Research has shown that value investing needs to change. Our economy has transitioned from one dominated by tangible assets like buildings and equipment to one dominated by intangible assets such as brands and intellectual property. Although many researchers have looked at the issue of how to value intangible assets, far fewer are looking at how to translate that into an actual investment strategy.
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.
We hope you enjoy the discussion.