Colin McLean, Managing Director of SVM Asset Management, has done striking research on how much positive spin corporates can put in their annual report.
McLean analysed an annual report of a British life insurer in 2007. The report contained the following words:
underperform 2
disappointed 0
bad/worse/worst 8
poor/poorly 1
weak/weakness 5
challenges 7
————————–
achieve/achievement 85
good/better/best 150
excellent 15
grow/growing/growth 207
improve/improvement 73
strong/stronger/strength 150
The insurer’s shares lost 17 percent in 2007, then a further 42 percent in 2008, along with its peers.
