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My concern is that he didn't calculate internal rate of return (IRR) correctly, and adjust for market conditions when the female CEO was hired/fired. It's hard

by fsk 12y ago

My concern is that he didn't calculate internal rate of return (IRR) correctly, and adjust for market conditions when the female CEO was hired/fired. It's hard to tell without verifying the details. For example, suppose a company hired a female CEO during the market bottom in 2002 and fired her before the crash in 2008. Then, that would cause the "female CEO" statistic to be inflated relative to the S&P 500. If you calculate the relative IRR, it's more correct. I.e., instead of a buy-and-hold S&P 500 investment vs buying/selling when the female CEO is hired/fired, you should instead buy $100k of the S&P 500 and female CEO stock SIMULTANEOUSLY, and then cash out both holdings when the female CEO is fired. If you buy-and-hold the S&P 500 for 12 years vs buy/sell during a female CEO tenure, that's an apples-to-oranges comparison. That isn't properly adjusting for the market conditions when the female CEO was hired/fired. He didn't provide enough details for me to check. I'd need a list of female CEO Tickers, hire/fire dates, and split-and-dividend-adjusted share price on the two dates.

dunster 12y ago
There's a slightly different methodology here, but one consistent with what you're looking for. On one line, buy-and-hold the S&P 500. Re-invest all dividends. You are 100% in the market at all times. On the other line, buy-and-hold all companies run by female CEOs, weighted by the number of companies. Rebalance your portfolio every time a company is added or removed. You are 100% in the market at all times. I think that if you look at the IPython notebook that the Fortune article refers to you can find the details spelled out in code. (FWIW, the calculations are done by a she, not a he! It's my colleague Karen.)
- fsk 12y ago
  What link? The method you mention is correct. It wasn't clear reading the article that was what she did. I'm looking for the raw list of female CEOs, Tickers, and hire/fire dates. I'm also wondering if the results are different based on sector.

by fsk 12y ago

dunster 12y ago

There's a slightly different methodology here, but one consistent with what you're looking for. On one line, buy-and-hold the S&P 500. Re-invest all dividends. You are 100% in the market at all times. On the other line, buy-and-hold all companies run by female CEOs, weighted by the number of companies. Rebalance your portfolio every time a company is added or removed. You are 100% in the market at all times. I think that if you look at the IPython notebook that the Fortune article refers to you can find the details spelled out in code. (FWIW, the calculations are done by a she, not a he! It's my colleague Karen.)

fsk 12y ago
What link? The method you mention is correct. It wasn't clear reading the article that was what she did. I'm looking for the raw list of female CEOs, Tickers, and hire/fire dates. I'm also wondering if the results are different based on sector.