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Trump Pushes To Study An End To Quarterly Earnings Reports
I don't understand how a missing quarterly reports will "boost business" or "create jobs". @Ted - help me here. Do you find quarterly reports as detrimental to business and jobs. If so, why? What is the mechanism for missing reports to play into these two things?
Those are just his automtic schtick talking points and can be ignored. If he does something for business, it must 'boost business' and 'create jobs' -- any other descriptor would be lost on him. This won't do anything for job creation, just like the tax bill last year didn't help much either. He truly has no idea what is coming out of his mouth on any given issue. (If you watch his language, he has a few almost-routine descriptors to go along with key themes. One is what I just said above. Then he could be talking about a Democrat and he'll say they're "soft on crime", "soft on borders" and "don't help our wonderful veterans." The 'border' one I laughed at when he lobbed that one at a Dem House member located in a state well inside the country and far from any national border.)
That said, I agree w/LB that quarterlies can help provide transparency. But they also provide decision points for companies to take risks just to 'meet estimates' and make the 'analysts' happy -- which can be disasterous at times, too. So while I value the transparency, as a long-term investor this might not be such a bad idea as folks like Buffett and I think Dimon have said.
I don't understand how a missing quarterly reports will "boost business" or "create jobs". @Ted - help me here. Do you find quarterly reports as detrimental to business and jobs. If so, why? What is the mechanism for missing reports to play into these two things?
No, quarterly earnings reports provide transparency. Quarterly earnings based executive compensation is the problem causing short termism.
That is the explanation for whatever real impact quarterly reports have on business practices.
If we had a more sophisticated (feel free to offer a better word) investing public that didn't place so much importance on quarterly figures, then these reports would not move share prices. Thus execs wouldn't be motivated to position for quarterly results at the expense of long term growth.
Expect to hear also the usual mantra: more reports because of more regulations = higher compliance costs = lower profits = fewer jobs
Thanks everyone. I might be back after I mull it over. (My problem is I have always felt people overreact to these reports and wondered myself if we would be better off with less of them. But it is hard for me to consider information as a bad thing.)
Another reason for investors to index. Hire a strong seasoned CEO to begin with that has the resolve and determination to articulate a long term strategy regardless of time frame reported.
I'm all for long-term focus on things but we can reduce costs too much. To wit: I hate getting annual reports in PDF format -- I much prefer the old hard copy, even if it went from slick paper to (cheaper) flimsy newsprint.
@rforno: agreed (if they go too far). Quarterly reports force a company to manage to hit that bogey, if you will. As an investor, I may want this behavior, since it should help sustain a measure of volatility, and perhaps provide more opportunities to buy, as traders sell. The converse argument could be, if the reports are annual (or even longer), the company's focus would benefit, at least theoretically, investors (active or indexers).
The floor is open on this subject for sure. Is it the quarterly reporting or CEO's positioning the company to meet or beat quarterly expectations while some disregard the longer term focus? Some will say manage well quarterly and the year end and beyond results will take care of itself. I'm thinking, for some, six month reporting will provide more wiggle room to be creative.
@BrianW The headline for this thread is "Trump pushes..." with a political figure in it from the start. Why did you click on it if you thought there should be no political connection?
At the risk of publicly burning my libtard library card, I think I am more with @Ted and @BrianW here --- the former was just (to my read) parroting the lede of the article, and the latter (again my interp) was at least partly objecting to the 'Consider the source' shot.
In other words, as Ted noted, this may be a substantive idea worth discussion. Of course w/ what's-his-name you always have to consider self-dealing and everything related, but let us stay focused on the proposal.
I think it’s generally a good idea to parrot an article title when posting. But sometimes the poster may exercise editorial discretion in labeling the thread (for a variety of reasons). In this case the reason would have been to steer the discussion more in the direction of the proposal and away from the personality involved. In the current heated political environment (not just here, but nationally) the mention of Trump (or Clinton or Warren or Obama) is likely to stir the boiling political pot. I would have exercised such discretion. Ted saw no need to. Tough call.
I don’t disagree with Brian’s objection. Was merely trying to explain (as Lewis did) why the topic as worded was likely to elicit political comments.
Nice to see some reasonable discussions of differing viewpoints without the unnecessary nastiness of some past confrontations. "Compromise" is not an obscene word, despite the beliefs of some.
I was just listening to Liz Claman (commenting on this issue) and she made the comment that the number of companies traded publicly have been cut in half during her career from around 7k to 3.5k. Honestly, I had never paid attention to it. Made me go looking for information and I found this article on Bloomberg. https://www.bloomberg.com/view/articles/2018-04-09/where-have-all-the-u-s-public-companies-gone
@BrianW: thanks for linking that article and asking whether or not it's appropriate to bring up the President in this context. I believe we have a man in office who disregards the precedents set out by many presidents before him and in so doing causes a reaction. If we were talking about the current Fed policy of raising interest rates, could we disregard the report that the President over the weekend once again questioned Mr. Powell's actions? Most of us are accustomed to a President who respects tradition and precedent and we react negatively when the office holder inserts himself into matters that are the purview of others.
@davidrmoran Fine for Singer, but it's this that I have a real problem with:
Like many financiers who have achieved his level of success, Singer sees himself as more than a skillful player in the markets; he conducts himself like a public intellectual whose ideas on policy—on everything from taxation to regulation, education, and foreign affairs—should be heeded by politicians and other decision-makers on both a national and a local level.
That makes about as much sense as asking a pediatrician how to fix your plumbing, yet I see it again and again in the financial sphere--because people are good at making money by any means necessary they assume they should be running the country. Their me-first Ayn Randian inspired philosophy is exactly the opposite of what you need in the public-servant sphere. The other thing I've discovered through long experience is that many of these superb investors aren't exceptionally bright in general, just good at the one thing--making money--and crass ignoramouses otherwise. I won't name names, but you've named a couple yourself in the past.
@BrianW, the Wilshire 5000 Index has 3500 companies...because there are only 3500 "public" companies. Consuelo Mack weekend guest, Joel Greenbatt, mentioned that it cost $2-3 million a year to meet regulatory paperwork to be a "public" company and so many companies stay "private" or go "private".
@bee, good information. Makes you wonder if we're missing great investing opportunities simply because of the regulatory cost. I understand there has to be regulation, but perhaps it has tipped too far in the wrong direction. I miss Consuelo being on tv, thanks for the link.
Roger all about policy and this kind of misguided soul.
14% / yr is a miracle absolutely as well as relatively, but we have all benefited from this literally incredible longlived bull market;
and at the same time no one but Buffet would have stuck w JNJ and FCNTX for 40y without bailing or cashing in.
BUT screwing Peru and trying to hijack ships in Ghana simply to equal the best of the market, quite aside from all this ill will, is a kind of alpha nobody needs, at least not me.
I am surprised no attempts on Singer's life. (He was an AEPi frat brother at the U of R.)
If we were talking about the current Fed policy of raising interest rates, could we disregard the report that the President over the weekend once again questioned Mr. Powell's actions?
@BenWP - Absolutely - You just need to think outside the box. No need to link words or actions to any particular politician. That’s the whole reason Merriam Webster invented the indefinite and third person personal pronouns - to protect politicians against criticism for what they say or do.
Here’s a “sanitized” version of a Reuters report on today’s utterances - which may hopefully serve as a suitable model for future posts on the matter.
WASHINGTON (Reuters) - (Someone) said on Monday (he / she) was “not thrilled” with Federal Reserve Chairman Jerome Powell for raising interest rates and accused China and Europe of manipulating their respective currencies. ...
The independence of the Fed is seen as important for economic stability. U.S. stocks dipped after the comments to and the dollar .DXY edged down against a basket of currencies.
“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” (he / she) said in the interview, referring to Powell. ... “We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated.”
The Fed has raised rates twice this year and is expected to do so again next month.
@davidmoran: I had been reading that piece on Singer just before you posted the link. I think your comment is that Singer’s fund has achieved the same performance as if one had been invested in JNJ or the Contra fund for 40years. I usually finish what I’m reading, but I got disgusted with the Singer story. He and his crew are truly unpleasant company.
Comments
Those are just his automtic schtick talking points and can be ignored. If he does something for business, it must 'boost business' and 'create jobs' -- any other descriptor would be lost on him. This won't do anything for job creation, just like the tax bill last year didn't help much either. He truly has no idea what is coming out of his mouth on any given issue. (If you watch his language, he has a few almost-routine descriptors to go along with key themes. One is what I just said above. Then he could be talking about a Democrat and he'll say they're "soft on crime", "soft on borders" and "don't help our wonderful veterans." The 'border' one I laughed at when he lobbed that one at a Dem House member located in a state well inside the country and far from any national border.)
That said, I agree w/LB that quarterlies can help provide transparency. But they also provide decision points for companies to take risks just to 'meet estimates' and make the 'analysts' happy -- which can be disasterous at times, too. So while I value the transparency, as a long-term investor this might not be such a bad idea as folks like Buffett and I think Dimon have said.
If we had a more sophisticated (feel free to offer a better word) investing public that didn't place so much importance on quarterly figures, then these reports would not move share prices. Thus execs wouldn't be motivated to position for quarterly results at the expense of long term growth.
Expect to hear also the usual mantra:
more reports because of more regulations = higher compliance costs = lower profits = fewer jobs
Hire a strong seasoned CEO to begin with that has the resolve and determination to articulate a long term strategy regardless of time frame reported.
I'm all for long-term focus on things but we can reduce costs too much. To wit: I hate getting annual reports in PDF format -- I much prefer the old hard copy, even if it went from slick paper to (cheaper) flimsy newsprint.
Push to Study An End to Quarterly Earnings Reports
In other words, as Ted noted, this may be a substantive idea worth discussion. Of course w/ what's-his-name you always have to consider self-dealing and everything related, but let us stay focused on the proposal.
I don’t disagree with Brian’s objection. Was merely trying to explain (as Lewis did) why the topic as worded was likely to elicit political comments.
https://www.newyorker.com/magazine/2018/08/27/paul-singer-doomsday-investor
Great interview if you missed it:
consuelo-mack-s-wealthtrack-encore-guest-joel-greenblatt-overcoming-destructive-investor-behavior
Roger all about policy and this kind of misguided soul.
14% / yr is a miracle absolutely as well as relatively, but we have all benefited from this literally incredible longlived bull market;
and at the same time no one but Buffet would have stuck w JNJ and FCNTX for 40y without bailing or cashing in.
BUT screwing Peru and trying to hijack ships in Ghana simply to equal the best of the market, quite aside from all this ill will, is a kind of alpha nobody needs, at least not me.
I am surprised no attempts on Singer's life. (He was an AEPi frat brother at the U of R.)
Here’s a “sanitized” version of a Reuters report on today’s utterances - which may hopefully serve as a suitable model for future posts on the matter.
WASHINGTON (Reuters) - (Someone) said on Monday (he / she) was “not thrilled” with Federal Reserve Chairman Jerome Powell for raising interest rates and accused China and Europe of manipulating their respective currencies. ...
The independence of the Fed is seen as important for economic stability. U.S. stocks dipped after the comments to and the dollar .DXY edged down against a basket of currencies.
“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” (he / she) said in the interview, referring to Powell. ... “We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated.”
The Fed has raised rates twice this year and is expected to do so again next month.
(Edited) excerpts from : https://www.reuters.com/article/us-usa-trump-fed-exclusive/exclusive-trump-says-not-thrilled-with-feds-powell-for-raising-rates-idUSKCN1L5207?ref=hvper.com&utm_source=hvper.com&utm_medium=website
For instance:
https://campaignmoney.com/advanced.asp?searchtype=contributors&cycle1=16&lname=Singer&fname=Paul&work=Elliott+Management&occup=&zipcodes=&fdate=&tdate=&state=&cycle2=16&cmtetype=&cmtename=&cmteorg=&igc=&cmteparty=&cycle3=16&cndoffice=&cndtype=&cndlname=&cndfname=&cndstate=&cndparty=&orderby=
or
https://campaignmoney.com/advanced.asp?searchtype=contributors&cycle1=16&lname=Herro&fname=David&work=&occup=&zipcodes=&fdate=&tdate=&state=&cycle2=16&cmtetype=&cmtename=&cmteorg=&igc=&cmteparty=&cycle3=16&cndoffice=&cndtype=&cndlname=&cndfname=&cndstate=&cndparty=&orderby=
or
https://campaignmoney.com/political/contributions/robert-arnott.asp?cycle=16
or Dark Money which is worse:
https://opensecrets.org/dark-money/top-election-spenders
Regards,
Ted
https://www.bloomberg.com/view/articles/2018-08-20/reporting-corporate-earnings-daily-would-end-short-term-focus