Elliott's Singer agrees with Buffett, Dimon on profit guidance

Ebony Scott
June 10, 2018

In the CNBC interview, JP Morgan Chase CEO Jamie Dimon told the host "just beware" of bitcoin and described how he doesn't "want to be a bitcoin spokesman".

The health-care venture between Berkshire Hathaway Inc., Amazon.com Inc. and JPMorgan Chase & Co. has picked the person who will lead the initiative.

This combo of file photos shows Warren Buffett attending the Forbes 100th Anniversary Gala in New York on September 19, 2017, left, and JP Morgan Chase Chairman and CEO Jamie Dimon on the floor of the New York Stock Exchange on July 12, 2013.

In their op-ed piece, Buffett and Dimon argue that "effective long-term strategy drives economic growth and job creation" and that quarterly EPS guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability".

Companies often hold back spending on technology, hiring and research and development to meet quarterly earnings guidance that may be affected by factors outside the company's control, the business leaders wrote.

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Besides their positions as business executives, Dimon is chairman of the Business Roundtable, an organization of about 200 top executives. CEO Jamie Dimon appealed for radical changes to the way public companies disclose financial information. JPMorgan Chase reported lower fourth-quarter earnings January 12, 2018 on weak trading revenues and one-time costs from United States tax reform, partly offset by gains from higher interest rates.Net income for the quarter ending December 31 was $4.2 billion, down 37 percent from the year-ago period.

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

More than 100 million Americans invest in public companies directly or through mutual funds and millions more participate in corporate, public and union pension plans.

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.

"Short-term-oriented capital markets have discouraged companies with a longer view from going public at all, depriving the economy of innovation and opportunity", Buffett and Dimon wrote.

Other reports by GizPress

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