Published: Sun, June 10, 2018
Medical | By Johnnie Horton

Jamie Dimon, Warren Buffett urge CEOs to end quarterly earnings forecasts

Jamie Dimon, Warren Buffett urge CEOs to end quarterly earnings forecasts

"It can put a company in a position where management from the CEO down feels obligated to deliver earnings, and therefore may do things that they wouldn't otherwise have done", Dimon said.

They also said they have found a person to head up the venture that their two companies, plus Amazon, are forming to attack the health care system's high costs and quality problems.

In their op-ed piece, Buffett and Dimon argue that "effective long-term strategy drives economic growth and job creation" and that quarterly EPS guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability".

In the latest appeal, they said companies often hesitate to spend on technology, hiring, and research and development to meet quarterly earnings forecasts that can be affected by seasonal factors beyond their control. The analysts take the company guidance into consideration when making investment recommendations and setting price targets for stocks.

Chinese government hackers reportedly stole trove of sensitive U.S. naval data
China has also stepped up pressure on its neighbour Taiwan, prompting U.S. nuclear bombers to swoop on the South China Sea. Data stolen in the breach include plans for a supersonic missile project, USA officials told the Washington Post .

Warren Buffett and business friend Jamie Dimon argued Thursday that publicly traded businesses can damage their long-term growth and hurt their shareholders by forecasting their earnings every three months and then making short-term decisions to "make the number".

Buffett's Berkshire Hathaway doesn't give guidance, which Buffett has said can tempt executives to manipulate numbers to meet Street expectations. The two business gurus said quarterly financial guidance encourages short-term thinking that stifles growth and limits innovation in the economy. Buffett and Dimon said Thursday that a CEO has been hired to lead that effort, and the companies expect to announce that choice within the next couple weeks. "We are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance".

Proponents of the practice say it improves communications with investors and ultimately results in fewer, not more, wild swings in stock prices.

Back in September, Dimon said bitcoin "wasn't going to work" and called it a "fraud" at an investor conference.

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