What Jeff Bezos said about great quarters

Dear Reader, With almost 90% of the S&P 500 already reporting their 3rd quarter results, earnings season is wrapping up. Looking at the numbers, about 80% of those already reported show earnings that were better than expected by analysts. When a company reports better earnings than expected, they are often lauded and congratulated by analysts and investors alike. Former Amazon CEO, Jeff Bezos, has a different take about planning for a great quarter. He gave the following remarks during a fireside chat a few years ago, but I think they are still just as relevant today. "When somebody… congratulates Amazon on a good quarter… I say thank you. But what I'm thinking to myself is… those quarterly results were actually pretty much fully baked about three years ago… Today, I'm working on a quarter that is going to happen in 2020, not next quarter. Next quarter, for all practical purposes, is done already and it has probably been done for a couple of years." Company's that report quarterly earnings can frequently find themselves getting caught in a vicious cycle of "short-termism." What I mean by that is frequently companies will make poor decisions in an attempt to meet short-term goals. Often, this is done at the expense of successfully executing longer-term goals. Jeff Bezos went on to describe at that same fireside about Amazon's focus. He stated that Amazon's goal was to Focus on the customer, offer a great customer experience, and the customer will do right by you by patronizing your business. An obsession with focusing on the customer is quite different from prioritizing three-month earnings targets. Don't get me wrong, setting short-term goals and milestones can be very effective. Additionally, quarterly reporting can be a helpful tool for investors and regulators alike. However, it is essential to identify and invest in companies with a sustainable, long-term plan. It's interesting to think about how many companies with great ideas failed because their leadership couldn't plan or execute past the next three months. Good investing,

Andrew Graham Editor, Silver Ridge Market Report P.S. I wanted to pass along a presentation that came across recently. It is well worth the watch if you are interested in learning more about the NFT space.

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