rkbabang Posted December 1, 2009 Share Posted December 1, 2009 According to this Biglari is the youngest CEO out of all the Russell 3,000 companies. The oldest is 94 year old Walter Zable of Cubic Corp. I thought the chart was interesting. The 94-year-old CEO --Eric Link to comment Share on other sites More sharing options...
Parsad Posted December 1, 2009 Share Posted December 1, 2009 The kid's amazing! Cheers! Link to comment Share on other sites More sharing options...
twacowfca Posted December 3, 2009 Share Posted December 3, 2009 The age distribution of the CEO's prompts a question, the answer to which may be helpful in predicting the returns of individual stocks: have returns been better in the decile of companies with the oldest CEO's compared to the decile with the youngest CEO's and the average return for the group? Can anyone provide more info about who did the graph and if the data can be obtained to perform the analysis ? Or is this info readily available? Link to comment Share on other sites More sharing options...
nodnub Posted December 3, 2009 Share Posted December 3, 2009 That is an interesting question but it will not provide much clue for the expected performance of any one individual company based on the age of their CEO. Link to comment Share on other sites More sharing options...
twacowfca Posted December 3, 2009 Share Posted December 3, 2009 There are many reasons why the answer to my question may be helpful in predicting future returns e.g. : CEO's past normal retirement age may have good track records, control their companies, run companies that have long term competitive advantages not be fly by night firms etc. Some of these qualities may be impossible to measure in other ways. Alternatively, younger CEO's may be dynamic, more apt to run growth cos. Etc. Of course, there may be survivor bias in such an analysis but this could be addressed in a prospective analysis. Link to comment Share on other sites More sharing options...
Junto Posted December 4, 2009 Share Posted December 4, 2009 There are many reasons why the answer to my question may be helpful in predicting future returns e.g. : CEO's past normal retirement age may have good track records, control their companies, run companies that have long term competitive advantages not be fly by night firms etc. Some of these qualities may be impossible to measure in other ways. Alternatively, younger CEO's may be dynamic, more apt to run growth cos. Etc. Of course, there may be survivor bias in such an analysis but this could be addressed in a prospective analysis. You always have to remember because something is correlated does not mean it is a causal relationship. Link to comment Share on other sites More sharing options...
twacowfca Posted December 4, 2009 Share Posted December 4, 2009 Yes, correlation doesn' mean causalty, but it can be a good hint for looking deeper, especially if the correlation and the confidence level is high. Then a multivariate analysis might provide more info about whether or not the correlation was spurious. Theory and history would suggest that a long track record of doing something successfully is a powerful predictor of future success. But how long is too long? If CEO's play a role in the success in their cos, age may be a useful proxy for experience, a potentially powerful predictor. Or, extreme age may be a negative predictor of success related to failing capacity, surely an important question for members of this board. Link to comment Share on other sites More sharing options...
nodnub Posted December 4, 2009 Share Posted December 4, 2009 If CEO's play a role in the success in their cos, age may be a useful proxy for experience, a potentially powerful predictor. Or, extreme age may be a negative predictor of success related to failing capacity, surely an important question for members of this board. It may be the case. Though if indeed that is the case, it will be a generalization that only applies to large baskets of companies and ceo's. Unless you plan to build an index fund of stocks with CEOs of a certain age then I don't think you will see any benefit. And that's not how we invest ... we invest in individual companies not baskets of thousands (unless you are an index investor). Each company you invest in for the next 20 years could be an exception to the general rule that you establish with these statistics. You have to analyze each situation on its merits. Some 30 year old CEOs will have more patience, wisdom and hard-earned experience than some 50 year old CEOs that have coasted through life in easy positions. I don't think any of that information will let you draw any useful conclusions about single individual companies. Link to comment Share on other sites More sharing options...
twacowfca Posted December 4, 2009 Share Posted December 4, 2009 ALL information may be useful for prediction, according to Bayes theorem. IMHO using methodology based on this theorem is helpful in analyzing individual stocks, especially for tracking changing predictors after buying a stock. Link to comment Share on other sites More sharing options...
nodnub Posted December 4, 2009 Share Posted December 4, 2009 ALL information may be useful for prediction, according to Bayes theorem. I'm suggesting that the confidence of the prediction for when applied to an individual company will approach zero. Link to comment Share on other sites More sharing options...
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