Faces and Earnings Estimates — and Other Quirks of Business

The true meaning of a bailout, how pay transparency works and whether to take that meeting or not

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1 of 5

Securities analysts with faces that score high for traits of trustworthiness and dominance were found to produce more accurate earnings estimates on the companies they follow. Why?

Facial traits mirror the soul, especially among securities analysts.
Untrustworthy-appearing analysts are all fired before they can acquire industry expertise.
Company executives seemingly grant more access to analysts who look trustworthy and dominant.

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2 of 5

When financial regulators, such as the Federal Reserve, announce specific bailouts and backstops to calm markets, traders guess how much aid Uncle Sam is really willing to provide. Generally, the market assumes:

The government is good for twice what’s promised if needed.
Half the amount promised.
Precisely what is promised — no more, no less.

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3 of 5

Pay secrecy has contributed to a continuing gender pay gap. Research suggests pay transparency would:

Cause some workers to work harder for no extra pay.
Give employers access to industry data that would help them reduce wages overall.
Be utilized most effectively by those already earning the highest wages in a job category.
All of the above.

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4 of 5

Familiarity breeds, well, it changes things. When executives from two companies meet in person frequently in the months before agreeing that one will buy the other:

The selling company extracts a higher price.
The buying company clinches the deal at a lower price.
Terms are no different than if they’d done the deal over the phone.

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5 of 5

Highly concentrated institutional ownership of a publicly traded company results in more of the firm’s wealth being channeled to shareholders, which entails job cuts and reduced wages. At the same time:

Productivity surges.
Productivity plunges.
There is no substantial change in productivity.