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Transcript Tone Drift

Updated dailyData needs: mediumlong onlyshort onlylong short

In plain terms

Measures whether management's language on the earnings call got more positive or negative quarter-over-quarter. Tone drift predicts price drift.

How it works

Loughran-McDonald 2011 + Price et al. 2012: changes in management's linguistic tone on earnings calls predict near-term price drift. Per-call LM tone = (positive − negative) / (positive + negative) on the FULL transcript; signal on quarter-over-quarter delta. Long when tone rose by > 0.05 vs prior call (hold 60-90 days = one quarter), short when tone dropped by > 0.05.

Live results

3 times picked on its own · 140 times inside a blend (135 beat the stock) · updated 2026-06-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 140 such blended picks (135 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

See the source research for the original effect size; a modern replication on new data may be weaker.

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