No. of Recommendations: 33
It seems unfortunate that so many people confuse two things
* Quarterly reporting, and its pros and cons
* Investors (and sometimes managers) placing undue emphasis on the short term numbers in the report, and the pros and cons of that
I'm very much in favour of the first one. Things going wrong get spotted sooner and in general there is a closer match between what is going on and what investors think is going on, both of which helps both rational investors and prudent societal capital allocation.
The second item is dumb, and should be discouraged. Investors can and will do whatever dumb thing they want no matter what you tell them, so most of the discouragement would be anything managers might do that is counterproductive.
Banning the first one won't fix the second one, as investors and managers will just shift to using short term news and press releases and rumours, both true and false.
Besides, if the problem is managers manipulating things to "tweak" results every three months, a switch to every six months would presumably just lead to twice as much tweaking half as often.
Of course longer gaps between reports will help keep investors in the dark that much longer, making it easier for the unscrupulous to take advantage of them for longer, increasing the aggregate money flow from the chum to the sharks. Which could perhaps be the point of the mooted change.
Jim
