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US SEC preparing to scrap quarterly reporting requirement

reuters.com

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Re: US SEC preparing to scrap quarterly reporting requirement

#421

Post by Esophagus4 »

kshacker wrote: post #18

This is an awesome move. They’re not saying the reports go away—just moving them to every six months. After hating how each company runs on an internal quarterly cycle, I have to welcome it despite how the change originated. Six months is still short from the perspective of perverse incentives, but if you free up one week of charade from execs every 13 weeks, maybe they can focus better. And it’s not just execs, but…

Absolutely. Quarterly reporting is enormously expensive.

The average Nasdaq firm spend 850 hours per quarter purely on earnings. It’s absurdly burdensome.

It is part of the reason companies don’t want to go public (it’s not the only reason, obviously). But the harder you make it for companies to go public, the more will stay in private markets.

Then the only companies going public are going to be the ones that aren’t hot enough to stay private. Then retail will lose out on a lot of good growth companies.

And you could say, “well let retail invest in private companies” but that makes the information asymmetry problem even worse. Because now instead of investing in companies with biannual reporting, retail is investing in companies with no reporting at all. I guess you could say “well make private companies have to report more” and now you’ve just created a public market again.

https://www.businessinsider.com/quarterly-earnings-proposal-...

Re: US SEC preparing to scrap quarterly reporting requirement

#422

Post by Esophagus4 »

davorak wrote: post #273
jandrewrogers wrote: post #225

Earlier quoted context omitted.

Do you understand that as a legal matter these must be good faith representations of the current state to the best of your knowledge? You can’t serve up intentionally stale information without inviting legal repercussions. The preparation process takes weeks. This is a very serious legal matter. These are being revised and updated right up until the point they are released to provide the most accurate reporting possi…

> You can’t serve up intentionally stale information without inviting legal repercussions. > These are being revised and updated right up until the point they are released to provide the most accurate reporting possible. > You gravely underestimate the legal seriousness of these reports. All of these seem look like an argument for additional automation.

It is not a technology problem.

Re: US SEC preparing to scrap quarterly reporting requirement

#423

Post by mmooss »

SilverElfin wrote: post #261
mmooss wrote: post #186

Earlier quoted context omitted.

> it’s also how America has generally operated in the past It's not. That's why we have the rules that they are recinding, and why the US has long had among the the most transparent, safest, and liquid markets in the world. Saying that 'it's always been this way' is a really concerted effort to bury one's head in the sand.

I was talking about the broader way things work, not necessarily for the SEC specifically - although they’re also subject to this phenomenon. Lobbying in America, and the revolving door between industry and government agencies, is a core part of American politics and economics. Long before the Trump administration.

Again, it was not always this way. It's like saying drownings happened before the tidal wave, so it's always been this way.

People will put up any defense against facing and acting on the reality of their situation.

Re: US SEC preparing to scrap quarterly reporting requirement

#424

Post by Esophagus4 »

tormeh wrote: post #333

Isn't the solution to a rare task being painful to make the task frequent? What if we required daily/weekly fiscal reporting? Would that even be feasible? I guess it would force complete automation, which might make it much more difficult to change things and reduce company agility. Would be fun to hear the opinion of someone actually involved with the process.

Tricky part is it’s not actually a technology problem. Generating the numbers is already automated.

It’s “pay [external] auditors and legal to review to make sure all of this won’t get us thrown in jail”

If those processes are automated because the law, accounting, and audit professions innovate, then I would suspect you’d

Re: US SEC preparing to scrap quarterly reporting requirement

#425

Post by Esophagus4 »

sneak wrote: post #276
JumpCrisscross wrote: post #151

Earlier quoted context omitted.

> don’t see how less granularity in financials is a good thing Transaction costs. Preparing this transparency costs money and attention.

Having to do it more and more frequently means more and more of it gets automated.

It is not a technology problem.

The data generation is mostly automated.

Re: US SEC preparing to scrap quarterly reporting requirement

#426

Post by notepad0x90 »

blitzar wrote: post #345
ralph84 wrote: post #29

If you want to discourage short-term thinking, make the vesting period longer on executive stock grants. Making companies' performance less transparent just opens up more opportunities for insider trading.

> If you want to discourage short-term thinking, make the vesting period longer on executive stock Give them no stock, pay them 100k a year and if they fuck up fire them rather than saying they left to "spend more time with their family" - kinda like the rest of the working joes out there. Pay me 100mil this year and I might as well spend the rest of my time on the job gambling with shareholders money or trying to sh…

You get paid for what it costs to keep you in the seat and valuable. They get paid $100M because they're making decisions affecting >$1B.

The exec's bosses are the board, the people who represent the stock holders, so the exec's compensation is a direct reflection of the incentive the board is giving them. Stock options ensure they look out for that ticker. If the board didn't want short term gains they can always change their mind on the structure of exec compensations.

Re: US SEC preparing to scrap quarterly reporting requirement

#427

Post by BJones12 »

blitzar wrote: post #345
ralph84 wrote: post #29

If you want to discourage short-term thinking, make the vesting period longer on executive stock grants. Making companies' performance less transparent just opens up more opportunities for insider trading.

> If you want to discourage short-term thinking, make the vesting period longer on executive stock Give them no stock, pay them 100k a year and if they fuck up fire them rather than saying they left to "spend more time with their family" - kinda like the rest of the working joes out there. Pay me 100mil this year and I might as well spend the rest of my time on the job gambling with shareholders money or trying to sh…

> Give them no stock, pay them 100k a year

That used to be the case, though more like millions a year. Clinton ended it.

Re: US SEC preparing to scrap quarterly reporting requirement

#428

Post by svnt »

kortilla wrote: post #417
svnt wrote: post #238

Earlier quoted context omitted.

No, they stop hunt their way to depressed prices where they then buy anticipating the recovery while you closed out your “safe” retirement positions at -15%.

You don’t put stop losses on retirement positions. That’s an incredibly dumb thing to do for long term investors. It’s literally a “sell low” policy.

You use a trailing stop loss. You get closed out 15% down from the top, not 15% down from purchase. The alternative in a 24 hour market is worse — the news of a real event hits and by the time you wake up and respond you’re down 50% or more and the stock isn’t coming back.

This policy change is to hunt profit from a safety mechanism used by retail traders.

It is something that should yield a lot of profit for 24 hour trading systems during a downturn.

Re: US SEC preparing to scrap quarterly reporting requirement

#429

Post by cjrp »

bushbaba wrote: post #408
giancarlostoro wrote: post #383

Earlier quoted context omitted.

> if companies reported dollars in and dollars out live to shareholders at least we would have an idea of how the company is doing in a general sense. A former manager used to run his own company, it was a satellite internet company sometime in the 2000s, they were going into the negative, so they had a big TV in the office, showing everyday what was coming in, and how much they made vs how much they owed. They did i…

Can motivate the employees to jump ship. Often time as an employee you are impacted dis proportionately on the downside than the upside.

Yep, I've worked at two startups which started to really emphasise The Numbers in weekly all-hands meetings, and how we're all in it together to improve them, etc. Both of those jobs ended in redundancy.

Re: US SEC preparing to scrap quarterly reporting requirement

#430

Post by SilasX »

bizzletk wrote: post #158
mcoliver wrote: post #120

Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365. How they square increasing liquidity with delaying information is insane. I know there is a lot of manipulation to make quarterly numbers and the tax code is…

Can you enumerate some examples of when it having less information is better than having more?

Well, that's a whole area of active research, referred to as "info hazards":

https://www.lesswrong.com/w/information-hazards

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