MISSION INTANGIBLE

M:I Products

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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Commander in Chief Reputation Impairment

C. HUYGENS - Thursday, September 07, 2017
Reputation drives  both hope and fear. That is why reputational value impairment can manifest as either dashed hopes or fearlessness.

Microsoft's Smith says in the beginning of 2017, business leaders looked around and wondered how they would navigate this new unpredictable environment. They feared being attacked by the commander in chief on social media. Now, Smith says, "I don't think people get up in the morning worrying about tweets. We have much bigger problems to worry about than that."

Read more in NPR.

Plaintiffs Pursue Asymmetric Strategies Targeting Reputation

C. HUYGENS - Wednesday, September 06, 2017
Reputation is an existential asset in financial services; plaintiffs have asymmetrically leveraged reputation risk against money managers.

“Large, and in most cases, household name money managers face a unique reputation risk when their 401(k) plans are sued for offering their own investments, says Brian Netter, co-chair of the ERISA litigation practice at Mayer Brown.”

Read more in Benefits Pro.

Regulators Leverage Fund Managers to Up Pressure On Boards

C. HUYGENS - Tuesday, September 05, 2017
Increasing pressure from regulators and politicians worldwide to.

“…hold companies to account on excessive executive pay, a lack of gender diversity and inaction on climate change. ”

Read more in Financial Times.

Repustars 2017 September 1

C. HUYGENS - Saturday, September 02, 2017

Weekly Reputation Index Metrics


At the close of trading September 1, 2017, REPUSPX, REPUVART, and REPUVAR stood at 5564.65, 4423.81 and 3493.45 respectively. Over the past four weeks, the three have changed by -0.82%, 1.29%, and 1.06%. The benchmark S&P500 Composite Index stood at 2157.12 (31 Dec 2001=1000) and has changed over the past four weeks by -0.01%. The current calendar year spread between REPUVAR and the S&P500 is 2.84%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 16.46% and 14.95% respectively; the S&P500 Composite Index has changed by 14.08%. The trailing 12-month spread between REPUVAR and the S&P500 is 0.87%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 14.58% and 9.36% respectively; the S&P 500 Composite Index has changed by 23.69%.

The trailing 12-month, and trailing 36-month returns for REPUSPX are 19.57%, and 23.69% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is 5.49%.

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 -0.13% and -4.62%.

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).
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 at the close of the markets 23 January 2017.

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. Click here for an analysis of periodic returns.

The design of the portfolio is governed by principles of behavioral economics, market signaling, and the implicit timing arbitrage between the behaviors of equity stakeholder and all other stakeholders.

Reputation, Risk and Finance

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.

Challenge of a Different Color

C. HUYGENS - Tuesday, August 29, 2017
Products like D&O insurance protect from from legal liability but they hold no sway in the court of public opinion.

“CEOs now need to avail themselves of new tools that defend against these new types of threats – products that provide third party warranties and demonstrate good governance in a way that creates an easy to understand, and completely credible alternative narrative when bad or false news strikes. Companies and their executives need credibility to deter attacks and financial protection when attacks do occur.”

Read more in Industry Today.

Financial Risk Body Armor Needed

C. HUYGENS - Sunday, August 27, 2017
Repeated blows to reputation will eventually cause the financial equivalent of dementia. For qualified companies and their leadership, reputation risk solutions can be life saving.

Read more in Risk & Insurance.

Repustars 2017 August 26

C. HUYGENS - Saturday, August 26, 2017

Weekly Reputation Index Metrics


At the close of trading August 25, 2017, REPUSPX, REPUVART, and REPUVAR stood at 5476.72, 4296.85 and 3394.90 respectively. Over the past four weeks, the three have changed by -2.52%, -3.01%, and -3.18%. The benchmark S&P500 Composite Index stood at 2127.94 (31 Dec 2001=1000) and has changed over the past four weeks by -1.18%. The current calendar year spread between REPUVAR and the S&P500 is 1.16%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 13.39% and 11.90% respectively; the S&P500 Composite Index has changed by 12.45%. The trailing 12-month spread between REPUVAR and the S&P500 is -0.55%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 11.92% and 6.86% respectively; the S&P 500 Composite Index has changed by 22.15%.

The trailing 12-month, and trailing 36-month returns for REPUSPX are 17.25%, and 22.15% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is 4.79%.

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 -1.51% and -5.35%.

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).
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 at the close of the markets 23 January 2017.

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. Click here for an analysis of periodic returns.

The design of the portfolio is governed by principles of behavioral economics, market signaling, and the implicit timing arbitrage between the behaviors of equity stakeholder and all other stakeholders.

Reputation, Risk and Finance

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.

No Country for Old (Insurance) Captives

C. HUYGENS - Friday, August 25, 2017
Attention captives bearing reputation risk, review programs…implement immediate changes. Thus opined the court: Although

“…organized and regulated as an insurance company, paid the claims filed against it, and met the minimal capitalization requirements (but it)… was not operated like an insurance company, it issued policies with unclear and contradictory terms, and it charged wholly unreasonable premiums….(B)ased on the facts the court focused on, it will be vital for all captives to undergo a thorough review of their program, and to implement immediate changes”

Read more in Business Insurance.

Reputation Now Key at Consumer Level

C. HUYGENS - Thursday, August 24, 2017
Reputation risk is a material threat to value especially in financial services, automotive and healthcare.

"CorpSumers feel so strongly about brand reputation, that over half (51%) will continue buying a product that has disappointed them because they believe in the company or share its values."

Read more in Holmes Report.

Headline-Sourced Reputation Risk

C. HUYGENS - Wednesday, August 23, 2017
“We’re in the era of weaponized social media….Companies need to set clear expectations of what (behavior) is acceptable.”

“Companies need to communicate with stakeholders about the values embedded in their corporate culture and set clear expectations of what is acceptable and what is not. In the current political climate, companies should have been considering this question all along, not just waiting for (Charlottesville) to stimulate that discussion. ”

Read more in Business Insurance.

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