Janet Stringer argues that "the DCF valuation method has increased managers' focus on short-term rather than long-term performance, since the discounting process places much heavier weight on short-term cash flows than long-term ones.". Comment

Answer 1

While it is true that DCF valuation places more weight on earlier cash flows than on later ones, this reflects the time value of money. A dollar in one year is more valuable than a dollar in five years' time. However, this does not imply that the long-term is less important than the short-term. Typical DCF valuations show that the value of cash flows beyond, say, five years is a substantial fraction of the overall firm value. If managers believe that long-term performance of the firm is the most significant driver of value, they will certainly focus appropriately on making sure that they do not underemphasize the long-term.
DCF valuation helps a manager understand the tradeoffs between short-term and long-term actions. Consider management's decision if it has a choice between two mutually exclusive investments that generate equivalent cash flows, one with a short horizon and the other with a long horizon. DCF analysis implies that firm value will increase more if the management takes the short-term project. In this sense, DCF helps managers trade off how much they should focus on short-term versus long-term considerations.
One concern often raised about DCF analysis is that it focuses attention on quantifiable costs and benefits from investing. It is probably more difficult to quantify long-term costs and benefits than short-term ones. If management ignores these types of costs and benefits, they may end up making decisions that have a short-term focus. However, this is really not the fault of DCF as a method. It is simply an indication of the difficulty in making decisions with highly uncertain payoffs.