Our guest this week has done exactly that.
We speak to Sparkline Capital founder Kai Wu about how he looks at intangible assets and the machine learning based methods he uses to value them. We also get into the nuts and bolts of constructing an intangible focused value strategy and discuss issues such as selecting an investment universe, determining the number of stocks to hold, position sizing, industry concentration and a lot more.
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1:55 The importance of intangibles
7:27 The four pillars of intangible assets
9:30 Measuring the value of a brand
12:46 How far back can we measure intangibles
13:15 Measuring human capital
17:19 Kai explains network effects
22:14 Taking intangibles and turning them into value ratios
24:48 Building a real world investment strategy with intangibles
33:09 Rebalancing the portfolio
36:32 Where does the strategy fit in an investor's portfolio
47:09 What Kai has learned from running his own ETF
50:17 Closing Question: If you could teach one lesson to your average investor, what would that be?
ABOUT THE PODCAST
Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.
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