Short-Term Noise Is Fading. Long-Term Thinking Is Returning.

In 2018, Warren Buffett, CEO of Berkshire Hathaway, and Jamie Dimon, CEO of JPMorgan Chase, made a simple but powerful argument.

Quarterly earnings guidance was distorting corporate behavior.

They did not argue against transparency. They supported clear reporting and honest communication. 

What they challenged was the obsession with hitting short-term targets that often have little to do with long-term value creation.

They saw something many investors missed. When management teams are judged every 90 days, they begin to act every 90 days. 

Investments get delayed, hiring slows, and research budgets shrink as companies focus on meeting short-term expectations. Decisions that should be made over the years are instead compressed into quarterly timelines that weaken long-term value creation.

That is not how great businesses are built. It is how potential gets limited.

Buffett and Dimon understood that America’s strength has always come from long-term thinking. 

Railroads were not built in quarters. The interstate highway system was not built in quarters. The most successful companies in the world did not become dominant by optimizing for the next earnings call.

They invested with patience, endured through cycles, and compounded their gains over time as the true drivers of long-term wealth creation took hold.

Now, nearly a decade later, that idea is moving from opinion into policy.

I wrote about this shift when I shared with you why moving to twice-a-year earnings could unlock real prosperity.

The U.S. Securities and Exchange Commission is preparing a proposal that could reshape how public companies report their results. The plan would make quarterly reporting optional and allow companies to report twice a year instead.

This is not a small adjustment.

Public companies in the United States have followed quarterly reporting for more than 50 years. 

Changing that structure signals a meaningful shift in how regulators view the balance between transparency and long-term growth.

The proposal is still in development. It will go through a public comment period. It will face debate, and some investors will push back because they rely on frequent updates and real-time data to guide their decisions. 

That concern is valid, since transparency matters and markets function best when information flows freely and consistently.

But there is an important distinction that is finally being recognized.

There is a difference between useful information and excessive pressure.

Quarterly reporting has gradually evolved from a tool of accountability into a driver of short-term behavior. 

Companies do not simply report results. They manage toward expectations. They smooth earnings. They delay expenses. They accelerate revenue when possible.

Over time, that changes how capital is allocated.

Instead of investing for the highest long-term return, companies often invest for the cleanest short-term outcome. That tradeoff is costly.

Fewer companies choose to go public. The number of listed firms in the United States has declined significantly over the past two decades. 

In 1990, there were about 5,800 public companies listed in the United States, and today that number is closer to 3,600, a decline of nearly 40% that reflects a fundamental shift in how companies approach public markets. 

That shift limits opportunities for everyday investors to participate in long-term wealth creation.

Public markets have historically been one of the greatest engines of wealth creation in the world. They allow millions of Americans to participate in the growth of businesses through retirement accounts and long-term savings.

When fewer companies enter those markets, that opportunity narrows. This is why the current shift matters. Reducing the emphasis on quarterly reporting does not eliminate discipline. It refocuses it.

Companies will still report results. Investors will still evaluate performance. Accountability will remain. What changes is the time horizon.

Management teams gain the flexibility to invest in projects that may take years to pay off. They can build infrastructure, develop new products, and expand into new markets without the constant pressure to explain every short-term fluctuation.

That is how durable value is created.

At American Prosperity, this aligns directly with how we think about investing.

We do not measure success in quarters. We measure it in years.

We focus on businesses with strong leadership, clear competitive advantages, and the ability to reinvest capital at high rates of return. 

These are not companies built for short-term optics. They are built for long-term compounding.

When the market becomes overly focused on near-term results, it often misprices those businesses. That creates an opportunity for disciplined investors.

This shift in policy reinforces that approach.

It signals that the system itself is beginning to recognize what long-term investors have understood all along.

Value is not created in 90-day increments.

It is built over time through consistent execution, intelligent capital allocation, and leadership that is willing to look beyond the next headline.

The United States remains the most dynamic economic system in the world. Its strength comes from innovation, entrepreneurship, and the ability to allocate capital efficiently.

Policies that encourage long-term thinking strengthen that foundation.

They make it more attractive for companies to go public. They expand opportunities for investors. They support the kind of investment that leads to real economic growth.

Buffett and Dimon saw the problem early, and now the system is beginning to respond. This is a step in the right direction.

And for investors focused on long-term wealth creation, it is a reminder of something simple and powerful. The greatest opportunities rarely come from reacting to the moment.

They come from owning the future.

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Regards,

Charles Mizrahi
Prosperity Insider