Executive Pronoun Shift
In plain terms
When executives stop saying 'we/our' and shift to 'I/my/the company' on earnings calls, the stock tends to drop over the next 1-3 months.
How it works
Distancing language — shifting from inclusive 'we/our' to 'I/my/the company' — is a credibility marker; Larcker-Zakolyukina 2012 link it to later restatements + negative drift.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Earnings call transcripts
Full earnings-call transcripts (prepared + Q&A), tokenised.
Expected edge
- Reported return
- ~3% over 30-90d on top-decile pronoun shift
- Tested over
- T+1 to T+90d
Larcker-Zakolyukina 2012: pronoun distancing predicts ~3% underperformance + 2× restatement probability.
Related families
When managers' call language gets harder to read (rising Fog index) Q/Q, they're hiding bad news. Predicts 12-month underperformance.
Filters out analyst speech and just measures how often the CEO/CFO use uncertainty words ('may', 'could'). High uncertainty = bearish.
Read each year's 10-K through a finance-specific positive/negative word filter. Companies whose tone got more positive year-over-year tend to outperform after the filing date; those whose tone got more negative tend to lag.
Explore Executive Pronoun Shift on alphactor.ai
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