MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Comcast: A second opinion

C. HUYGENS - Friday, October 03, 2014
Comcast has twice been voted the worst company in America, and is turning to a marketing executive to fix things. This intrigues Jonathan Salem Baskin at Consensiv, who wonders whether those voting are taking actions that have any economic consequences -- the real measure of reputational value.

The poor showing at the ballot box is partly due to the company’s well-publicized challenges with customer service. It is also partly due to the nature of the ballot box. The voting was sponsored by Consumerist, a not-for-profit subsidiary of Consumer Reports.

Contrast the browbeating of the Consumerist's opinion polls with objective measures of Comcast’s reputational value that take in the opinions of all stakeholders, as reflected in their expected economic activity. When it comes to reputation, the behaviors that count from a financial perspective are clearly more favorable. Comcast ranks in the 86th percentile among the 23 companies in its peer group, at at around 77% of its algorithmically-determined potential. Comcast may not the best, most reputationally valuable company (Priceline Group is this month), but certainly Comcast is not the worst company in America.  Read more.

Reputation Statistics and Anecdotes

C. HUYGENS - Thursday, October 02, 2014
For professionals struggling to get their arms around the business case for reputation risk management, this posting from the Risk Management Monitor today provides the most recent statistics on the prevalence of reputation risk concerns at senior corporate levels, and timely comments on specific sources of reputation risk at Goldman Sachs, Lloyd's Banking Group, Tesco, and General Motors.

Read more.

Consensiv 50 October 2014

C. HUYGENS - Wednesday, October 01, 2014
The Consensiv 50 is an unweighted ranking of indicated reputational value drawn from the world's 1000 most valuable traded companies. The underlying reputational value metrics, calculated weekly for more than 7000 companies, are the underpinnings of Steel City Re’s reputational value insurances and the S&P Dow Jones RepuStars Variety Corporate Reputation Index (Ticker: REPUVAR), the world’s only reputation-linked composite equity index*. Read more about Consensiv's reputation insights and controls.


Apple: Bruised reputation

C. HUYGENS - Tuesday, September 30, 2014
Headlining the Forbes article in February of this year "Apple Acting More Like Microsoft Than Facebook and Google," Steve Schaefer openly wonders if the law of large numbers is working against the once star iconoclast. Recent technology stumbles suggest the problem may be more closely related to organizational mass and control rather than financial variables, and no where is the loss potential more clearly evident than in the evolution of Apple's reputation. Notwithstanding a high reputation premium and low value risk, at 0.92 and 0.10 percentiles, respectively, Apple no longer commands the highest premium nor the lowest risk among its 73 peers.

Home Depot: Data breach v. dog bites man

C. HUYGENS - Monday, September 29, 2014
In early September, Home Depot, the home improvement chain confirmed that its payment systems had been hacked. The full extent of the breach appears to be around 60 million records. It is the largest retail breach on record eclipsing Target's 40 million records last year, and naturally, litigators and regulators have started their investigations.

Something however is amiss. You look at the way reputation value metrics responded to the Home Depot data breach and you'd have to say they reek of complacency. There's hardly a blip. It seems that a data breach no longer has the ability to shock stakeholders, who by the look of things, no longer expect credit card information to remain secure. Thus, in a rather short span, it appears that cyber security risk has been downgraded from a reliable trigger of reputational value losses to a mere source of embarrassment, consternation, and operational loss. Dog bites man, yawn.

RepuStars 2014 Sept 26

C. HUYGENS - Saturday, September 27, 2014

Weekly Reputation Index Metrics


At the close of trading September 26, 2014, REPUVART and REPUVAR stood at 3665.05 and 3029.58 respectively. Over the past four weeks, the former has changed by -4.88%, while the latter has changed by -4.97%. The benchmark S&P500 Composite Index stood at 1727.10 (31 Dec 2001=1000) and has changed over the past four weeks by -1.02%. The current calendar year spread between REPUVAR and the S&P500 is -8.00%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 0.90% and -0.57% respectively; the S&P500 Composite Index has changed by 16.73%. The trailing 12-month spread between REPUVAR and the S&P500 is -17.30%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 49.34% and 41.43% respectively; the S&P 500 Composite Index has changed by 68.70%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are -3.14%, 3.50%, and 110.43% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -13.23%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 3.15% and 4.08%.

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.

Background

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). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names 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 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

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 organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on 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 flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

Scotland's Reputation: Just watch what they do.

C. HUYGENS - Wednesday, September 24, 2014
Andrew Carnegie, one of Scotland's better known American transplants, famously said, "As I grow older, I pay less attention to what men say, I just watch what they do." So while the opinion polls suggested a close plebiscite, the Scots' vote favored the union by 10%. Scotland's reputation as one of four upstanding united kingdoms was preserved.

Not necessarily so. As Consensiv's Jonathan Salem Baskin points out, the electorate has voted. Now watch what other stakeholders do -- evidenced by the value of foreign direct investment, tax impact of immigration, business start up and expansion rates, risk premium on sovereign debt; and by what concessions the local Scottish government needs to make to optimize the above.

Read more.

NFL: Reputation sacked again

C. HUYGENS - Tuesday, September 23, 2014
In the entertainment business Disney knows so well, managing reputation is a business imperative. The NFL has been sacked three times in as many years for reputation losses. Blame the Internet, if you will.

Warnings dating back to 2009 predicted that “hyper-transparency” enabled by the Internet would change the boundaries used to assess a company’s scope of control, and its degree of accountability and responsibility. Since then, stakeholder pass rushes have sacked the NFL thrice: for poor quality and greed, poor safety and greed, and now poor ethics and...greed?

Read more.

RepuStars 2014 Sept 19

C. HUYGENS - Saturday, September 20, 2014

Weekly Reputation Index Metrics


At the close of trading September 19, 2014, REPUVART and REPUVAR stood at 3735.00 and 3088.11 respectively. Over the past four weeks, the former has changed by -2.01%, while the latter has changed by -2.10%. The benchmark S&P500 Composite Index stood at 1751.10 (31 Dec 2001=1000) and has changed over the past four weeks by 1.11%. The current calendar year spread between REPUVAR and the S&P500 is -7.57%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 2.01% and 0.04% respectively; the S&P500 Composite Index has changed by 16.72%. The trailing 12-month spread between REPUVAR and the S&P500 is -16.68%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 47.86% and 40.01% respectively; the S&P 500 Composite Index has changed by 67.24%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are -0.81%, 5.01%, and 101.38% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -11.71%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 3.38% and 4.97%.

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.

Background

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). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names 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 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

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 organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on 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 flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

RepuStars 2014 Sept 12

C. HUYGENS - Saturday, September 13, 2014

Weekly Reputation Index Metrics


At the close of trading September 12, 2014, REPUVART and REPUVAR stood at 3796.48 and 3138.95 respectively. Over the past four weeks, the former has changed by 0.57%, while the latter has changed by 0.44%. The benchmark S&P500 Composite Index stood at 1729.44 (31 Dec 2001=1000) and has changed over the past four weeks by 1.56%. The current calendar year spread between REPUVAR and the S&P500 is -4.53%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 5.52% and 3.49% respectively; the S&P500 Composite Index has changed by 17.95%. The trailing 12-month spread between REPUVAR and the S&P500 is -14.46%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 51.83% and 43.77% respectively; the S&P 500 Composite Index has changed by 69.29%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 1.06%, 7.02%, and 108.64% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -10.93%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 2.44% and 3.53%.

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.

Background

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). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names 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 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

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 organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on 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 flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

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