InvGrowth · Profitability · Belo and Lin (2012)

Inventory Growth

Long minus short quintile portfolio, value-weighted, market-adjusted. Quarterly, 1952Q3 to 2024Q4.

Expected return · posterior mean, % per quarter

Next quarter

0.55%

95% interval −0.35% to 1.48%

Next year

0.63%

95% interval −0.25% to 1.49%

Next five years

0.85%

95% interval −0.01% to 1.61%

Next quarter

0.98%

95% interval 0.51% to 1.54%

Next year

1.03%

95% interval 0.51% to 1.61%

Next five years

1.18%

95% interval 0.49% to 1.83%

Next quarter

1.38%

95% interval 0.58% to 2.19%

Next year

1.37%

95% interval 0.52% to 2.22%

Next five years

1.34%

95% interval 0.32% to 2.30%

Next quarter

1.34%

95% interval 0.72% to 2.06%

Next year

1.39%

95% interval 0.71% to 2.12%

Next five years

1.53%

95% interval 0.65% to 2.34%

Cumulative market-adjusted return

+1,888% since 1952Q3 · log scale

Window	Mean	Vol.	Sharpe	t
1952Q3–2024Q4	4.72%	10.80%	0.44	3.72
2020Q1–2024Q4	0.96%	17.07%	0.06	0.13
2024Q1–2024Q4	−5.71%	6.98%	−0.82	−0.82
1952Q3–2024Q4	6.99%	7.45%	0.94	7.99
2020Q1–2024Q4	7.90%	9.22%	0.86	1.92
2024Q1–2024Q4	0.25%	4.65%	0.05	0.05
1952Q3–2024Q4	6.13%	15.15%	0.40	3.45
2020Q1–2024Q4	9.10%	20.32%	0.45	1.00
2024Q1–2024Q4	−1.67%	10.12%	−0.16	−0.16
1952Q3–2024Q4	8.71%	9.76%	0.89	7.60
2020Q1–2024Q4	8.77%	12.04%	0.73	1.63
2024Q1–2024Q4	−0.52%	9.75%	−0.05	−0.05

Horizon	Mean	95% interval	P(neg)
Next quarter	0.103	−0.066 – 0.274	0.13
Next year	0.117	−0.047 – 0.276	0.09
Next five years	0.158	−0.002 – 0.298	0.03
Next quarter	0.266	0.140 – 0.417	0.00
Next year	0.279	0.138 – 0.434	0.00
Next five years	0.316	0.130 – 0.490	0.00
Next quarter	0.182	0.076 – 0.290	0.00
Next year	0.181	0.068 – 0.294	0.00
Next five years	0.177	0.043 – 0.304	0.01
Next quarter	0.278	0.151 – 0.423	0.00
Next year	0.287	0.147 – 0.434	0.00
Next five years	0.313	0.132 – 0.477	0.00