September 24, 2018

Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

09 June 2018, 05:28 | Silvia Roy

Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

Warren Buffett, Jamie Dimon: Quarterly profit forecasts hurt economy

Buffett, chairman and CEO of Berkshire Hathaway Inc., and Dimon, chairman and CEO of J.P. Morgan Chase & Co., said in a joint Wall Street Journal editorial that they are encouraging all public companies to move away from the practice. The group said public companies should be managed for long-term prosperity, not to meet the latest forecast.

"Quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability", they said.

They argue that short-term guidance has encouraged companies to hold off on technology spending and hiring and research, and has even discouraged many private companies from going public at all.

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In the quarter-finals, he even dropped his first set in Paris since 2015 to Diego Schwartzman before sprinting to a four-set win. And the strength that he has and the mentally, everything is ideal , works flawless for him playing in clay", Del Potro added.

"We think the president has raised some very critical issues about trade, especially with China, around state owned enterprises, fair competition, market access, the ability to own 100% of a company, and these things should be negotiated out and the Business Roundtable supports those issues", Dimon said. 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.

Dimon said the Business Rountable has been quite clear that it doesn't think tariffs are the way to do it. "Public guidance was the fix for many companies".

Meanwhile, billionaire investor Warren Buffett and Berkshire Hathaway Vice Chairman Charlie Munger told FOX Business' Liz Claman last month that bitcoin was "more expensive rat poison", after previously comparing it to the deadly chemical five years ago.

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Dimon has blasted excessive reporting requirements and the short-term focus of quarterly earnings.

However, those favouring the practice vouch that it improves communications with Wall Street, reduces share price volatility and boosts a stock's value, the report said.

But Buffett says the practice of CEOs providing a heads-up on how earnings-per-share results are shaping up often causes them to make poor decisions to ensure that the company beats or meets the results they've communicated to Wall Street.

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