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Executive Pronoun Shift

Updated quarterlyData needs: mediumshort only

2011

Loughran, T., McDonald, B. (2011). "When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10-Ks." Journal of Finance, 66(1), 35-65. Extends Larcker & Zakolyukina (2012) JAR on pronoun distancing.

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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.

Live results

0 times picked on its own · 1 times inside a blend (1 beat the stock) · updated 2026-07-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 1 such blended picks (1 of which beat simply holding the stock). Picking it on its own is only one of the ways it shows up.

How its picks scored vs. buy & hold

Each pick is graded on a recent year it was never tuned on, against simply owning the same stock

Where its edge concentrates

Share of picks in each company-size group that beat buy & hold

How often it trades

Active vs. patient. Bars on the left mean it waits for rare setups; bars on the right mean it trades often

Return vs. buy & hold

How much each pick beat or trailed simply owning the stock over the test year (extreme microcap moves trimmed)

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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.

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