Kenneth Corbin at Barron's wrote about the SEC's proposal to let public companies report earnings twice a year instead of four times, and why some advisers, myself included, are not on board.
Most investors do not realize how much their adviser relies on quarterly earnings reports. Right now, public companies file every 90 days. That is four checkpoints a year when we learn what is really happening inside a company: revenue trends, margin pressure, guidance changes, management surprises. Earnings calls are when management has to explain what went wrong, not just what went right, and they force that transparency on a schedule.
Cut the cadence in half and the data gaps get long enough to matter. Problems get more time to grow before anyone outside the boardroom knows about them. For someone in retirement drawing income from a portfolio, a six-month blind spot is not abstract. It changes what we can see before we are forced to react, and it changes how we evaluate whether a holding still belongs in a plan built around a specific spending need, timeline and tax situation.
The argument for the change is that quarterly reporting encourages short-term thinking in the boardroom. Maybe. But less reporting does not reduce what happens inside a company. It just reduces how quickly the rest of us find out. For advisers whose job is to see problems early, that is a cost, not a reform.
Read the full article at Barron's →
