EDITORIAL: Sage advice on short-termism from Warren Buffett and Jamie Dimon
Two of the US’s figurehead businesspeople, Berkshire Hathaway chairman Warren Buffett and JPMorgan Chase CEO Jamie Dimon, last week wrote an op-ed in the Wall Street Journal encouraging companies to stop giving earnings guidance. It is counter to the trend of the past few decades towards greater transparency in 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," they wrote. Their call came not only from the duo individually but also from the organisation that Dimon chairs, the Business Roundtable, an organisation akin to Business Leadership SA in SA. In some ways their call is not strictly relevant to SA since only a few companies provide quarterly earnings, mostly the gold companies since they have a large contingent of American investors, and none provide earnings guidance in the way that US companies do. But in a broader sense their call reflects a trend...
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