The coalition, led by the non-profit Aspen Institute, contends that hedge funds are using earnings guidance as a way to turn a quick profit. Earnings projections were originally intended to give long-term investors a snapshot of the company's health, and not as a tool for short-term buying or selling, according to the coalition. The initiative - called "The Aspen Principles" - has been supported by the AFL-CIO, the largest union federation, and companies like PepsiCo Inc. and Pfizer Inc.
Companies have been accused of being so caught up in quarterly numbers, that they neglect the long term. And, those that miss their guided earnings are often punished by Wall Street - with investors, especially hedge funds, making money on the share prices' swings.
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Amen. When â€œlong-term thinkingâ€ means the end of the quarter rather than the end of the quarter century more important things than investments suffer â€“ things like the public health suffer.