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MC's avatar

I'll be honest: this doesn't convince me. Correlation is not causation.

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The Onveston Letter's avatar

Read the book I recommended. In no earnings call transcripts of a well-run company you'll find swearwords.

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Bartholomew's avatar

Why do you need causation?

Height does not cause someone to excel at basketball, but if you're 5'4" there's reason to doubt future success in the NBA. Similarly, bad language may not cause poor performance, but could theoretically be an indicator that there's a lack of discipline or a reason that they're overly stressed.

Real life is not a randomized control trial.

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MC's avatar

I don't get this argument.

If you ate rice the day of the earnings call, and the results of the companies you are analyzing were poor, would you correlate the two events?

I'm sure there's more substance to the argument described in the recommended book, which I haven't read yet.

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