Some researchers at the Harvard Business School recently found a clever way to assess what CEOs' plans for their companies really are. They looked through the transcripts of more than 150,000 earnings calls to see what the boss most had on his mind at that point. Then they sorted the words and phrases that had been used by different sectors.
The results: CEOs of pharmaceutical and apparel companies tended to take a longer view of things. Their conference calls were peppered with terms like years, long run and trend. At the other end of the spectrum were CEOs from electronic-equipment companies and banks, whose word choices reflected a much more short-term view. They tended to say things like weeks, short run and latter half of the year.
The researchers also followed up by looking at the performance of the companies' stocks after the earnings calls. Not surprisingly, the CEOs who revealed themselves to be more short-term-oriented also ended up with stocks that were more volatile.
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