With a few clicks on his keyboard and one social media post to the world, President Donald Trump revived a long-term debate over the merits of his quarterly revenue report. This resolution could have a major impact on investors. The Securities and Exchange Commission is listening to the president. After Trump’s true social mission on Monday morning, the SEC argued that the quarterly profit requirement should be eliminated in favor of a six-month report, U.S. securities regulators said in a statement that “we are prioritizing this proposal to further eliminate unnecessary regulatory burdens on businesses.” Trump’s ideas are nothing new. In fact, the six-month reporting requirement was a European standard, and was also present in the United States between 1955 and 1970. The SEC then switched to today’s quarterly requirements. Discussions on revenue disclosure standards – and whether they will generate problematic short-term thinking came to the forefront during Trump’s first term at the White House in 2018. That June, perhaps the most well-known long-term investor in history, Warren Buffett, and JPMorgan’s influential CEO Jamie Dimon co-authored OP-ED in the Wall Street Journal, which denounced the practice of companies publishing quarterly revenue guidance. Then in August, Trump advocated that he would take it a step further and report it twice a year. Trump’s push didn’t earn that time. But now it’s back. Will that happen? In a note to clients on Tuesday, the Wolfe Research strategist warned that the odds exceeded 50%, but that it would not occur overnight based on the SEC standard protocol for Rules changes. “The process of implementing this change should extend to, if not further (late 2026), and could occur based on pushbacks in the notification and comment rulemaking process,” Wolfe Research writes. Another important question for investors: Is it beneficial to go back to a semi-annual reporting structure? Like most investments, it depends. Meanwhile, in support of the current situation, today’s quarterly report offers even greater transparency and communication with the leadership team’s management company. Not only do you get official numbers every three months and get backward discussions about what contributed to that performance, but you also get commentary from management for a month or two in the current quarter. And companies that don’t provide formal guidance will often still be able to gain high levels of executive expectations for the coming months. This is undoubtedly more beneficial for home gamers who may lack access to expensive research from Wall Street brokerages and may not have a direct line to investment-related teams. And there are no millions to allocate to alternative research methods beyond sales reports, such as paying conversations with seller experts or paying for satellite images. Certainly, large sums also benefit from official financial statement returns. This is because it helps in modeling efforts. However, these deep investors think like hedge funds and asset management companies – thanks to analyst channel checks, industry meetings, management discussions, and access to the resources mentioned above, they can gain a lot of information without quarterly submissions. Yes, home gamers have access to audio from many industry meetings and several analyst notes. However, it’s ridiculous to pretend that access to the public company management team is the same in both cohorts. In reality, positive reports on quarterly reports stem from transparency. When Jim Kramer preaches buying and home investment, the majority of this is paying close attention not only to when your own portfolio company reports, but also to the revenue season. Revenue from industry peers provides “read-throughs” that can provide insights. Therefore, current advocates believe that getting this opportunity four times a year is more optimal than the less frequent alternative. Meanwhile, in support of every six months, supporters see benefits in less frequent reports. First of all, they argue that preparing a quarterly report is expensive. Trump specifically mentioned in his true social post that he “saves money” by reporting every six months. Others believe that the current short-term focus of the market is preventing businesses from wanting to be traded publicly in the first place. “President Trump is aware that our public markets are sluggish whether it’s the UK (or the US) or not, and this may be one way to reclaim costs and reduce costs to public companies without hurting investors,” Treasury Secretary Scott Bescent told CNBC on Tuesday. More generally, investors should want a management team focused on the company’s multi-year health. It is investing in sustainable, long-term growth, even if it means dealing a minor blow to profits in the near term. This is a little more difficult if you need to report every three months and the market expects a specific outcome. Extending the reporting period to a six-month increment will allow management teams to effectively plan and execute more breathing rooms, which should theoretically lead to better results than the long term. Of course, the best management teams have already done this. But many people don’t have that luxury. For example, investors have come to understand that Amazon cannot care much about what the market thinks about spending habits from a quarter to a quarter. Amazon is able to escape it for the majority as investors are now convinced of how large it was, and the secular nature of its business. However, more circular companies do not have this luxury and are much more likely to become volatility if they do not succeed in market expectations. Retailers such as TJX companies and restaurant chains like Texas Roadhouse tend to focus investors on similar store sales this quarter as well as monthly cadence. The investor then tries to extrapolate what the next few months will look like based on that rhythm. Certainly, management can do their best to focus on the long term, but the reality is that investors expect to meet or exceed analyst expectations when reporting results. Additionally, if reports occur every three months, management teams should consider at least short-term expectations to keep shareholders happy. Otherwise, there will be extreme price fluctuations that allow shareholders to govern the company together and may prefer not to ride a roller coaster of emotions. By removing the quarterly standard in favor of the semi-annual standard, supporters believe investors will gain a more long-term focused management team. Whenever I posed in a scenario like this, remember what my Economics 101 Professor said in his freshman year at university. He argued that it is beneficial to think from an extreme point of view when discussing in any way the merits of progressive movement. In this case, one is to insist on monthly reports, and the other is to insist on annual reports. Would you like management to be concerned about reporting profits each month? Certainly, Costco reports monthly sales numbers, but this is not a complete financial collapse this month. Conversely, would it be better to get an official annual update? Faced with these two hypotheses, the way you tilt will likely depend on your approach to the market. Traders or professional money managers who have to constantly answer investors will likely lean towards more frequent reports. However, long-term investors may prefer infrequent reports on the belief that investing in a company essentially means you have hired its management team. The last thing you want to do when it comes to powerful operators is to “micromanage” them and make them worry about what they’ll tell you next month. Of course, the best solution is somewhere in the middle, and the management team will provide constant updates, but will refrain from providing quantifiable guidance. As mentioned earlier, Buffett directed a criticism of market short-termism regarding the guidance portion of the equation. “As an investor, I like to read Quarterly reports,” Buffett told CNBC in an August 2018 interview. He said, “I want to receive those quarterly reports. I don’t like guidance. I think guidance leads to a lot of bad things and I’ve seen it leads to a lot of bad things.” Where is the club standing? There are benefits to both. As Jim said Monday, if he is CEO, he would want to report too often. However, as an investor and market commentator, the current system offers many things that I like. We preach long-term investments at the club. That’s why we appreciate the policy that allows management to focus on the long term. On the other hand, we understand the importance of keeping management accountable, and generally view transparency as a good thing. If the SEC abolishes its quarterly reporting mission, it is not possible to predict exactly what will happen, but the scope of the results is possible. For example, some people argue that six-month revenue reports could put pressure on management to provide smaller, more frequent updates and keep investors up to date. After all, many European companies are publishing quarterly updates despite the fact that they are only legally required to file every six months. Similarly, the transition to semi-annual reporting could be “police” by shareholders through free market dynamics. Investors can simply sell the stock if this means that companies will no longer need to adopt this and provide regular updates. One reason executive compensation is so linked to stocks is the adjustment of incentives between managers and shareholders. For investors who have punished the metaplatform for aggressive spending a few years ago, the company ultimately accepted religion and CEO Mark Zuckerberg’s “year of efficiency,” which had a very positive impact on the stock price. It’s not exactly from apple to april, but the point is that market responses influenced management’s decisions. Not providing updates other than six months of filing means that each report has a very high interest. This is because investors will need to price six months’ worth of information at a time, not three months now. Those that offer regular updates without providing a full breakdown of their finances in accordance with GAAP accounting standards may be rewarded with a higher valuation, as investors are more confident in their estimates. At a high level, management works for shareholders, putting aside some founder-led companies where founders maintain a majority vote. Still, according to a Wolfe study, if a company in the sector is facing investor pressure, “other companies in the sector face pressure to stay quarterly.” Ultimately, we believe that the dynamics of the free market will lead to this change not as big a deal as it looks. The SEC may determine legal filing criteria. However, shareholders may direct disclosure practices. (Jim Cramer’s Charitable Trust serves the roles of TJX, AMZN, Meta, and TXRH. For a complete list of trust stocks, see here.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive a trade warning before Jim makes a deal. Jim waits 45 minutes after sending a trade alert before purchasing or selling stocks in the Charitable Trust portfolio. If Jim talks about stocks on CNBC TV, he will wait 72 hours after issuing a trade alert before running the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with the disclaimer. 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