The End of Earnings Guidance?

Motley Fool Hidden Gems Investing

The Motley Fool

Investing, Business

4.3 • 3.1K Ratings

🗓️ 8 June 2018

⏱️ 41 minutes

🔗️ Recording | iTunes | RSS

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Summary

Warren Buffett and Jamie Dimon make the case for ending earnings guidance. Howard Schultz steps down from Starbucks. Twitter joins the S&P 500. Five Below soars above expectations. And Smucker tries to get out of a jam. Ron Gross, Jason Moser, and Matt Argersinger analyze those stories and share a few stocks on their radar. Plus, entrepreneur, best-selling author, and Facebook Live creator Randi Zuckerberg talks Facebook, work-life balance, and investing. Thanks to LinkedIn for supporting The Motley Fool. Go to https://www.linkedin.com/fool and get a $50 credit toward your first job post. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Thanks to LinkedIn for supporting this episode of Motley Fool Money, the best place to find great talent for your hiring needs is LinkedIn.
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0:52.5	From Fool Global Headquarters, this is Motley Fool Money.
0:56.5	It's the Motley Fool Money Radio Show. I'm Chris Helm, joining me in studio this week's senior analyst, Jason Moser, Matt Argusinger, and Ron Gross.
1:03.5	Good to see you as always, gentlemen. Hey, hey, hey, hey, we've got the latest headlines from Wall Street.
1:07.5	Randy Zuckerberg is going to help with work, life, balance, and as always, we'll give you an inside look at the stocks on our radar.
1:13.5	But we begin with a polite suggestion from the Oracle of Omaha.
1:18.5	This week Warren Buffett and JP Morgan CEO, Jamie Diamond, co-authored a letter in the Wall Street Journal calling for an end to earnings per share guidance.
1:28.5	Under the headline, short-termism is harming the economy. Buffett and Diamond, they couldn't have been more clear about this, Ron.
1:37.5	They basically said, look, just stop with the earnings guidance.
1:40.5	And specifically, the quarterly earnings guidance, which I think I'm okay with.
1:45.5	I think the unintended consequence, however, could be increased volatility in the stock because analysts are going to continue.
1:51.5	I think to put out this estimates, and they're going to be more wrong than normal.
1:58.5	And that's going to be the divergence between actual and estimates will increase, and therefore the volatility will increase as well.
2:05.5	So I would keep an eye on that.
	...

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