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Expectational Model

Columbine Capital’s Expectational Model offers an objective measure of investor expectations for each company based on sell-side consensus earnings estimates. The Expectational Model’s rankings are updated daily. Clients may subscribe to either daily or weekly service.

This is a “building block” model; it is not intended to stand alone. The Expectational Model complements, but does not duplicate the characteristics of other forms of analysis; it is intended to be used as one element of a complete stock selection system.

Our design goal for this model is to maximize its ability to discriminate between attractive and un-attractive issues. This is measured as the difference in returns generated by a model’s top (1st) and bottom (10th) deciles over the long-term time horizons of interest to institutional investors. Expectational Model alpha forecasts are predictive out as far as three years in the future.

We developed the Expectational Model in late 1995 and early 1996 and began publishing Expectational Model rankings from live data in June of 1996.

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