A study in 2020 found the economic costs of short-termism: 5.8% of market capitalization.

· Bits and Bobs 5/11/26
  • A study in 2020 found the economic costs of short-termism: 5.8% of market capitalization.
    • The headwind was not due to compliance cost, but from cultural corruption that came from optimizing for quarterly returns.
    • The quarterly reporting sets the horizon of how long-term teams can easily think in an organization.
    • The SEC is currently considering a proposal to allow companies to opt-in to reporting only every 6 months.
    • It was the Long Term Stock Exchange that lobbied hard for this regulatory change.