I've been anti quarterly reporting for a long, long time due to its drive to short-term thinking. I remember Alphabet (then still called Google) trying argue that they should report annually. Companies that rely on deep scientific research such as TSMC and ASML clearly need to look to the long future. AI investment doesn't quite match that, with a portion being spent on true research, while much of the data centre build out is "buying Digial Lettuce" as the wonderful David McWilliams said recently. The mentality that science and engineering R&D is somehow dirty and a purely a cost has dominated financial thinking far too long - another toxic legacy of the Reagan/Thatcher era.
I agree not all the spending is true research. For me, the long term point goes beyond what is spent on R&D. Its about how these companies view the world. They may be wrong but each has a clear long term picture that they are pursuing.
I wonder if the quesrtion comes down to the backgound of the people on the board. Are they fixated with stockprice as a (bad) measure of "shareholder value"? Those that fly above that and see that value is that long-term vision and product focus will always be more successful long term, even if they have to change focus at some point.
Maybe - using “board” in the UK sense, in the US the founder/ CEO usually rules - the wider Board has little influence. Having said that some of these companies have matured to a point where that is shifting.
I've been anti quarterly reporting for a long, long time due to its drive to short-term thinking. I remember Alphabet (then still called Google) trying argue that they should report annually. Companies that rely on deep scientific research such as TSMC and ASML clearly need to look to the long future. AI investment doesn't quite match that, with a portion being spent on true research, while much of the data centre build out is "buying Digial Lettuce" as the wonderful David McWilliams said recently. The mentality that science and engineering R&D is somehow dirty and a purely a cost has dominated financial thinking far too long - another toxic legacy of the Reagan/Thatcher era.
I agree not all the spending is true research. For me, the long term point goes beyond what is spent on R&D. Its about how these companies view the world. They may be wrong but each has a clear long term picture that they are pursuing.
I wonder if the quesrtion comes down to the backgound of the people on the board. Are they fixated with stockprice as a (bad) measure of "shareholder value"? Those that fly above that and see that value is that long-term vision and product focus will always be more successful long term, even if they have to change focus at some point.
Maybe - using “board” in the UK sense, in the US the founder/ CEO usually rules - the wider Board has little influence. Having said that some of these companies have matured to a point where that is shifting.