Buffett And Dimon: No More Quarterly Profit Forecasts

Buffett And Dimon: No More Quarterly Profit Forecasts

At JPMorgan's investor day in February, he called on companies to stop providing the guidance, saying earnings are hard to predict and companies have an incentive to fudge numbers.

The billionaire investor Warren Buffett and JPMorgan Chase's CEO, Jamie Dimon, have voiced concerns that the financial markets' focus on short-term goals is hurting the economy and urged companies to move away from providing quarterly earnings guidance.

The two men noted that companies often hesitate to spend on technology, hiring, and research and development in order to meet quarterly earnings guidance that can be impacted by seasonal factors beyond their control, such as political events and even weather.

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".

Dimon, who leads the Business Roundtable, an association of chief executive officers of leading United States companies said the move is supported by the group, added the report.

Executives often feel pressure to make quarterly forecasts, but "it can often 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 in a rare joint interview with Buffett airing Thursday on CNBC's Squawk Box . Dimon said he could generate hundreds of millions of revenue for the bank by agreeing to some interest rate swaps.

John Beilein Announces He’s Staying At Michigan
The Pistons are planning to advance the three candidates to meet with owner Tom Gores , sources said. Beilein's revised contract at MI was in the works prior to his discussions with the Pistons .

Star Wars Jedi Fallen Order Arriving Holiday 2019
The concept does sound pretty good though. " Jedi Fallen Order " is expected to launch during the holiday season next year. This new Star Wars game was announced at last year's E3, but don't expect any further reveals on it until next year.

Thousands gather for 'Trooping the Colour' for Queen Elizabeth
It all sounds pretty traditional but the Duchess overlooked one royal fashion rule: wearing an off-the-shoulder dress. Meghan is fitting right in. "I'm quite proud and I know that a lot of other people are proud of me as well".

"I've never seen a company whose performance has improved by having some forecast out there by the CEO that we're going to earn X", Buffett said.

"Public companies should be managed for long-term prosperity, not to meet the latest forecast".

The guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability", the two powerful CEOs wrote in a commentary piece in the The Wall Street Journal.

Buffett and Dimon also blamed the practice for contributing to the decline in the number of public companies in the USA over the past 20 years.

The health-care venture between Berkshire Hathaway Inc., Amazon.com Inc. and JPMorgan Chase & Co. has picked the person who will lead the initiative.

Related Articles

  • The decades-long drive to rid North Korea of nuclear weapons

    The decades-long drive to rid North Korea of nuclear weapons

    But following a visit to the USA from Kim Yong Chol , a top North Korean official, Mr. Asked how he would be able to make such a distinction, he said: "My touch, my feel".
    CM Punk On If He's Going To Attend All In

    CM Punk On If He's Going To Attend All In

    An interim welterweight title fight between Rafael dos Anjos and Colby Covington will co-headline UFC 225 . Under the rules of the Illinois State Athletic Commission, Romero was allowed two hours to cut one pound.
    Twitter reacts to news of Anthony Bourdain’s death

    Twitter reacts to news of Anthony Bourdain’s death

    The state also has a higher rate of suicide among young people. "I'd love to see whatever we can do". According to the CDC, suicide rates increased in nearly every state between 1999 and 2016.
  • Donald Trump asks USA  representatives not to endorse G7 Summit communique

    Donald Trump asks USA representatives not to endorse G7 Summit communique

    President Donald Trump told reporters on Friday that he thought Russian Federation should be reinstated as a member of the G8. During the summit, Trump had changed the photo on his Twitter page to the "family photo" taken with other G7 leaders.
    Many have their doubts about Trump-Kim summit

    Many have their doubts about Trump-Kim summit

    That was followed by a surprise and rapid diplomatic thaw that survived Trump's abrupt cancellation of the summit late last month. But classmates of the future president said that while there, he got a firsthand taste of the terrors of the atomic age.
    Battlefield V is Getting Battle Royale Mode After All

    Battlefield V is Getting Battle Royale Mode After All

    As you might've expected, Battlefield V received an explosive new trailer during EA's E3 2018 press conference. Don't expect to hide from tanks in buildings, because they can just smash through them now.
  • Cristiano Ronaldo's wish to leave Real Madrid is 'irreversible'

    Cristiano Ronaldo's wish to leave Real Madrid is 'irreversible'

    Both Ronaldo and Bale hinted they could leave Real after the 3-1 win over Liverpool in the Champions League final last month. We all want Ronaldo to stay and Neymar has our doors wide open", Marcelo said.
    Chazelle's First Man, Official Trailer #1

    Chazelle's First Man, Official Trailer #1

    Kyle Chandler , Corey Stoll , Jason Clarke and Brian d'Arcy James are also part of the cast, among others. Welcome to #TRAILERCHEST where we're taking a sneak peek at the brand new trailer for First Man .
    Feisty Halep to face chilled out Stephens in Paris

    Feisty Halep to face chilled out Stephens in Paris

    After racing through the first set, Halep saved three break points in a marathon ninth game of the second which lasted 13 minutes. If Halep was able to handle the cross shots of Muguruza and Kerber, she should have the ability to control this match as well.
  • Kunduz attack claims the lives of 24 ALP and Public Uprising forces

    Kunduz attack claims the lives of 24 ALP and Public Uprising forces

    The Afghan government says the ceasefire will last for a week and will exclude Daesh and other terror groups. Taliban spokesman Zabiullah Mojahid claimed responsibility for the attack in a statement to media.
    Crude oil futures up 0.74 pc on overseas cues

    Crude oil futures up 0.74 pc on overseas cues

    When the United States announced it would reimpose sanctions on Iran in November, Ice Brent futures rose by $2.36/bl on the day. Further weighing on prices has been surging US output, which hit another record last week at 10.8 million bpd.
    Origin Access Premier is EA’s New PC Games Subscription Service

    Origin Access Premier is EA’s New PC Games Subscription Service

    EA didn't provide any specifics on how much the service will cost, and only mentioned that it will be launching later this summer. Being a member also means games from other publishers such as Batman: Arkham Asylum, INSIDE, The Witness, and more are playable.