Better Capitalism; No To Quarterly Earnings Guidance?
I recently watched a joint interview with Jamie Dimon , the charismatic CEO of JP Morgan Chase, and legendary investor Warren Buffet , where they called for an end to quarterly profit reports. They stress that short-term focus on a company can cause managerial complications that can then trickle down into lower tiers of the structure. In their WSJ opinion piece they're quoted with stating “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth, and sustainability,” and “The financial markets have become too focused on the short term. Quarterly earnings-per-share guidance is a major driver of this trend and contributes to a shift away from long-term investments.” While this may go against the normal rhetoric that is widely observed as short-term capitalistic greed, it is important that this is coming from two industry titans with a clear vision. It goes without being said that q