I don’t often disagree with Warren Buffet, but his position on companies providing guidance was one example. In a previous post, I argued that the more information companies give investors, the more accurately they will price stocks, on average. Perhaps there will be instances where investors might over- or under-react to certain information releases, particularly if it is vaguer information like guidance. But that possibility should not make executives the paternalistic managers of investor sentiment.
The problem is a good deal worse if companies decide to withhold value relevant historical information as Apple has now decided to do regarding the number of units it sells. Withholding that information clearly makes it more difficult for investors to value Apple accurately. Remember that the fundamental social role of the stock market is to move funds from savers to investors. That task requires accurate pricing so that funds are allocated to the companies with the best opportunities. If companies withhold information and pricing becomes noisier, the capital allocation process is impeded, and everyone loses.