Category: Venture Capital

Predicting CEO Actions and Financial Outcomes Based On CEO Personality

Predicting CEO Actions and Financial Outcomes Based On CEO Personality

Could we have predicted that Elon Musk’s restlessness would have led to his founding of (SpaceX) even though he more than had his hands full with Tesla? How about his latest company – “The Boring Company” – could its founding have been predicted? The answer is “maybe”.

Are we surprised by Musk’s emotionless approach to firing certain employees (as documented by WIRED)? Not in the least. Musk’s personality profile suggests he values self interest completely over co-worker interests (Musk scores 0% on “Agreeableness”, the attribute that speaks to the degree in which one values self-interest over other peoples’ interests). 

Elon Musk’s “The Boring Company” tunnel. https://www.boringcompany.com/

For much of 2018 we at CEORater have experimented with personality analytics as applied to public company CEOs. We partner with IBM’s Watson Group for the raw analysis of public documents – primarily earnings call transcripts and analyst day transcripts. We then apply our own business rules as informed by our experience as well as work out of Stanford University (led by David Larcker), the University of Chicago, the Stern School of Management and Harvard University. 

It’s early days, but we believe that if we were to analyze every public company CEO we would eventually identify personality traits that correlate to financial performance and very well may be predictive of financial operating performance at the company level. Larker’s research suggests as much. 

Mr. Musk’s full personality profile may be accessed HERE.

Wired’s recent profile of Mr. Musk may be found HERE.

Elon Musk: “Openness” Attribute.
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GM’s Mary Barra vs. Tesla’s Elon Musk – A CEO Personality Comparison

GM’s Mary Barra vs. Tesla’s Elon Musk – A CEO Personality Comparison

Our full analysis comparing the personality traits of Mary Barra vs. Elon Musk may be found HERE. Reach us at info@ceorater.com to inquire about our CEO Personality Analytics service. If you wish to run a query on a particular CEO, send us an email at the above address and be sure to include CEO name and company ticker symbol.

Here’s a teaser:

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Don’t Believe The Hype

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Cryptocurrency firms fell from grace (Chain and Lightyear merged to form Interstellar) as valuations and expectations got too far ahead of themselves for both the various “coin” firms as well as for blockchain – the distributed database technology that enables digital currency transactions. We are long-term bullish on each – particularly blockchain.

The crypto space isn’t the only sector that grew overheated as reality has set in to the autonomous vehicle space. Apparently robot cars won’t be shuttling all of humanity to and fro by 2025. We expect that autonomous vehicle startups will suffer a materially adverse impact to their respective valuations.

The two technology hype scenarios got us thinking about previous technology hype cycles. Thus, we created the TEK2day, CEORater “Technology Hype Curve” to visually represent an all too familiar pattern as it relates to hyping new technologies. Click HERE to download the Technology Hype Curve graphic.

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