, Columnist
If Your CEO Talks Like Kant, Think Twice Before Investing
Quantitative research by Nomura shows companies whose executives use the most complex language on earnings calls produce lower returns.
Let me explain.
Photographer: Andrew Burton/Getty Images
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We’re used to crunching numbers in investments. With the improvement in technology to analyze language, Big Data now allows us to start crunching words as well, and it turns out to be very useful. If you want to get someone to invest, make your case in clear language. And for those thinking of investing, if someone pitching to you can’t explain their offer in plain speech, that is a sign not to invest.