Trump asks SEC to study potentially scrapping quarterly earnings reports

What matters is cash flow and guidance. That is pumped up through short term investments that lead to long term problems. There is no real time frame because it is a dynamic process of short term investments. There is no goal even except to make more money. The cult of cash flow. These companies revolve around having cash flows to please analysts.

I wasn't trying to downplay that. I was just saying financials are not a single picture in time. P&L is the period, balance sheet is a picture the day of and cash flow is a hybrid. You can't completely hide bad indicators with the final picture. Speculation is it's own thing but I'm talking about just objectively looking at what they report. A ton of traders have formulas to get to where they believe the stock is valued.
 
It would have prevented the lowering of the bar, and the loss of American wealth.

It's 25 years too late, and it's what Independants that voted left have been pissed about since the mid 90s.
 
I agree with it but since it’s Trumps idea, I’ll fight it to the death. He’s literally hitler.

Why do you post this?

It's like you Trump supporters can't fathom good faith discussion so you only shit post. If you actually looked at the responses to this thread, you'd see persons who definitely don't like Trump (like @Jack V Savage) who nonetheless support this policy move, at least tentatively. I mean, do you actually have an opinion on this policy? Do you care enough to look it up and form one?

Hell, I began my OP by stating that I'm conflicted on the issue and see the upside to it. FFS, non-supporters of Trump can't even walk on egg shells: if we say anything that isn't baldly supportive of his policies, which are most often bad policies that serve only the rich and hurt folks like you, it's automatically a straw man argument where we're opposing it blindly.

It would have prevented the lowering of the bar, and the loss of American wealth.

It's 25 years too late, and it's what Independants that voted left have been pissed about since the mid 90s.

Please explain (particularly with the last part, although I would obviously take issue with quarterly reporting triggering the loss of wealth through the market).
 
Why do you post this?

It's like you Trump supporters can't fathom good faith discussion so you only shit post. If you actually looked at the responses to this thread, you'd see persons who definitely don't like Trump (like @Jack V Savage) who nonetheless support this policy move, at least tentatively. I mean, do you actually have an opinion on this policy? Do you care enough to look it up and form one?

You're responding to someone on my ignore list, but there's a huge partisanship gap that I think makes both sides hard to understand to the other one.

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Etc. Especially lower-end right-wing types simply can't conceive of evaluating policy on its merits.
 
Hmm. I can see some value in the idea. Some cons, too. I'll have to think about it. If it really is just asking the SEC to consider it, that's a good idea.

PCAOB firms would definitely be pissed. You'd still have to file 8-ks for any material events. Personally, i could do without quarterly earnings calls.

One idea would be to put it to shareholder vote. If shareholders want a longer term vision company, they can vote for 2 earnings calls a year. If they are execution oriented, they can stick with 4 per year.
 
It's something that seems good at first blush but, ultimately, I think the cons outweigh the pros. Quarterly earning reports are for the shareholders to understand what is happening in the companies in which they are invested. I understand the role it plays in short term decision-making but that's a perversion of it's core, and far more important, role.

Eliminating the reports would essentially deprive investors of valuable information surrounding their investments. I wouldn't go longer because I think 6 months or a year between updates is deleterious to the shareholder. I would support going shorter but I don't have a strong argument for why it's better.

The better fix, and I think they allude to it, is finding a way to reduce the fiscal incentive for acting on the information by internal stakeholders.
 
Trump at least isn't DEMANDING that the SEC make any decision at this time.

He's only "asking" for them to "consider it". Capeche?
 
Yea, I can see the pros matching the cons on less reports in the sense, you have a bad one and you have a longer time dealing with it compared to a good one.


Not really. Quarterly earning are a minimum reporting requirement. Companies would be free to release positive reports whenever they like.
 
Not really. Quarterly earning are a minimum reporting requirement. Companies would be free to release positive reports whenever they like.
I was wondering if there options to release more frequently or possibly mid-quarter if they wanted to show changes. If they do that, is it still released with the same liability in being accurate as a quarterly or annual report?
 
I was wondering if there options to release more frequently or possibly mid-quarter if they wanted to show changes. If they do that, is it still released with the same liability in being accurate as a quarterly or annual report?

I'm not sure about liability. They seem to hedge now by calling things "guidance."
 
I wasn't trying to downplay that. I was just saying financials are not a single picture in time. P&L is the period, balance sheet is a picture the day of and cash flow is a hybrid. You can't completely hide bad indicators with the final picture. Speculation is it's own thing but I'm talking about just objectively looking at what they report. A ton of traders have formulas to get to where they believe the stock is valued.


All I know is accountants are tricksters/conmen. lol. There are ways to hide things and make things rosier than they appear. A trained eye can probably detect it all but still. I have just started learning about the subject and there are many traps. Non GAAP numbers are also becoming more relevant and paint a rosier picture. Nearly all major companies report some kind of adjusted numbers now.
 
It's something that seems good at first blush but, ultimately, I think the cons outweigh the pros. Quarterly earning reports are for the shareholders to understand what is happening in the companies in which they are invested. I understand the role it plays in short term decision-making but that's a perversion of it's core and, far more important, role.

Eliminating the reports would essentially deprive investors of valuable information surrounding their investments. I wouldn't go longer because I think 6 months or a year between updates is deleterious to the shareholder. I would support going shorter but I don't have a strong argument for why it's better.

The better fix, and I think they allude to it, is finding a way to reduce the fiscal incentive for acting on the information by internal stakeholders.

It is actually kinda similar to terms for Senators and Reps. How can these guys get anything done when they spend so much time campaigning? Every 2 years for Reps. Their job is getting reelected as much as anything else. Everything revolves around that. Just like everything revolves around earnings reports. We run into the same problems too. If we have too much time between elections then the politicians are not being held accountable as much, but if we have frequent elections then everything just becomes about being elected.
 
It is actually kinda similar to terms for Senators and Reps. How can these guys get anything done when they spend so much time campaigning? Every 2 years for Reps. Their job is getting reelected as much as anything else. Everything revolves around that. Just like everything revolves around earnings reports. We run into the same problems too. If we have too much time between elections then the politicians are not being held accountable as much, but if we have frequent elections then everything just becomes about being elected.

I have nothing against your opinion but it is off topic here.
 
All I know is accountants are tricksters/conmen. lol.

@Gandhi @Cubo de Sangre @PolishHeadlock

There are ways to hide things and make things rosier than they appear. A trained eye can probably detect it all but still. I have just started learning about the subject and there are many traps. Non GAAP numbers are also becoming more relevant and paint a rosier picture. Nearly all major companies report some kind of adjusted numbers now.

Obviously some modified non-GAAP financials would paint a rosier picture if they cared to make those. People would be dumb to look at those as credible unless it's IFRS or something standard. With the SEC you use GAAP. If you think GAAP is just a bunch of bs and you are an investor, you really are entirely into speculative trading. The entire set up of the SEC is for accurate reporting and completely fucking over people who don't do it accurately.
 
I feel like this change will make investing more speculative, and more risky; less information is never a good thing.

What are the actual costs for a listed business to prepare quarterly versus twice a year.
As another poster said, these are metrics that are already taken on a daily basis, so the cost to collect the data doesn't go down, just the cost of reporting it. Preparing and mailing prospectuses to 20k shareholders is like a million on companies with billion dollar revenues.
 
@Gandhi @Cubo de Sangre @PolishHeadlock



Obviously some modified non-GAAP financials would paint a rosier picture if they cared to make those. People would be dumb to look at those as credible unless it's IFRS or something standard. With the SEC you use GAAP. If you think GAAP is just a bunch of bs and you are an investor, you really are entirely into speculative trading. The entire set up of the SEC is for accurate reporting and completely fucking over people who don't do it accurately.

A lot of SEC guidance around non gaap financials, I know first hand how painful SEC reviewers are on things like Asjusted EBITDA.

GAAP and SEC oversight of non GAAP measures is the only thing keeping the data somewhat comparable and faithful to reality. People that bitch about GAAP are a lot like people that hate regulations in general without being able to provide a realistic alternative once you dig a bit into it.

Cash is king, ok so one year I have a big receivable that gets collected one day after year end, should I ignore that? Can I hide expenses by pushing out payment? Is the 10 mill I borrowed the same as earning 10 mill? These basic points illustrate why you need accounting frameworks.

Yeah there are a ton of games, that is true of any measurement system, but are there more criminals in accounting than say finance, law, CEO’s, operations?

I highly doubt it. At the end of the day the only relevant question is if accountants and the overall profession is adding stability or not. Without a doubt it’s the former.

Now as far as not reporting quarterly, I suspect that most companies would choose to it anyway. Investors are not going to wait 365 days, 90 -180 days after the year end, to find out what is going on with their money. Many companies already give earnings warnings.

Questioning the form reporting should take and if it’s obligatory is ok, but it’s hardly some important priority that Trump should be expending any political capital on. Sort of a waste of time from that perspective.
 
I'm conflicted as to this move. On one hand, moving American corporations away from short-term pressures and allowing greater emphasis on long-term development is a good thing.

On the other hand, I cannot imagine this move having any tangible effect on those incentives, other than a marginal reduction of administrative costs. In reality, this would seem to, more than anything, undermine transparency and allow more greater incidence of insider trading and ripping off investors generally.

While the purported objective - widening the scope of corporate decision making away from decisions based on quarterly earnings - has merit, I am skeptical that depriving investors of information is the proper avenue to achieve it. This smacks of more policy making for the powerful.

@JonesBones @PolishHeadlock @Jack V Savage - what say you?



https://www.ft.com/content/c1d133aa-a211-11e8-85da-eeb7a9ce36e4

Missing key experts :)
 
Let's remember that corporate America currently has the option of not working to the quarterly report.

Those companies that work to the quarter would prob still work to earnings guidance and all that crap. Smart companies would ignore this effect.
 
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