Trump wanting to eliminate quarterly earnings report

[Bull3t007 120]

This will affect our strategy, any opinions?

[krisbee 1,618]

http://fortune.com/2018/06/07/buffett-dimon-quarterly-earnings-guidance-short-term-thinking/

See this URL. IMO they'd eventually stop telling the guidance but earnings report will be there to tell their revenue, p/l etc.,

 

[Kim 7,513]

Lets cross the bridge when we get there.. I don't see this happening any time soon. Too many people make a living out of those reports (analysts, hedge funds etc.) The lobby is too strong. 

In my personal opinion, it will reduce transparency, and I don't see SEC going forward with this.

In any case, he suggests bi yearly reporting, so even if this happens, we will still have more than enough trades in our arsenal.

[cuegis 683]

7 minutes ago, Kim said:

Lets cross the bridge when we get there.. I don't see this happening any time soon. Too many people make a living out of those reports (analysts, hedge funds etc.) The lobby is too strong. 

In my personal opinion, it will reduce transparency, and I don't see SEC going forward with this.

In any case, he suggests bi yearly reporting, so even if this happens, we will still have more than enough trades in our arsenal.

You are absolutely right.

Plus, there are way too many professional groups, like the intelligence community this week after the Brennan debacle, who are just really growing opposed to him,and his tactics, because they know they are not motivated by the best intentions.

 

After just reading the article, it looks like I was wrong about that.

This isn't the "intelligence" community.

Edited August 17, 2018 by cuegis

[Djtux 543]

9 minutes ago, Bull3t007 said:

This will affect our strategy, any opinions?

Trump wanted to do a military parade. It was scrapped after a year of  'study'.

Is this quarterly earning study just a way to distract everyone ? Possibly.

[cuegis 683]

1 minute ago, Djtux said:

Trump wanted to do a military parade. It was scrapped after a year of  'study'.

Is this quarterly earning study just a way to distract everyone ? Possibly.

I would have immediately agreed with you about this but, after reading the article, and learning how people like Buffet and Dimon, were already pushing for this before trump joined in, it gives a different perspective.

It could even be worse because, if companies now come out with occassional guidance comments, that are not announced, it can cause unexpected hiccups in the market, and individual stocks, that could hurt certain positions if we were not expecting them.

We need to have the security of the "KNOWN/unkowns", such as specific dates.

[Kim 7,513]

Buffet and Dimon were pushing to eliminate guidance, not the reports themselves. 

[Djtux 543]

2 minutes ago, cuegis said:

I would have immediately agreed with you about this but, after reading the article, and learning how people like Buffet and Dimon, were already pushing for this before trump joined in, it gives a different perspective.

It could even be worse because, if companies now come out with occassional guidance comments, that are not announced, it can cause unexpected hiccups in the market, and individual stocks, that could hurt certain positions if we were not expecting them.

We need to have the security of the "KNOWN/unkowns", such as specific dates.

Yes the quarterly guidance could be removed.

But the quarterly reporting of the balance sheet, income statement, cash flow... aka the financial statement, i think it should stay. And i don't think that Buffet or Dimon would push to remove the financial statement reporting every quarters.

6 months is a long time : look at HMNY or LFIN

https://www.nytimes.com/2016/02/02/business/dealbook/some-heresy-on-wall-street-look-past-the-quarter.html?dlbk

https://www.nytimes.com/interactive/2016/02/02/business/dealbook/document-larry-finks-2016-corporate-governance-letter.html

(From the CEO of Blackrock)

Quote

Over time, as companies do a better job laying out their long-term growth frameworks,
the need diminishes for quarterly EPS guidance, and we would urge companies to move
away from providing it. Today’s culture of quarterly earnings hysteria is totally contrary
to the long-term approach we need. To be clear, we do believe companies should still
report quarterly results – “long-termism” should not be a substitute for transparency – but
CEOs should be more focused in these reports on demonstrating progress against their
strategic plans than a one-penny deviation from their EPS targets or analyst consensus
estimates.

 

I personally believe that the financial statement should stay every quarter. This is important to know the financial situation of the company.

The game of EPS beat, guidance, that's less of an issue. I think only 1/5 of the companies provide that.

And will increasing the financial reporting to every 6 months reduce the short term thinking ? I don't think so.

[cuegis 683]

5 minutes ago, Kim said:

Buffet and Dimon were pushing to eliminate guidance, not the reports themselves. 

Thats good to know.

[kirkr1517 108]

Plus the quarterly reporting is part of not only the SEC, but it's required of generally accepted accounting principles.  I would think that protecting the right for shareholders/owners to know the financial information in a timely, transparent manner is more important than a short-term fluctuations in stock prices.  But that's just my two cents worth.

[cuegis 683]

7 minutes ago, Djtux said:

Yes the quarterly guidance could be removed.

But the quarterly reporting of the balance sheet, income statement, cash flow... aka the financial statement, i think it should stay. And i don't think that Buffet or Dimon would push to remove the financial statement reporting every quarters.

6 months is a long time : look at HMNY or LFIN

https://www.nytimes.com/2016/02/02/business/dealbook/some-heresy-on-wall-street-look-past-the-quarter.html?dlbk

https://www.nytimes.com/interactive/2016/02/02/business/dealbook/document-larry-finks-2016-corporate-governance-letter.html

(From the CEO of Blackrock)

 

I personally believe that the financial statement should stay every quarter. This is important to know the financial situation of the company.

The game of EPS beat, guidance, that's less of an issue. I think only 1/5 of the companies provide that.

And will increasing the financial reporting to every 6 months reduce the short term thinking ? I don't think so.

I agree with all of this of course..Both for my personal benefit (trading), but more important, for all of the reasons that you mention.

I think people of Buffet's "ilk" are on the "other side" of this situation, as the "owners", and major shareholders, of various companies, and they don't like the 2-3 SD erratic jumps in stock price, and therefore, their net worth, that comes with the occassional 10% drop that follows earnings.

From their perspective, they would like to maintain the stability of the stock price.

[TrustyJules 3,015]

Though I cant read Warren Buffet's mind I am pretty sure that he couldnt care two hoots about the 2-3 SD stock spikes. The reason why Buffet and many other people abhor the quarterly report is that there is a sort of microfocus on the short term result which can be at the expense of the long term gain. Trying to make the quarter they company is selling its future down the river - from personal experience with my customers I can confirm that this can be an issue. Long term decisions and investments not made/postponed so that the Q x report is not impacted.The idea is that in the absence of Wallstreet crying for the head of the CEO when one quarter misses guidance by a cent would be reduced and the companies could focus on presenting the results of the longer term. Personally I understand some companies are in the quarterly earnings rat race but I do feel it is a choice, plenty of great companies dont give a damn about the quarter as long as they secure the decade. Easy to do if you are successful. admittedly harder when times are tough.