In an op-ed, Prof. Baruch Lev explains the impact the time of day has on earnings calls
October 01, 2013
Excerpt from Harvard Business Review -- "We analyzed the earnings calls of 2,113 publicly held U.S. firms based in the Eastern and Central time zones from January 2001 to June 2007—a total of 26,585 calls. We used linguistic algorithms to measure positivity, negativity, and uncertainty during the Q&A. Tone grew more negative and less resolute as the morning progressed and improved slightly at midday, presumably because participants recharged at lunch. Negativity increased during the afternoon but fell off after the market’s closing bell—probably because the close reduced participants’ stress. Overall, calls originating late in the afternoon were more negative, irritable, and combative than calls made early in the morning, even after controlling for factors such as industry norms, financial distress, growth opportunities, and the news that companies were reporting."