Close this search box.
Close this search box.

Confident-Sounding CEOs More Likely to Sell their Shares, Study Finds

And they tend to buy more company stock when they're downbeat.

Quitting while you’re ahead is a golden rule in gambling circles. And it also appears to be a key tactic adopted by CEOs when managing their investment portfolios.

CEOs who sound more optimistic about their business’ prospects at results briefings are more likely to go ahead and sell their company’s shares, rather than buy more, a new survey suggests.

Researchers from Lehigh University, University of Central Missouri and Hong Kong University tested their hypothesis by gauging the tone managers used during 65,000 conference calls conducted between 2002 and 2012. Their analysis involved using a computer program to scan transcripts for words identified as positive, such as “approve”, and negative, such as “never”.

“Our univariate results show that corporate insiders buy company shares following negative-tone conference calls, and sell shares following positive-tone conference calls,” their research, which will appear in the upcoming issue of Financial Management, found.


The inverse call tone and trading pattern held for both managers’ introductory sessions and subsequent question and answer sessions with analysts and journalists, they added.

The reasoning may not be altogether concerning: it’s always better to sell your shares when a company’s doing well, rather than when it’s doing poorly. And the study didn’t appear to distinguish between whether its CEO subjects only sold a portion of their shares or dumped their entire holding–a move that would spark far greater alarm.

Investors can be guilty of adopting a heard mentality and will often punish companies severely should they miss earnings guidance, offering CEOs an opportunity to get in cheap—or at least show the market they’re confident in their ability to improve a company’s fortunes.

Still, selling shares at any time indicates that managers aren’t 100% sure they’ll keep heading north. And just because they sound upbeat on a conference call doesn’t necessarily mean all is well.

Interestingly, the researchers found that analysts weren’t the only ones to gain some investment insights.

“Our findings suggest that managers learn from analyst feedback and adjust their post-call trades accordingly,” they said.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.