By John Q. Hosedrinker 
Former President Donald Trump suggested changing the current quarterly earnings report system to a semiannual one, citing potential cost savings and a focus on long-term company management. This proposal, contingent on SEC approval, echoes concerns raised by figures like Warren Buffett and Jamie Dimon, who have criticized the emphasis on short-term profits. While current regulations mandate quarterly reporting in the U.S., some argue that the increased transparency outweighs the drawbacks, and other global markets, like the U.K., already operate with semiannual reporting.
Read the original article here
Trump advocates that companies stop reporting earnings on a quarterly basis – a move that’s sparking quite a bit of chatter, and not exactly the good kind. The core idea is simple: he’s suggesting that publicly traded companies should ditch their quarterly earnings reports, which are, you know, the regular snapshots of how a company is doing financially. The argument, or at least the implication, seems to be that this would allow companies to focus on longer-term strategies, like how China views their company operations with a long-term perspective. But, as you might guess, there’s a whole lot more to it.
The immediate reaction, well, it’s not exactly glowing. The first thing that pops into mind is that this feels like a classic move to hide bad news. No reporting means no bad news. The economy, you see, might be heading south, and what better way to avoid criticism than by making the numbers disappear? It’s like the economic version of “stop the count”. And, let’s be honest, if things were going swimmingly, wouldn’t you want to shout the good news from the rooftops? It’s hard to shake the feeling that this is about delaying the inevitable, like kicking the can down the road.
One of the big problems with this proposal is that it seems to fly in the face of transparency. Companies are generally expected to pay attention to their finances at least month to month. So what’s the point? Investors, the public, and even the companies themselves, rely on these reports to understand how things are going. And, frankly, it’s hard to imagine investors being thrilled with a system where they have less information, not more. Would investors want to buy stock without having earnings in the public domain?
Of course, the argument can be made that quarterly reports encourage short-term thinking, pressuring companies to focus on immediate profits at the expense of long-term growth. Maybe, just maybe, semi-annual reporting could encourage a bit more long-term strategy. However, there’s also a massive historical precedent for hiding losses better a la Enron. And the current proposal sounds awfully similar to avoiding bad news.
Looking back, it’s tough to ignore the context. The concern that this is another attempt to obfuscate. If the reports were good, wouldn’t they be on a monthly basis? It’s hard not to connect the dots, particularly with concerns about the effects of the Trump administration’s tariffs. It’s easy to see how these changes could be used to obscure the true economic picture. But the numbers don’t lie. People will absolutely feel the pain, and hiding the numbers won’t change that.
The question is, what would actually happen if this were to happen? Well, the stock market might not react so well. And it’s easy to see how it could undermine trust and increase market volatility.
There’s also a distinct lack of understanding about how businesses operate, and how to hide and embezzle. How can you operate if you only measure your business every 3 months? Then, there’s the hypocrisy. If things are going well, you’d want to show off. If you’re against these types of reporting, you are hiding something. Trump’s business sense is “how can we grift better.”
It’s easy to see the skepticism, especially given the history. And the reaction is understandable, it does smack of an effort to control the narrative. It’s proof the economy is doing great! So….if you stop releasing the company results, then the public and stockholders won’t know they’re bad…and…maybe I can get through the midterms before you realize how bad the economy is doing? The idea that quarterly reports are the root of all evil seems a little extreme. In the end, the whole thing feels like a move designed to protect a specific image, not necessarily the long-term health of the economy.