EarningsConsistency · Earnings growth · Alwathainani (2009)

Earnings consistency

Long minus short quintile portfolio, value-weighted, market-adjusted. Quarterly, 1953Q3 to 2024Q4.

Expected return · posterior mean, % per quarter

Next quarter

0.96%

95% interval 0.11% to 2.02%

Next year

0.93%

95% interval 0.11% to 1.89%

Next five years

0.83%

95% interval 0.06% to 1.64%

Next quarter

1.16%

95% interval 0.53% to 1.81%

Next year

1.10%

95% interval 0.53% to 1.70%

Next five years

0.91%

95% interval 0.40% to 1.45%

Next quarter

0.37%

95% interval −0.51% to 1.25%

Next year

0.37%

95% interval −0.54% to 1.27%

Next five years

0.38%

95% interval −0.62% to 1.35%

Next quarter

1.59%

95% interval 0.53% to 2.64%

Next year

1.47%

95% interval 0.54% to 2.41%

Next five years

1.11%

95% interval 0.41% to 1.88%

Cumulative market-adjusted return

+539% since 1953Q3 · log scale

Window	Mean	Vol.	Sharpe	t
1953Q3–2024Q4	3.46%	13.15%	0.26	2.23
2020Q1–2024Q4	3.73%	22.83%	0.16	0.37
2024Q1–2024Q4	34.29%	24.85%	1.38	1.38
1953Q3–2024Q4	3.78%	7.78%	0.49	4.11
2020Q1–2024Q4	5.04%	8.64%	0.58	1.30
2024Q1–2024Q4	10.89%	5.11%	2.13	2.13
1953Q3–2024Q4	1.68%	16.04%	0.10	0.89
2020Q1–2024Q4	−0.87%	27.34%	−0.03	−0.07
2024Q1–2024Q4	−1.43%	22.53%	−0.06	−0.06
1953Q3–2024Q4	4.25%	10.37%	0.41	3.47
2020Q1–2024Q4	12.35%	10.69%	1.16	2.58
2024Q1–2024Q4	14.61%	3.70%	3.95	3.95

Horizon	Mean	95% interval	P(neg)
Next quarter	0.146	0.016 – 0.309	0.01
Next year	0.141	0.016 – 0.288	0.01
Next five years	0.127	0.009 – 0.250	0.02
Next quarter	0.300	0.136 – 0.474	0.00
Next year	0.283	0.135 – 0.441	0.00
Next five years	0.234	0.102 – 0.374	0.00
Next quarter	0.046	−0.063 – 0.156	0.20
Next year	0.046	−0.067 – 0.158	0.21
Next five years	0.047	−0.078 – 0.168	0.22
Next quarter	0.308	0.102 – 0.518	0.00
Next year	0.284	0.104 – 0.469	0.00
Next five years	0.213	0.079 – 0.363	0.00