How High CEO Optimism Drives Stock Outperformance

Public US-based companies led by highly optimistic CEOs have outperformed their peers over the last two decades. Our preliminary analysis, using the LSEG (London Stock Exchange Group) MarketPsych Transcripts Analytics data feed, reveals that companies helmed by the top 5% of CEOs, in terms of optimism levels during Earnings Calls, exceeded their peers' future stock performance by an average of 0.5% per month. The optimism metric in the data feed is one of 13 emotional dimensions evaluated in each sentence of the earnings calls. It utilises an LLM-based architecture designed to assess the probability of speakers conveying specific emotions.