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Privacy, Investing Alpha, and the CEO's Mother-in-Law

Written by: Paul Kedrosky

Article Overview: Much of investing is a search for hard-to-get data that can give you an edge, or alpha. That quest for alpha via better data is one of the themes of my Money:Tech 2008 conference, and it is the topic of an unusual and fascinating article in Wednesday's Wall Street Journal.

Privacy, Investing Alpha, and the CEO's Mother-in-Law

Much of investing is a search for hard-to-get data that can give you an edge, or alpha. That quest for alpha via better data is one of the themes of my Money:Tech 2008 conference, and it is the topic of an unusual and fascinating article in Wednesday's Wall Street Journal.
The gist: A new stream of financial research ties performance in public companies to increasingly personal data about CEOs and executives, from recent mega-mansion purchases, to size of CEO pictures in reports, to deaths in the family. All of these studies purport to show statistically significant impacts from this personal information, which is leading, understandably to a growing debate -- one that I had planned to highlight in the M:T conference program next year.

As an aside, I can't help but point out that the "death" paper showed that deaths in the immediate family led to poorer performance, with one exception:

Only a mother-in-law's death was correlated with an upturn, and it was too small to be statistically significant. Prof. Wolfenzon says they included the mother-in-law as a rationality check.

"It's a little bit funny that the mother-in-law dying doesn't distract the CEO," he said -- hastening to add that his own mother-in-law is vitally important to his productivity: "As we speak, she's taking care of my kids."

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Article Tags: ceo, ceos, deaths, gist, immediate family, little bit, money, mother in law, new stream, personal data, productivity, rationality, research ties, upturn, wall street, wall street journal



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So much for a family life - I can't imagine these CEOs get much quality family time. It's funny, although these are all CEOs of successful companies - how successful are they themselves? I guess if you define success as being the CEO then it's fine, but for me success shouldn't come at the cost of spending time with your family and friends.
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Re: Invest in Real Estate or Stocks? - I want to reiterate what Barb said, be prepared for the long run. Investing in stocks and real estate myself, I highly recommend learning as much as you can about both. Find a great mentor in both areas as well if you can. But always, always, remember that you buy both and WAIT. There's no flipping around or you can lose alot! Jude
Re: Meltdown in the Financial Markets - I really wonder if all this was "set up" just to help Obama get the presidency. Whatever the real story, the incompetence that has been on display by our government just boggles the mind. Hopefully the CEOs and the officers and such like people from these lenders and banks do NOT get their golden parachutes, as they certainly don't deserve anything!


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