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tiptrot.com June 24, 2018


Buffett, Dimon urge end to quarterly profit forecasts | AP business

09 June 2018, 08:42 | Cedric Leonard

Berkshire Hathaway Chairman and CEO Warren Buffett speaks during an interview in Omaha last month

Buffett Dimon make plea to halt quarterly guidance so management can think long-term

Despite the short-term hit to results from the tax bill, chief executive Jamie Dimon hailed the measure as a boon for the U.S. economy."US companies will be more competitive globally, which will ultimately benefit all Americans", Dimon said in a news release. "When companies get where they're sort of living by so-called making the numbers, they do a lot of things that really are counter to the long-term interests of the business".

Warren Buffett, Jeff Bezos and Jamie Dimon have picked a leader for their health care venture.

The pressure to meet short-term estimates has contributed to a fall in the number of U.S. public companies, wrote Buffett, the chairman of Berkshire Hathaway, and Dimon, who is also the chairman of top executives' lobbying group Business Roundtable, in a Wall Street Journal article on Wednesday.

"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.

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.


So they should stop the forecasting, the two men said. CEO Jamie Dimon appealed for radical changes to the way public companies disclose financial information.

They told companies to move away from providing quarterly guidance. "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.

Dimon said the Business Rountable has been quite clear that it doesn't think tariffs are the way to do it. They offered "common-sense" recommendations for public companies to improve governance and relations with shareholders. "We're hoping a bunch of companies drop it right away". 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.

Dimon said Thursday that about 20 percent of Business Roundtable members still do quarterly guidance and about 60 percent provide annual targets.



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