Jacob breaks down what intangible assets are - from intellectual property and proprietary algorithms to brand value and customer relationships - and explains how these harder-to-measure assets are changing traditional investment approaches. He discusses Bridgeway's pioneering research on "intangible intensity" and how it affects their investment strategy, particularly for high vs. low intangible companies.
Key topics covered:
How intangible assets complicate traditional valuation metrics
Why sentiment analysis matters more for high-intangible companies
The implications of AI for intangible asset valuation
Bridgeway's approach to long-short investing
International investing opportunities and market efficiency
The importance of understanding model assumptions and staying humble as an investor
Whether you're interested in quantitative investing, understanding modern valuation frameworks, or keeping up with evolving market dynamics, this conversation offers valuable insights into how one of the industry's leading firms approaches these challenges.
00:00:00 Introduction and podcast overview
00:03:17 What are intangible assets? Basic definitions
00:06:04 Origins of intangible intensity research
00:14:06 Price to book as a risk factor rather than alpha factor
00:16:25 Different approaches for high vs low intangible companies
00:20:36 Impact of AI on intangible assets valuation
00:27:52 Overview of absolute return strategy approach
00:32:01 Examples of when systematic models need human oversight (meme stocks, M&A)
00:42:16 U.S. vs International markets perspective
00:47:25 Discussion of unique datasets like short availability data
00:51:12 Career insights and firm culture at Bridgeway
00:53:22 Final advice: The importance of staying humble as an investor
00:54:20 Closing remarks and contact information
#investing #quantitative #finance #valueinvesting #intangibleassets
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