President Trump has made a serious proposal that deserves serious discussion. Currently, companies traded on stock exchanges are required to report their financial condition and certain other changes every quarter or four times annually. He has proposed that should be changed to every six months or semi-annually.
The debate makes for strange bedfellows. Agreeing with the President, we see most corporate managers and most economists. Disagreeing with the President, we see the investment community and the media.
Corporate managers and economists have long complained of “short-termism.” How can a company make long-term plans and allocate its resources effectively for the long-term, if it is being graded every three months?
The investment community and the media ALWAYS wants more transparency, never less. The only reason for less transparency is to hide something, or so they say.
If the President had asked for reports every five years instead of every three months, that would have been too much, but every six months is fine! The SEC should approve the President’s proposal.