Elliott's Singer agrees with Buffett, Dimon on profit guidance

Buffett Dimon make plea to halt quarterly guidance so management can think long-term

In the latest appeal, they said companies often hesitate to spend on technology, hiring, and research and development to meet quarterly earnings forecasts that can be affected by seasonal factors beyond their control.

After several controversial statements about bitcoin, the chief executive of JPMorgan Chase Jamie Dimon again tells people to "beware" when trading in the cryptocurrency.

Dimon, who also leads the Business Roundtable group, and Buffett co-wrote an article about why they think quarterly profit forecasts are hurting the economy.

J.P. Morgan chief executive Jamie Dimon on Thursday denied that he plans on running for president.

In their op-ed piece, Buffett and Dimon argue that "effective long-term strategy drives economic growth and job creation" and that quarterly EPS guidance "often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability".

"I have seen managements. get tempted by the predictions that they've made", Buffett said.

More news: GOP leader McConnell cancels most of Senate's August recess

Dimon has blasted excessive reporting requirements and the short-term focus of quarterly earnings.

Buffett, who is chairman of Berkshire Hathaway Inc (BRKa.N), and Dimon wrote in a Wall Street Journal column on Thursday that the pressure to meet short-term estimates has contributed to a fall in the number of USA public companies.

Dimon, Buffett and BlackRock Inc.'s Laurence D. Fink urged companies in 2016 to refrain from short-term earnings forecasts in a letter and report with other financial industry executives. The analysts take the company guidance into consideration when making investment recommendations and setting price targets for stocks.

"When companies get where they're sort of living by so-called making the numbers, they do a lot of things that really are counter to the long-term interests of the business", he said.

The practice of forecasting has come under severe criticism in recent times with investors pressurising firms to deliver to their promises, said CNBC.

Quarterly earnings guidance works like this.

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