C. HUYGENS - Saturday, June 08, 2013
Weekly Reputation Index Metrics
At the close of trading June 7, 2013, REPUVART and REPUVAR stood at 3368.04 and 2852.09 respectively. Over the past four weeks, the former has changed by -2.19%, while the latter has changed by -2.38%. The benchmark S&P500 Composite Index stood at 1431.42 (31 Dec 2001=1000) and has changed over the past four weeks by 0.59%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 25.23% and 22.69% respectively; the S&P500 Composite Index has changed by 23.97%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 72.97% and 64.82% respectively; the S&P 500 Composite Index has changed by 54.74%.
Other interval changes in the magnitude of the indices are
It’s June 2013, and the world’s equity markets are gaming the central bankers at an unprecedented level. The issue is quantitative easing and the cost of capital. Most anyone betting on economic fundamentals is losing. Earlier, it was sovereign debt. Over the past month, the junk bond market capitulated. Ed Marrinan, head of macro credit strategy at RBS, explained to the Financial Times
why high-yield bond fans had all deserted the sector at once. “When the market lacks clarity, when it lacks consensus, that is when you end up with volatility and that takes its toll on risk assets.” True, but when there is pressure to perform, the safest risk assets are those that are indexed. And so the major market indices are rocketing on the basis of demand for their securities rather than confidence in the underlying drivers of value. That’s a bubble.
In bubbles, the RepuStars algorithm has successfully found the “best opportunities in the bubble” based on implicit arbitrage linked to the reputational metrics. RepuSpx, a portfolio that seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It is ahead of the market index for the calendar year by 7.64% this week at 18.82% ROI for the year. Its trailing twelve-month returns of 33.93% are beating the market by 8.96%.
RepuStars, plagued by a few companies that have greatly disappointed stakeholders, increased its spread loss. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME) which holds on to first place with returns of 48.19%, Wellpoint Inc (WLP) which holds onto second place with returns of 30.53%, and Genpact Ltd (G), which moves up to third place qith year to date returns of 22.22%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.
As for those whose reputational value has not panned out so far, scandal-plagued VeriFone Systems Inc. (PAY) plunges further to a loss of -44.57%, Fusion I-O, now sans its founders, is down at -36.52% Royal Gold Inc. (RGLD) is down -32.32%.
Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here
The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). The RepuStars Variety Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.
for real time quotes.
The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).
The RepuStars indices are reconstituted annually in the first week
of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 20 Jan 2012.
Reputation, Risk and Finance
Reputation management through superior control of a company's
intangible assets may be one of the best paths to value creation
today. If it is not on your agenda, perhaps it should be. Here are
several things you can do right now to start creating value for your
1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings
the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)
or its predecessor, Mission: Intangible. Managing risk
and reputation to create enterprise value (2010)
, available at
the IAFS Store
, specialty finance sector retailers
or other leading online book retailers
2. Become a member
of the Intangible Asset Finance
Society and engage.
3. Join our community on Linked-In
and stay in the information
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