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

Bitcoin Surprise Surprise! Jamie Dimon and Warren Buffet Still Don’t like Bitcoin Rick D

Berkshire Hathaway CEO Warren Buffett and JPMorgan CEO Jamie Dimon cowrote an op-ed article published Wednesday by The Wall Street Journal.

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.

Dimon , the chairman of the Business Roundtable, said the group of CEOs has thrown its support behind companies backing away from the practice.

It is a long-simmering debate but one that has gotten more attention in an era when activist investors are more vocal about pushing companies to deliver on their promises. "Public guidance was the fix for many companies".

Berkshire Hathaway does not give earnings guidance as Buffett has said that executives can be tempted to manipulate figures to meet Wall Street analysts' expectations.




JPMorgan CEO Jamie Dimon, who has made negative comments about the cryptocurrency in the past, said during an interview Thursday with CNBC that while he doesn't want to be a "bitcoin spokesperson", buyers should "beware".

According to Buffett and Dimon, the focus of companies on short-term profits run counter to the long-term interests of the business.

"In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability", Buffett and Dimon wrote.

Proponents of the practice say it improves communications with investors and ultimately results in fewer, not more, wild swings in stock prices.

But McKinsey & Co. found in a 2006 study that quarterly guidance didn't affect valuation multiples and didn't reduce share price volatility. They have said the practice of telling Wall Street what to expect from earnings can distort management's priorities. At JPMorgan's investor day in February, he called on companies to stop providing the guidance, saying earnings are hard to predict and companies have an incentive to fudge numbers. But, he added, taking a stand on the issue is "a first step".

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