Sustainable Local Markets via Slow Abacus-Driven Trading

Periodically, I wonder what my life would have been had I actually pursued graduate school after undergrad. I wonder things, like, would I have turned crunchier over the years as a Berkeleyan lifer? Would I have gotten really into bikes, seitan, and patchouli? Would I own IKEA furniture exclusively? Would I hang out at coffee shops, unpack a moleskine, something by Robert Keohane, but in fact spend the whole time on youtube, watching Aimee Mann’s Christmas trilogy in July just to be contrary, wishing it were on Spotify so my friends could see how contrary I am? Would I have spent, say, 350 of my past weekends trying to just once get published in McSweeney’s or Mother Jones? Or would I have started a push for Slow Abacus-Driven Trading in an effort to define sustainable local trading markets?

Actually, there’s a McSweeney‘s idea right there, for anyone who wants it.

I worry though, as I did when I was 22, that grad school would just be a place for me to tread water. I’d read some things I have wanted to read, publish some unfresh takes on existing research for a couple of years, eat a lot of quinoa, only to be caught unawares at year five with the pressure of generating an original, defensible idea, as the culmination of dicking around for five years doing “research.” When I realized that practically everything worthwhile’s been said already, that only about 0.ooo1% of research published annually leads to anything productive, what would I have done? Where would I have looked?

Would I have published something about the tendency of CEOs to dye their hair when grey starts to appear, linking it to a desire to hide information from investors and ultimately investment fraud? Would I have delved into the wardrobe of female managers, examining the correlation between wearing pant suits for 3 or more days of the week and the perception of aggression and masculinity? Would I have followed up by adding a second variable, the pointiness of the pointy-toed heels worn by these same female managers? Would I have tried to find ties between CEO signature size, narcissism, and investment returns?

Hey wait — that last one has actually been published! Fo’ realz: “Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance,”  Charles Ham, Nicholas Seybert, and Sean Wang. November 2012. The paper positively reeks of publishing something in order to get published:


Using the size of the CEO signature on annual SEC filings to measure CEO narcissism, we find that narcissism is positively correlated with several measures of firm overinvestment and that abnormally high investments by narcissists predict lower future revenues and lower sales growth. Narcissistic CEOs also deliver worse current performance as measured by return on assets, particularly for firms in early life-cycle stages with uncertain operating environments where a CEO’s decisions are most likely to impact the firm’s future value.

I’d like to mock this, but it mocks itself.

There are certain limitations of our study. First, because of data and cost limitations, our sample is necessarily restricted to a subset of firms. While we believe the S&P 500 are important firms in their own right, it is unclear whether narcissism would have the same effects at other companies. Second, our proxy for narcissism, CEO signature size, is subject to influence from a variety of factors. Physical characteristics of the CEO, their education and upbringing, and the way they learned to write all affect signature size. After controlling for age and gender, and standardizing by the number of letters in the signature, we assume that these other sources of variation are randomly distributed between CEOs and simply induce noise in our measure of narcissism. Our robustness tests using an entirely different measure of signature size that yields similar results should also help to allay these concerns.

Those are really the only limitations you guys could come up with? And the validity of signature size as a measure of narcissism isn’t even #1 on  your list of potential flaws?? “These other sources of variability” of physical characteristics, education, and upbringing are “simply noise” in the measure of signature size???



There is only one real conclusion here, unfortunately. According to a similar vein of inane, reverse logic, these guys all have giant signatures.

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