Another plausible thing to believe…is that someone who holds a stock for a minute, or a quarter anyway, might pay more attention to this sort of stuff [longer-term company prospects] than someone who holds it for 10 years. It is hard to pay attention to anything for 10 years, plus a buy-and-hold investor might well be an index fund, or a casual retail investor, who doesn’t care at all about the underlying fundamentals of the company. The short-term shareholders have a clear incentive to demand long-term improvements: They’re going to sell their shares, so they want the price of the shares to go up, and the way to get a share price up is to discount in future growth.
If you combine those — debatable! — ideas then you might conclude that medium-term active shareholders are more likely to hold managers to account and demand long-term productivity improvements than are long-term shareholders who never sell. On the other hand, the managers might prefer the long-term shareholders, since managers — according to another fairly standard piece of financial-economics theory — love not being held accountable by shareholders.
That is from Matt Levine at Bloomberg, much more at the link.