The Investor’s Lie Detector with Susan Carnicero

“The Angle” Music

Cold OPEN: “The more you allow a person to lie to you, to be more deceptive, the harder it’s going to be for them to tell you the truth.”

Justin Thomson

Welcome to The Angle from T. Rowe Price, a podcast for curious investors. Just a reminder that outside of the U.S. and Australia, this podcast is for investment professionals only. Thank you for joining me today, I'm Justin Thomson, head of the T. Rowe Price Investment Institute.

At T. Rowe Price, we believe asking better questions gets you better insights. To help us ask better questions we've engaged with one of the best in the business, Susan Carnicero. After 20 years as a CIA operative, she now has her own business, QVerity, that helps governments and corporates ask better questions, interpret suspect behaviors, and identify whopping great lies. Susan, welcome.

Susan Carnicero

Thank you.

Justin Thomson

Let's talk about you to start off with. How does one become a CIA operative? How did you get into this business?

Susan Carnicero

Well, I was actually recruited into the organization, many, many, years ago. And then, but a lot of people come in, they apply, and depending on what their backgrounds are, you know, they come in under, as analysts, they come in as, as, security people, they come in as economists. So, there's, there's, a position for every industry inside the organization. But I was recruited out of a company that, where I was PR, public relations for a Fortune 500 company, and someone knew me in the organization and suggested that I would be a good person for work inside the organization. And I did, I did, one level of work for a, for a while, and then Aldrich Ames decided to out me, and I ended up going to Office of Security, where I did polygraph for a number of years. And things like that helped to develop the methodology for detection of, detection of deception.

Justin Thomson

So you're in PR. In terms of academic training, was it physiological? Was it behavioral? I mean, I'm just very keen to know what you know, how your mind got you into the position that you are now expert in?

Susan Carnicero

Well, so I would say that it was part education, but it was also part experience. I do have a background in forensic psychology. I have a master's in forensic psychology. And then when I ended up going into polygraph and started to study people all day long, you know, for hours at a time, you would naturally start to pick up some of the behaviors and you could see where the deception was. But that's mostly where it came from. And then just years and years and years of following this methodology that was developed inside the agency, allowed us to start to really identify deception. And with that, with finding the deception, what do you do once you find it, right. Do you just say, oh, they lied to me and walk away? Or in your particular world, if you see deception, you know, what's your next step? And that would be your follow-up questions. You know, you identify the question, identify the stimulus, identify the behavior. When you see deception, you need to ask those follow-up questions.

Justin Thomson

Very good. We talk a lot in this podcast series about biases and counteracting biases, and one of the reasons talking to you is so interesting is that I know one of my own biases as an analyst, and, and, portfolio manager, was I was too believing. I was too believing. My question to you then is, what were your biases, and how have you overcome them in becoming the expert that you are?

Susan Carnicero

Well, I hear you when you say that you were too believing, that you were too trusting, and I would say that for much of my life I was the same, the same way. You know, I wanted people to like me. I didn't want to, you know, I didn't want there to be any conflict. And it took, it took turning off that, quite honestly, it took me seeing enough bad behavior, or seeing, or got, you know, even being wrong about people for me to start really paying attention. And, you know, I still don't like conflict. I still try to keep things mild. I, you know, I try to be a nice person. But, you know, we talked about earlier, when I see or hear deception, I don't go around looking for it. But if I'm in a conversation with somebody, and it pops up, I immediately kick into that mode where I start paying attention to what's being said. But it really took a psychological switch to just be aware that, that, people are going to lie to you if it's in their best interest, they're going to lie to you.

And, you know, and that's a hard row. I have learned probably in my last 30 years, more than that now, of doing this kind of stuff, that there's a lot of bad people out there and there's a lot of bad people who, who, want to beat you and, you know, they want, they want, to be able to prove that. And I don't want to say that they're better, but they want to, they want to one up you.

Justin Thomson

Fascinating. In the course of my investing career, I interviewed literally thousands of managements. That's, that's, what I did. That was my research. The techniques - well, first of all, being prepared, knowing your subject was; is the best thing. But I found there were two ways to get management talking. One was charming them, or two bludgeoning them. Now, I know your methodology is non-confrontational, and you're clearly a charmer. Does it ever pay to be a bludgeoner?

Susan Carnicero

There have been times. Absolutely. There have been times when people have tried to take advantage of my niceness. Absolutely, 100%. And to say that I adapt my personality to the person I'm dealing with is 100% true. If I've got somebody who's, who's, being a jerk, I can I can be a jerk back. But not to the point where it damages the communication. You know, instead of bludgeoning them, I might just be a little less friendly, a little less charming. Thank you for that. And just a very, very, serious, straight to the point. And, and just, you know, letting them know that that I'm on to their game.

Justin Thomson

I said being prepared is, was, was, part of it, and I have actually read one of your books. It's sitting here in front of us, ‘Spy the Lie’, which, by the way, is highly readable and you can consume it very quickly. I read it on the plane over from London. What I liked, what I liked, everything about it, but you describe lies, or you categorize lies. Lies of commission, lies of omission, and lies of influence. In your view, what are the most pernicious of those categories of lies?

Susan Carnicero

Definitely, definitely the lies of influence. Definitely, because there's 100 different ways to do it, right. The lies of commission, you can get caught, right. Saying, saying, you know, I didn't do something when you did it. That's, that's, easily catchable. So, leaving something out, omitting something in your, in your response, is easily seeable and easily catchable. But the lies of influence there are; there's so many lies of influence. They can be convincing statements. They can be, you know, non-answers. They can be lack of detail. They can be the qualifiers that we talked about. There's just so many and they sound so good. A lot of them sound so good. And that's when you talked about bias earlier, that's where a lot of people get, get, snookered. Because, for instance, if you follow the same company for so long, or you were investor in this company for so long, you were, you were vested because you wanted it to work.

Justin Thomson

I think you need to be careful in this business to avoid asking questions that confirm the thesis, or the view that you already have; that's called confirmation bias. And so, you know, that's maybe where we should go now is to, you know, how, how we should frame our questions to avoid getting the answers that confirm what you already believe. Maybe let's start there to make this, bring this back to investing and making it really relevant for, for, for, our listeners.

Susan Carnicero

So what we do is, we know what information we want. We're not looking to; we're not asking confirmatory questions - 100%. We're asking questions that give us more information than we came in with. So, you know, if you've got a, if you've got a management team who's, they've got problems in the management team, or you've got problems in earnings, right. They miss their, they miss their, they miss their earnings mark, whatever, those questions are going to be. Things like, what impediments do you have to, to, to, meet your, to meet your guidance. You know those sorts of things. Not, not, okay, so, this is what you said. Is that right? I'm not going to ever ask those sorts of questions. What we're digging for is, is more information that will allow us to, to, which allows a couple of things.

Let me, let me step back for just a second, because if I'm investing in a company; and I want to know as much as I can know about that company. I can, I can read what's, what's, in the newspapers. I can see what's in the industry and all those sorts of things, but I'm really more interested in what that management team is going to tell me. Right. Not what I, what I think I know, but more what they're going to tell me. And when I talk about the methodology that we, that's in the book, and that we were talking about earlier, the methodology is designed to find those problems. It may not necessarily find the answer. So, for example, we have some clients they don't need to know. They don't have to get the information. They just need to know if the management team is lying.

Justin Thomson

One of the toughest clients I had. So, on, on the other side of the business, but also one of the best clients I had, could smell a rat straight away. Not about being evasive, but she could smell where the issues were in the portfolio, or and, and, she went after it. She smelt it and she went after it. I mean, is that, is that legitimate?

Susan Carnicero

Absolutely. And when you talk about, she knew where the problems were, when we talk about this methodology, we use it as a GPS, meaning that, you know, there's how many topics that you, that you talk about when you go to a management meeting, right. Seven, eight, nine, ten, whatever. And if like, like you're, like this person you were talking about, if she knew where the problems was, it's because she realized that they weren't all problems. Every topic wasn't a problem. And so, when we talk about the GPS and we asked the questions and we see the deception we know that scenario that needs further research. If we ask a question and we don't see a cluster of deceptive behaviors, we're not going to worry about that. So, our GPS leads us to focus on, as you said, you know, just digging down on where the problem is, because you only have a certain amount of time when you go to meet with the management team. Right. And you want to make sure that the questions, that the issues that are the most important, are the ones that you're getting the questions asked for. Right. So, you want to focus on the problem areas and not on the areas that aren't problematic.

Justin Thomson

You talk in the book about the L-squared methodology. So ‘listen and look’. What is evasiveness in C-suite tend to look and sound like?

Susan Carnicero

They don't answer the question, right. You ask, you ask a question and they give you a lovely answer that's canned and exactly what they want to say. But it doesn't answer the question that you were asked. You know, they, they, may deny that there's a problem, but it's part of a cluster. Or better yet, they don't deny, right. They ignore the denial altogether. And denial doesn't have to be a no. But if somebody says I didn't do anything, or if they're not specific in that behavior, that particular issue, that's going to be evasive, right. That's just trying not to answer the question. Some of the qualifiers that we talked about can be evasive. ‘Basically’, ‘for the most part’, right. And if you're, if you're, not in L-square mode and you don't catch the fact that they're carving out that area you just asked them about, you're going to miss it.

Justin Thomson

One of the things I find most infuriating about questioning techniques, interviewing techniques is when journalists or investors make a statement within their question to show how much they know. So, for us to be really good at this, would, would, you frame questions precisely? Or is a prolog to the question, which is what you describe them as ever, ever justified?

Susan Carnicero

I do believe that there are times that a short prolog might be, might be useful, but for the most part we're going to go. And I wouldn't say that we are asking absolute direct questions, right. We're not asking, for example, for most of the investment community, we're not going to ask a lot of close-ended  questions because we're trying to gather information. I would use a close-ended question to confirm what they said, perhaps, or I would use a close-ended question to, you know, dig into a specific area of what they've just said. But for the most part, the most useful questions are open and the questions that allow them to share information.

Justin Thomson

Right, right. Yes. So, ask the question to draw out, without crossing the bounds of legitimacy, but to draw out information. Okay. Helpful. Describe convincing versus conveying. And that part of the technique you use.

Susan Carnicero

So, to convey information is usually just a simple yes or no. Did you do something? No. A convincing statement is, is, a statement that people will use to try to convince you that, that something is as they say it is, right, and it can be, you know, convincing statements that tell you they're a great person or convincing statement says the company is doing great, you know, by offering you a few examples of how it's doing great. And the problem with convincing statements is they're hard when you're sitting in the room talking to somebody, they're hard to refute because a lot of times you don't have different information to, to, to, say that it's not true. So, people will use a single convincing statement, for example, if they've been asked, been asked about something that they didn't do, but they're not going to give you, you know, chapter and verse like a lot of people will do. And, and management teams are good with convincing statements.

Justin Thomson

Okay. What about don’ts? Let me ask, what, what, is the worst question you routinely hear from analysts/investors?

Susan Carnicero

Give me some color. You ask them to give you some color about something. You've just invited them to go down this little, little merry path. And they can say whatever they want to say. And you've got to try to capture what they're saying, and, and, you know, be able to ask the follow-up questions, but they'll lead you down the path.

Justin Thomson

Yeah. Okay. So open-ended questions are good, but not so open-ended that they allow the company to provide their narrative, rather than what you want to hear. Do you know instinctively when to pursue a line of questioning and when to move on?

Susan Carnicero

Yes. So, and you can do this one of two ways. We again, we've talked about follow-up questions just here in this podcast. If you see deception at that point you could ask a follow up question right there. Right. And if, if, you know, if they dig in and you can see the deception even more, you could, you could use what we call a repurpose question, which is you ask the question, but in a different way. If you're still not getting anything, it's time to move onto the next question. Your other option is to wait till you've asked all your questions, and then you can ask those, those, follow-up questions, or repurpose questions, at the end of the interview. So, you know, when you, when you go into these interviews, you want to, we say you want to ask your most important questions first, because you may run out of time. And they're probably expecting those questions because, you know, they know what's going on in their companies. But you, there are times when you just got to go, I'm not going to get it, I know they're lying. I know, which by the way, we never use the word lying. We know, we know they're being deceptive, but we, but we don't, we're just not going to keep beating it because it's not allowing us to, to get anything else. Remember I said to you earlier that it's harder for people to admit that they've lied than it is to tell you that something is wrong. And so, the more you allow a person to lie to you, to be more deceptive, the harder it’s going to be for them to tell you the truth. And so, you know, after a couple of times of asking, you got to give up that ghost and move on.

Justin Thomson

I'm wondering how you and how we can adapt to technology. And along two lines, one is the virtual world. So, we're doing a lot of our meetings by Zoom, so those visual cues become harder to detect. How do you adapt?

Susan Carnicero

I mean, we've done the same thing. You know, we went from in-person meetings with everybody we ever talked to, to going to Teams and Zoom calls. And there is, you do lose some of the sense. You lose, you know, you can't see what's going on in the entire body. You can't see if they're sitting there playing with a pencil or things that you would normally see. You've really got, to really; becomes more of the listening, you know; what are they saying and doing as opposed to, to, what they're, you know, what they're doing sitting in the room. So, that makes it harder for sure, and it's easier to lie to people through a screen and through a telephone than it is in, in your face.

Justin Thomson

So, how do you, how do you become more alert, in the, in the virtual world?

Susan Carnicero

Pretty much the same as you do sitting across the room. I mean, the second that you asked that question, you're in L-square, you know, you can see them swivel, you can see them sit back in their chair or lean forward. You know that you can see for the most part in the virtual world, but for, you know, for what's going on down below, you know, the feet and things like that, the anchor point movements, you miss some of that.

Justin Thomson

Okay, let's, let's, wrap this up. This has been a great conversation, but, you know, you think it's good to ask an open-ended question at the end of your interview. So, I'm going to take your advice and say - anything that I haven't asked that maybe I should have asked you?

Susan Carnicero

That's a great question. Actually. You should, you should use that at the end of every interview that you do. And it's, and we order it a little bit differently. We, we, we, say, is there anything that you and I have not talked about that you feel needs to be discussed? Right. And you'd be amazed at how much people will tell you that whatever that is, that was bothering them.

Justin Thomson

Susan, I think I'm going to bring this to the close. I'm going to, and I'm not going to lie, this has been truly perceptive, truly insightful, and I think, above all, it's practical advice. So, thank you.

Susan Carnicero

Well, thank you for having me.

Justin Thomson

And thank you for listening to The Angle. We look forward to your company on future episodes. You can find more information about this and other topics on our website. Please rate and subscribe wherever you get your podcasts. The Angle. Better questions, better insights. Only from T. Rowe Price.

Disclosure

This podcast episode was recorded in May of 2026 and is for general information and educational purposes only. Outside of the United States and Australia it is for investment professional use only. It is not intended to be used by persons in jurisdictions which prohibit or restrict distribution of the material herein.

This podcast does not give advice or recommendations of any nature; or constitute an offer or solicitation to buy or sell any security in any jurisdiction. Prospective investors should seek independent legal, financial, and tax advice before making any investment decision. Past performance is not a guarantee or a reliable indicator of future performance. All investments are subject to risk, including the possible loss of principal.

The views contained herein are those of the speakers as of the date of the recording and are subject to change without notice. These views may differ from those of other T. Rowe Price associates and/or affiliates. Information is from sources deemed reliable, but not guaranteed.

This podcast is copyright by T. Rowe Price. 2026.

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