Changing the Conversation From Short-Term to Long-Term Value
In his article “The False Prophet of Long Term Investing” James Mackintosh makes a nuanced argument about long-term investing versus short-term trading. While he agrees that short-termism can lead to the wrong incentives for corporate management, a state of affairs he acknowledges large investors are working to correct, Mr. Mackintosh warns against blaming short-termism for meager capital spending.
At CECP: The CEO Force for Good, which works with more than 200 of the world’s leading companies, we see communication as the answer to this conundrum. Research from Harvard Business School, McKinsey/FCLT, and MIT, and results from Warren Buffet and others show a smart long-term focus—which lays out key strategies, speaks to relevant stakeholders, and addresses material risk factors–is the basis of sustainable profit. Most large companies have thoughtful long-term strategic plans, but with reporting organized solely around quarterly earnings, investors hear very little about them.
Read the complete blog post at cecp.me/2x56mTX