Trump’s Proposal on Earnings Reports
Donald Trump wants corporations to report their results every six months instead of every three months.
He added that his idea will help companies save money and plan for the long term.
Experts have different opinions, saying that companies could profit and investors could be worried.
Announcement and SEC Approval
Donald Trump announced on Monday that public corporations should declare their earnings reports every six months instead of every three months. This move needs to be approved by the SEC.
A lot of people who work in the market don’t agree with the idea.
Trump believes it would let companies plan for the long term and cut down on the costs of disclosing their finances.
Trump’s Statement on Truth Social
In a post on Truth Social, he said:
“This will save money and let managers focus on running their businesses well. Did you ever hear the saying, ‘China has a 50 to 100 year outlook on how to run a business, whereas we do it every three months? Not good!!!'”
Historical Context and Previous Support
He has talked about this topic before, including during his first term.
Some people, like Jamie Dimon and Warren Buffett, at least partly agree with Trump’s view. In 2018, the two authored an op-ed stating that firms should stop giving quarterly guidance because it encourages short-termism.
They wrote:
“The pressure to meet short-term earnings reports has led to a drop in the number of public companies in America over the past 20 years.”
“Capital markets that focus on the short term have made it hard for companies with a longer-term view to go public, which has hurt the economy by limiting innovation and opportunity.”
But Trump’s suggestion goes further than what Dimon and Buffett recommended.
Mixed Reactions from Market Experts
On Monday, many in the market who talked to Business Insider had different opinions on the idea of firms only releasing results twice a year.
Supportive Views
Dominic Pappalardo, Chief Multi-Asset Strategist at Morningstar Wealth, highlighted positives.
He said a six-month reporting schedule would reduce stress for firms and risk for investors.
“If you slow down that cycle, they might feel less pressure and be able to look at things from a longer-term perspective instead of worrying about what’s coming in one, two, or three months.”
Paul Hickey, co-founder of Bespoke Investment Group, agreed that fewer reports could save corporations money and reduce short-term pressures.
He compared it to politics:
“With a six-year term in the Senate, things tend to be more stable and less volatile than the House, where members run every two years.”
Critical Views
Kristin Hull, CIO and founder of Nia Impact Capital, expressed skepticism.
“As an active investor, we want companies to be open with us about what’s going on. But we also want them to work on long-term goals. Changing reporting frequency won’t achieve that.”
Hull concluded that simply moving from three months to six months wouldn’t automatically lead to stronger strategic thinking.
Impact on Investors
Retail investors are one group strongly against the change. Many argue that switching to semi-annual reporting could hurt ordinary investors who rely heavily on quarterly earnings reports and executive comments.
Professional investors have access to in-depth research and sell-side analysis, but retail traders often depend directly on company-released results.A Reddit user sarcastically commented in the r/StockMarket community:
“So less transparency and accountability sounds like a great idea!!”
The post received nearly 2,000 upvotes and 500 comments.
