This seems like a solid idea:
Um, no, it really isn’t. Less transparency is bad for investors, who will require a greater premium due to enhanced risk from less information. This in turn will deflate stock prices.
If we want to incentivize companies to invest in more innovative products and services, ie be more long term oriented, there are simpler ways to do this. Like with a R&D tax credit.
If this is going to hurt investors, why was the idea proposed by Warren Buffett and JD Morgan? Last I checked, neither was in the business of losing money for their investors.
Not having to answer to projections every three months seems like common sense in terms of allowing companies to implement long term strategies that may take a bit to get going.
I don't know what the effect will be on investors. That's harder to parse out.
I just don't get the problem we are trying to solve. Once I can understand that, then I can assess whether semi-annual reporting is better than quarterly.
From what I've seen in the news and twitter, etc, it seems like the concern is that firms are not investing for the long term. If that's the issue, then what is the evidence of this, other than griping by executives? I don't see investors complaining about this. I don't see a drop in corporate spending on R&D. In short, I see no evidence of a "short termism" problem.
Even if there is evidence that we have a "short termism problem" and companies are not investing for the long term, then we need a discussion about what tools are the best way to address it. Sure, changing reporting requirements seems like one such tool. But it seems like a really indirect tool.
Why not R&D tax credits? Seems very direct.
Why not mandating that executives have pay that is tied to long term performance? Seems more direct.
All that said, I applaud the idea of a study, as the president has asked. I want policy-making to be evidence based, not gut based.