Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

Dimon, who also leads the Business Roundtable group, and Buffett co-wrote an article about why they think quarterly profit forecasts are hurting the economy.

Warren Buffett has joined forces with Chairman and CEO of J P Morgan Chase Jamie Dimon to convince chief executive officers to end the practice of quarterly profit forecasts, reported CNBC. "We are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance".

Dimon said CEOs can influence their quarterly results by not opening branch offices, cutting research and development spending, reducing their marketing and other decisions that could hurt future earnings.

"Public companies should be managed for long-term prosperity, not to meet the latest forecast". That's not too surprising given the Dimon is now the chair of the Business Roundtable.

More news: AI trained on violent Reddit images turns into death-obsessed psychopath
More news: Deal's OFF!! Nabil Fekir to stay put as Lyon make public declaration
More news: McConnell cancels August Senate recess, leaving Democrats vulnerable

FILE PHOTO: Jamie Dimon, CEO of JPMorgan Chase, takes part in a panel discussion about investing in Detroit during a panel discussion at the Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., April 11, 2018. JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from U.S. tax reform, partly offset by gains from higher interest rates.Net income for the quarter ending December 31 was $4.2 billion, down 37 percent from the year-ago period.

Although we've seen no immediate opposition to the proposed elimination of quarterly EPS guidance, it's not hard to imagine what at least one argument might be: just because companies don't publish the number does not mean they won't calculate such a number. Missing "the number" can often result in big, short-term stock moves. "Such short-termism is unhealthy for America's public companies and financial markets - which are critical to economic growth and financial prosperity", Business Roundtable said in a statement. Public companies owe it to all of them to get this right, they said.

Those in favor of guidance say it improves communications with Wall Street, reduces share price volatility and boosts a stock's value.

Neither Buffett and Dimon nor the Business Roundtable is arguing against quarterly or annual reports from public companies.

Related Articles

  • Netanyahu: Iran nuclear deal is in fact dead

    Netanyahu: Iran nuclear deal is in fact dead

    Mr Netanyahu blamed Assad directly for allowing Iranian troops to become entrenched within Syria and in turn threaten Israel. He heads later Wednesday to London for meetings with British Prime Minister Theresa May and Foreign Secretary Boris Johnson.
    Trump gives relationship with G7 countries 10 out of 10

    Trump gives relationship with G7 countries 10 out of 10

    On Saturday, Giuseppe Conte was heading home to Italy as a fully-fledged member of the most exclusive club of world leaders. Trump fired back at the world leaders, attacking both Trudeau and Macron on Twitter the day before the summit.
    Trump congratulates Cox on 2nd place win in CA

    Trump congratulates Cox on 2nd place win in CA

    Bob Menendez appears a shoo-in to become his party's nominee, but he must fend off a primary challenger to make it official. Southern New Jersey's 2nd District spans all or parts of eight counties and includes the shore resort of Atlantic City.
  • Putin says ready to meet Trump ‘as soon as’ Washington is ready

    Putin says ready to meet Trump ‘as soon as’ Washington is ready

    Pakistani President Mamnoon Hussain and Indian Prime Minister Narendra Modi are also attending the meeting. Xi spoke at an opening banquet in the Qingdao Olympic Sailing Centre before taking in a fireworks display.
    Arjun Tendulkar named in U19 squad for Sri Lanka tour

    Arjun Tendulkar named in U19 squad for Sri Lanka tour

    Arjun, however, could not find a place in the one-day squad which will play five matches against the Island nation. The team will be coached by former India batsman WV Raman, with Rahul Dravid away for India A tour to England.
    England finish World Cup prep with win over Costa Rica

    England finish World Cup prep with win over Costa Rica

    And he also made 35 appearances for the club last season, so why would they let him leave? "The goal was world-class". England's rhythm was then stunted by five quickfire substitutions, including a debut for Burnley's Nick Pope in goal.
  • Trump Leaves G-7 Summit With A Call To End 'Unfair' Trade

    Trump Leaves G-7 Summit With A Call To End 'Unfair' Trade

    But photos of the meeting revealed the obvious tension between Trump and the other leaders, and show a president who appears to be isolated.
    Trump Will Ask NFL Players Who Kneel During Anthem To Recommend Pardons

    Trump Will Ask NFL Players Who Kneel During Anthem To Recommend Pardons

    He offered to let them name people they feel were unfairly treated by the justice system and he would pardon them. You shouldn't go in a locker room when our national anthem is played", Trump said .
    Details of Harry Kane's new deal at Tottenham revealed

    Details of Harry Kane's new deal at Tottenham revealed

    Secondly, and just as importantly, Levy will nearly assuredly pay his other élite players the salaries they so clearly deserve. One of those record attempts would be ended if Kane left North London, and both would be scuppered if he moved overseas .
  • UK top court says can't enforce abortion law change in Northern Ireland

    UK top court says can't enforce abortion law change in Northern Ireland

    Anyone who unlawfully carries out an abortion could be jailed for life. "This feels like a huge relief". Theresa May was today urged to defy her DUP backers and to decriminalise abortion in Northern Ireland.
    Kremlin floats Vienna as possible host of Trump-Putin meeting

    Kremlin floats Vienna as possible host of Trump-Putin meeting

    Tension between President Donald Trump and traditionally close US allies has overshadowed that global meeting. President Obama duly left such a letter for President Trump , as President Bush did eight years earlier.
    Trump wants Russian Federation  to rejoin G-7

    Trump wants Russian Federation to rejoin G-7

    In a statement issued following Mr Trump's tweets, Mr Trudeau said he remained focus on what was accomplished at the G7 summit. The other G7 leaders will meet without Trump for the rest of the day, discussing climate change and global development.