HH What We Can Learn From Jamie Dimon And Warren Buffett

The second villager just sat by the well and collected her coins. And the first villager? Well, you can probably guess - he was put completely out of business and had to find other ways to make a living.

The moral of the story is pretty obvious. It is easy to make decisions that, while they may deliver attractive results in the short-term, are BAD decisions for the long-term health of a business. As investors, we should always take this into account. We want to invest in companies and management teams that focus on the big picture, EVEN IF that means it affects short-term revenues and profitability.

Conclusion

Buffett and Dimon's recommendation to cease with quarterly earnings guidance is one we can get on-board with. The management of public companies to hit 3-month profit targets can be counter-productive, starving a firm of necessary investments to build growth and competitive advantages over the long term. It is also a lesson to investors to focus their investments on companies and management teams that make decisions for the long-term health of the business.

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Disclosure: Steve owns no stocks referenced here.

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