GE's Greatometer Reveals a Great New Metric

File this posting in the irreverent file but thought I'd share because this is great.  WSJ's money blog had a great post called "Great Scott! A New GE Metric" which talked about a great 'study' by Morgan Stanley stock analysts where they noted a correlation between CEO Jeff Immelt's use of the word 'great' or 'greater' and company performance.  Dubbed the greatometer, they found that as the "use of 'greatness' rises during the company's conference calls, so does GE stock".  How great is that?  I know - it's too great. 

To give you a sense for just how great the Greatometer is, the blog author provides some great statistics which I'd presume were provided by the great guys at Morgan Stanley.

"In the third-quarter 2002 call, Messrs. Immelt and Sherin said "great" more than 20 times. By the second quarter of 2005, the word appeared about 70 times in an hour-long call. Over that period, GE shares rose 37%, to $36.38, from $26.65.

Then, Messrs. Immelt and Sherin cut back on using "great" for a while. In the call following the third quarter of 2006, the word was uttered only 37 times. GE stock fell 10% over the period.

Following the drop came a great rebound. On Jan. 18, when GE reported its results for the fourth quarter of 2007, there were roughly 80 incidences of greatness, including the "great company," the "great quarter," the "great momentum" and the "great risk management," according to a transcript by Thomson Financial.

Shareholders were feeling great, too: GE shares traded at an average of $40.16 in the fourth quarter.

So how should investors play the greatometer in 2008? The eruption of greatness in the most recent call would seem to be a bullish sign.

"If share prices do really correlate with management optimism, then GE's one-year outlook could be looking up," says Scott Davis, Morgan Stanley's lead GE analyst."

Given the great fascination with GE and its management practices & metrics, I would also suggest that a consultant deem this a great best practice and begin marketing some sort of great offering around this.