Harnessing Empirical Finance in Long-Term Investing Strategies with Dimensional’s Savina Rizova
Excess Returns
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How Do You Estimate the Internal Intangibles for a Company?
So to see whether we are missing a lot by not having the internally developed intangibles in book equity you have to estimate. And uh really in our research used like a well-developed meta-linear um in in use in academic and industry papers on that which is to accumulate over time companies are in this spending, plus the portion of its LGNAs selling general administrative spending. So for Disney up until bed point your estimate is zero. Uh and then Sears 2018 was filing for bankruptcy's book equity was negative market cap was close to zero. Our internal estimate was over 10 billion dollars of intangibles at that point in time.
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