesn't exist for stock prices. You would actually tend to observe trends - the opposite phenomenon. For example, Google would have a 20% increase in profits on one quarter and another similar increase the following quarter but not a sudden loss caused by a regression to the mean.

Re: Software “detects CEO emotions, predicts financial performance”

#33

Post by IkmoIkmo »

Create a hedge fund and run your proprietary algorithm. If you succeed over the long term and generate a consistent market premium for a given risk exposure, you've got a story. If you don't do this, you've got an unproven claim like many others in history, the vast majority of which were proven false when put into practice.

Re: Software “detects CEO emotions, predicts financial performance”

#34

Post by DannoHung »

Terr_ wrote: post #25

> CEOs whose faces during a media interview showed disgust [...] were associated with a 9.3% boost in overall profits in the following quarter. I'm surprised I haven't seen anyone say "Regression to the mean" yet. Suppose the CEO gets obviously-scowly whenever their last quarter was abnormally bad... Well, the next quarter will naturally tend to be better, purely because it's a return to a "normal" state of affairs.…

Simple question then: Does anyone run a fund based on regression to the mean for quarterly performance?

Re: Software “detects CEO emotions, predicts financial performance”

#35

Post by gfody »

mvidal01 wrote: post #15

Maybe Psychopaths CEO's will be even more common in the future.

The CEO of your company is a paid sociopath. I mean that in the nicest way possible, of course, but it is literally their actual job description to place the interests of a soulless legal fiction over the needs and desires of living, breathing, human beings with actual feelings. He or she probably isn’t inherently evil. But if they can find a way to make the company 100% more profitable by firing you, they have to do it. That is exactly what their job is.

- http://heartmindcode.com/2013/08/16/loyalty-and-layoffs

Re: Software “detects CEO emotions, predicts financial performance”

#36

Post by jackcarter »

ucha wrote: post #31
Terr_ wrote: post #25

> CEOs whose faces during a media interview showed disgust [...] were associated with a 9.3% boost in overall profits in the following quarter. I'm surprised I haven't seen anyone say "Regression to the mean" yet. Suppose the CEO gets obviously-scowly whenever their last quarter was abnormally bad... Well, the next quarter will naturally tend to be better, purely because it's a return to a "normal" state of affairs.…

I have never heard of regression towards the mean in profits. It certainly doesn't exist for stock prices. You would actually tend to observe trends - the opposite phenomenon. For example, Google would have a 20% increase in profits on one quarter and another similar increase the following quarter but not a sudden loss caused by a regression to the mean.

Regression to the mean historical growth of X%, then.

Re: Software “detects CEO emotions, predicts financial performance”

#37

Post by cylinder »

IkmoIkmo wrote: post #33

Create a hedge fund and run your proprietary algorithm. If you succeed over the long term and generate a consistent market premium for a given risk exposure, you've got a story. If you don't do this, you've got an unproven claim like many others in history, the vast majority of which were proven false when put into practice.

You don't need to run a hedge fund to perform research. What a horrible mindset you have.

Re: Software “detects CEO emotions, predicts financial performance”

#38

Post by bcook »

cylinder wrote: post #37
IkmoIkmo wrote: post #33

Create a hedge fund and run your proprietary algorithm. If you succeed over the long term and generate a consistent market premium for a given risk exposure, you've got a story. If you don't do this, you've got an unproven claim like many others in history, the vast majority of which were proven false when put into practice.

You don't need to run a hedge fund to perform research. What a horrible mindset you have.

Perhaps not a hedge fund, but something to prove your claims.

(The "horrible mindset" statement is a bit harsh.)

Re: Software “detects CEO emotions, predicts financial performance”

#39

Post by chocolatebunny »

cylinder wrote: post #37
IkmoIkmo wrote: post #33

Create a hedge fund and run your proprietary algorithm. If you succeed over the long term and generate a consistent market premium for a given risk exposure, you've got a story. If you don't do this, you've got an unproven claim like many others in history, the vast majority of which were proven false when put into practice.

You don't need to run a hedge fund to perform research. What a horrible mindset you have.

The problem with pure research in this field is that your decisions will influence the market. How much you invest will influence your returns and how successful you are will influence the behaviour of others in the future.

Re: Software “detects CEO emotions, predicts financial performance”

#40

Post by Terr_ »

ucha wrote: post #31
Terr_ wrote: post #25

> CEOs whose faces during a media interview showed disgust [...] were associated with a 9.3% boost in overall profits in the following quarter. I'm surprised I haven't seen anyone say "Regression to the mean" yet. Suppose the CEO gets obviously-scowly whenever their last quarter was abnormally bad... Well, the next quarter will naturally tend to be better, purely because it's a return to a "normal" state of affairs.…

I have never heard of regression towards the mean in profits. It certainly doesn't exist for stock prices. You would actually tend to observe trends - the opposite phenomenon. For example, Google would have a 20% increase in profits on one quarter and another similar increase the following quarter but not a sudden loss caused by a regression to the mean.

Are you thinking of "the mean" as a single fixed scalar value?
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