The recent discussion surrounding the frequency of earnings reports has gained significant attention, particularly following the White House’s proposal to shift from quarterly to semi-annual disclosures. This suggestion has prompted many investors to consider the implications: does reducing the frequency of reporting provide more benefits than it incurs?
Utilizing extensive data compiled by Robert Shiller, we can explore the dynamics of this debate. The analysis covers the period from the introduction of mandatory quarterly reporting in 1970 through to 2025, examining how variations in quarterly earnings influence both short-term trading and long-term investment strategies.
The Value of Earnings Reports
President Trump’s administration recently indicated that moving to semi-annual earnings reporting would alleviate financial and temporal burdens on companies. While this may hold some truth, it raises a critical question: would investors sacrifice essential information necessary for informed decision-making?
To investigate this, we analyze the relationship between changes in three-month earnings and six-month earnings, alongside the overall trend. This trend is defined by a 61-month centered moving average of earnings changes, serving as a proxy for long-term growth. Specifically, we aim to determine whether insights from quarterly earnings can enhance an investor’s understanding of these longer-term trends.
Data Analysis and Insights
In the forthcoming analysis, we utilize data from Shiller’s online resources, focusing on the period from January 1970 to June 2025. The visual representation of this data outlines three-month earnings in green, six-month earnings in red, and trend earnings in blue, beginning from January 2000 for clarity.
When comparing these earnings metrics, it becomes evident that three-month earnings exhibit greater volatility than their six-month counterparts. However, an initial examination does not definitively indicate whether the additional data from quarterly earnings would significantly assist long-term investors in forecasting trends. Nevertheless, our findings suggest that even minor enhancements in this area could prove beneficial.
For short-term investors, the scenario is clearer. Awareness of three-month earnings changes can provide a distinct advantage in predicting future earnings shifts, a claim supported by our empirical analysis.
Long-Term vs. Short-Term Investor Perspectives
In considering long-term investors who prioritize trends, we can assess the value of incorporating quarterly earnings into their analyses. A logical approach to measure this value involves modeling the changes in trend earnings based on both three-month and six-month earnings data. By employing ordinary least squares estimation, we can evaluate the accuracy of these models.
At any given time, investors are aware of approximately half of the current trend in earnings, specifically the earnings from the first 30 months of the ongoing 61-month window. They can also access either the last three months or the last six months of earnings data, or both.
Model Comparisons and Findings
To determine whether quarterly earnings information enhances the predictive capabilities of long-term investors, we constructed two models. The first model (Model 1) predicts changes in trend earnings based solely on six-month earnings and previous trend changes. The second model (Model 2) incorporates the additional variable of three-month earnings changes.
Utilizing extensive data compiled by Robert Shiller, we can explore the dynamics of this debate. The analysis covers the period from the introduction of mandatory quarterly reporting in 1970 through to 2025, examining how variations in quarterly earnings influence both short-term trading and long-term investment strategies.0
Utilizing extensive data compiled by Robert Shiller, we can explore the dynamics of this debate. The analysis covers the period from the introduction of mandatory quarterly reporting in 1970 through to 2025, examining how variations in quarterly earnings influence both short-term trading and long-term investment strategies.1
Conclusion: Weighing the Costs and Benefits
Utilizing extensive data compiled by Robert Shiller, we can explore the dynamics of this debate. The analysis covers the period from the introduction of mandatory quarterly reporting in 1970 through to 2025, examining how variations in quarterly earnings influence both short-term trading and long-term investment strategies.2
Utilizing extensive data compiled by Robert Shiller, we can explore the dynamics of this debate. The analysis covers the period from the introduction of mandatory quarterly reporting in 1970 through to 2025, examining how variations in quarterly earnings influence both short-term trading and long-term investment strategies.3