The Lex column today highlights a troubling trend - the compression of company results into an ever shorter timeframe. This is just daft.


Clearly, it is in the interest of an orderly market that both sell-side and buy-side analysts have sufficient time to digest company results. Pity my good friend Chris Bailey who tweeted this yesterday:


Presumably many institutional investors will hold some combination of Alphabet, Amazon, Apple and Facebook, but if it's one analyst, they may not even be able to listen to the whole call live. And it's hard enough trying to analyse one set of company results in detail in a day, without having to do several. More so when we have had such an unusual quarter.

My solution to the problem when I was a practitioner was that I would focus my energies on the important holdings. This was easy enough when we had concentrated portfolios. For important positions, I would always try to attend the sell-side analyst meeting in London if there was one, as it gave me an opportunity to read the mood of the room, and to ask the Finance Director any urgent questions before going back to the office and spending most of the rest of the day checking my forecasts in the light of the new information and preparing a written summary.

But this level of detailed attention becomes impossible if multiple positions are reporting on the same day. Part of the reason for the truncation of the results season is a decision by the UK authorities a few years ago to impose a time limit on publication of results - no longer can you publish your June results in September when everyone is back from holidays.Β And of course this means that as an analyst, you likely cannot take holidays in July until the results season is over.Β 

The authorities should really do something about this. A computer has no problem analysing the data in seconds, but people need time to digest results and the current situation helps nobody, except those companies seeking to obfuscate. A longer period to report and a central timetable which allocates slots so that investors can cope would help market transparency. With accounting and reporting becoming ever more complicated, making analysts' lives easier would improve transparency.





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