Excess Returns The One Factor That Explains the Struggles of Value, International and Small-Cap Stocks | Kai Wu
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Jan 2, 2025 Dive into the world of intangible value investing with expert insights on the underappreciated assets driving modern companies. Discover how traditional metrics overlook key elements of value and why U.S. firms consistently outshine their international counterparts. Learn about the four pillars of intangible value and the role of AI in reshaping investment analysis. Uncover surprising trends in global patent leadership and strategies for navigating and capitalizing on investment opportunities in both domestic and international markets.
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Value Investing's Struggle
- Value investing's struggles aren't due to its demise, but rather how value is measured.
- Ignoring intangible assets leads to underweighting innovative companies, crucial in today's market.
Capitalizing Intangibles
- While theoretically sound, capitalizing intangibles like R&D doesn't fully solve the value measurement problem.
- The unpredictable relationship between intangible investment and output necessitates focusing on the output's value, not just cost.
Measuring Intangibles
- Use alternative data and NLP to quantify intangible assets. Explore patent abstracts, LinkedIn, Glassdoor, and other non-spreadsheet information.