Taking the long approach

Not enough has been made about the SEC's requirement for publicly traded companies to make mandatory quarterly filings. While the investor protection aspect of shorter-time periodic financial disclosures and transparency are laudable, the rule has, over time, led to a dearth of long term growth strategies in favor of short-term positive numbers. This has been exacerbated by Wall's Street's fixation with quarterly results and their resulting impact on share prices. In business school, you are taught that share prices are a reflection of a company's future earnings potential. This sensible approach to share pricing however, is at best distorted, or at worst ignored by the hullabaloo surrounding a company's short-term performance as packaged in the quarterly filings. Every quarter, CEO's trot out in front of analysts to present numbers that are increasingly gaining significance to the detriment of long term company viability. It is therefore tempting for corporations and strategy analysts to fall into the quarterly mind-set of measuring performance through a narrow prism of winning individual league games as opposed to clinching the championship game. Taking the analogy of the NFL, a team can go 16-0 during the regular season but if it does not win the Super Bowl then all that was for nought. Corporations therefore and strategy teams in particular ought to be able to have a wide view lens of the long term goal even while ensuring that short term Street expectations are met. Maximizing share holder value mandates hitting long term strategy goals even, dare I say, at the expense of periodic dips in value.