Weekly Reputation Index Metrics

The RepuStars® Variety Corporate Reputation Index calculated by Dow Jones Indexes launched into widespread distribution on November 1, 2011. Previously calculated by Steel City Re and available only on the Mission Intangible blog of the Society, it is the first-ever composite equity index measuring the impact of corporate reputation on share price. The RepuStars Variety Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.

Click here for real time quotes.

At the close of trading 25 Nov 2011, REPUVART and REPUVAR stood at 2353.51 and 2050.11 respectively. Over the past four weeks, the former has decreased by 12.14%, while the latter has decreased by 12.28%. The benchmark S&P500 Composite Index stood at 1009.22 (31 Dec 2001=1000) and has decreased over the past four weeks by 9.84%. Over the trailing twelve months, REPUVART and REPUVAR have, respectively, lost 2.24% and 3.64% respectively; the S&P500 Composite Index has lost 2.58%. Since January 2009, the REPUVART and REPUVAR have gained 88.08% and 78.51% respectively; the S&P 500 Composite Index has gained 24.35%. Other interval changes in the magnitude of the indices are shown below.



The RepuStars Variety Corporate Reputation Index is the first index based on a quantitative model for analysts, investors, and company managers to determine the actual impact of reputation on corporate equity prices. The companies selected for the RepuStars Variety Index are chosen algorithmically to capture the disparity between value at which a company is currently trading and its value as calculated by Steel City Re’s reputational metrics.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to their metrics as measured by Steel City Re’s proprietary Corporate Reputation Index™, which tracks 5500 companies weekly. In using the RepuStars Index as an investment strategy, investors can take advantage of this price disparity. The principles behind Steel City Re's reputation metrics are discussed in the book, Mission:Intangible (see below).

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the index.

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 first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, 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.

Notices

STEEL CITY RE and REPUSTARS are registered trademarks of C. Huygens & Co. LLC and are used under license. 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. The RepuStars Variety Corporate Reputation Indexes are calculated by Dow Jones Indexes, the marketing name and the licensed trademark of CME Index Services, LLC. (CME Indexes). Dow Jones Indexes is a service mark of Dow Jones Trademark Holdings LLC. (Dow Jones). Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of investing in such product(s).

It's Black Friday season. It is a jolly good time, to borrow from seasonal expressions, to return to one of our most viewed reputational competitions, WMT vs TGT (or for those who do not live and die by ticker symbols, Walmart vs. Target). At our last review in February 2011, things were not looking particularly good for either firm. Both were losing reputation and value - Target was dropping faster and its metrics were more volatile. Between the two, our money was on Walmart.

At that time, Walmart’s (NYSE:WMT) reputation had dropped over the trailing twelve months from the 88th to the 81st percentile according to its Steel City Re Corporate Reputation Index ranking. Economically, the company was underperforming the median of this peer group by 26.53%. Target (NYSE:TGT), as a point of comparison, had diminished in terms of reputational standing having dropped over the trailing twelve months from the 93rd the 76th percentile. Economically, the company was underperforming the median of this customer peer group by 21.4%.

One year later, Walmart is looking much better. Walmart’s reputation has climbed over the trailing twelve months from the 85th to the 90th percentile among the 137 companies in the Retail sector. Its trailing 26 week exponentially weighted moving average reputation volatility is 1.7% while its 12 week reputation velocity and reputation vectors were both 0% . These are indicators of a slightly accelerated rise in reputation value. Economically, the company is now outperforming the median of this peer group by 12.62%.

Target (NYSE:TGT), as a point of comparison, has improved marginally in terms of reputational standing having increased over the trailing twelve months from the 88th to the 89th percentile. Its trailing 26 week exponentially weighted moving average reputation volatility was 6.9% while it s 12 week reputation velocity and and reputation vectors were 2% and 3.9%. These are indicators of a much slower reputation transition. Economically, the company was outperforming the median of this customer peer group by .84%.

The relative change in intangible asset fraction in the two companies says it all. Walmart's intangible asset fraction is now greater than the median; and Target's isn't.

Weekly Reputation Index Metrics

The RepuStars® Variety Corporate Reputation Index calculated by Dow Jones Indexes launched November 1, 2011. Previously calculated by Steel City Re, it is the first-ever composite equity index measuring the impact of corporate reputation on share price. The RepuStars Variety Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.

Click here for real time quotes.

At the close of trading 18 Nov 2011, REPUVART and REPUVAR stood at 2498.35 and 2176.28 respectively. Over the past four weeks, the former has decreased by 0.80%, while the latter has decreased by 0.98%. The benchmark S&P500 Composite Index stood at 1058.85 (31 Dec 2001=1000) and has decreased over the past four weeks by 1.83%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, gained 3.30% and 1.83% respectively; the S&P500 Composite Index has gained 1.33%. Since January 2009, the REPUVART and REPUVAR have gained 99.66% and 89.49% respectively; the S&P 500 Composite Index has gained 30.46%. Other interval changes in the magnitude of the indices are shown below.



The RepuStars Variety Corporate Reputation Index is the first index based on a quantitative model for analysts, investors, and company managers to determine the actual impact of reputation on corporate equity prices. The companies selected for the RepuStars Variety Index are chosen algorithmically to capture the disparity between value at which a company is currently trading and its value as calculated by Steel City Re’s reputational metrics.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to their metrics as measured by Steel City Re’s proprietary Corporate Reputation Index™, which tracks 5500 companies weekly. In using the RepuStars Index as an investment strategy, investors can take advantage of this price disparity. The principles behind Steel City Re's reputation metrics are discussed in the book, Mission:Intangible (see below).

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the index.

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 first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, 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.

Notices

STEEL CITY RE and REPUSTARS are registered trademarks of C. Huygens & Co. LLC and are used under license. 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. The RepuStars Variety Corporate Reputation Indexes are calculated by Dow Jones Indexes, the marketing name and the licensed trademark of CME Index Services, LLC. (CME Indexes). Dow Jones Indexes is a service mark of Dow Jones Trademark Holdings LLC. (Dow Jones). Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of investing in such product(s).

On 14 November, Warren Buffett said his Berkshire Hathaway Inc had accumulated a 5.5 percent stake in IBM since March, the billionaire investor's biggest bet in the technology field he has historically shunned.

The Christian Science Monitor (November 14, Berkowitz) noted that "the move puts Buffett's money squarely in the heart of the technology industry, a sector he has steadfastly avoided on the grounds he simply did not understand it." The Wall Street Journal's Marketwatch (November 14, Hinton) observed that "In building up his $10.7 billion stake in International Business Machines Corp., billionaire Warren Buffett apparently turned a blind eye to one of the most basic rules of investing: Buy low. "

Leave it to the Hollywood Reporter (November 14, O'Connell ) to get to the heart of the matter: Buffet is buying reputation. "'I don't think there's any company that I can think of... that's done a better job of laying out where they're going to go and then having gone there,' Buffet told the Reporter. 'They have laid out a road map and I should have paid more attention to it five years ago where they were going to go in five years ending in 2010. Now they've laid out another road map for 2015.'"

IBM's reputation is at the top of the charts. The Steel City Re Corporate Reputation Index places IBM at the 100th percentile among the 145 companies in the Information Technology Services sector as of 17 November 2011 - exactly where it was 12 months ago. It's exponentially weighted reputational volatility is 0.1%, its trailing twelve week velocity is 1%, and its vector is .1%. Those are the metrics of a highly stable reputation. Meanwhile return on equity has outpaced the median of this sector by 42%.

In the current environment when fear dominates equity markets, there is much to be said for a stellar reputation. Even it it means buying dearly a company whose intangible asset fraction is much greater than the median of the peer group - but then again, what does reputation rest on if not the intangibles?

Weekly Reputation Index Metrics

The RepuStars® Variety Corporate Reputation Index calculated by Dow Jones Indexes launched November 1, 2011. Previously calculated by Steel City Re, it is the first-ever composite equity index measuring the impact of corporate reputation on share price. The RepuStars Variety Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.

Click here for real time quotes.

At the close of trading 11 Nov 2011, REPUVART and REPUVAR stood at 2615.96 and 2279.91 respectively. Over the past four weeks, the former has increased by 4.02%, while the latter has increased by 3.89%. The benchmark S&P500 Composite Index stood at 1100.84 (31 Dec 2001=1000) and has increased over the past four weeks by 3.21%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, gained 6.68% and 5.17% respectively; the S&P500 Composite Index has gained 4.15%. Since January 2009, the REPUVART and REPUVAR have gained 109.06% and 98.52% respectively; the S&P 500 Composite Index has gained 35.64%. Other interval changes in the magnitude of the indexes are shown below.



The RepuStars Variety Corporate Reputation Index is the first index based on a quantitative model for analysts, investors, and company managers to determine the actual impact of reputation on corporate equity prices. The companies selected for the RepuStars Variety Index are chosen algorithmically to capture the disparity between value at which a company is currently trading and its value as calculated by Steel City Re’s reputational metrics. The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to their metrics.

Steel City Re’s proprietary Corporate Reputation Index™ generates reputational metrics on 5500 companies weekly. The principles behind Steel City Re's reputation algorithms and metrics are discussed in the book, Mission:Intangible (see below).

The RepuStars Index is reconstituted annually in the first week of January. The index was last reconstituted 6 Jan 2011.  Click here for historical values for the index as well as additional information on the index methodology.

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 first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, 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.

Notices

STEEL CITY RE and REPUSTARS are registered trademarks of C. Huygens & Co. LLC and are used under license. Investment products based on the RepuStars Variety Corporate Reputation Index 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.

The RepuStars Variety Corporate Reputation Indexes are calculated by Dow Jones Indexes, the marketing name and the licensed trademark of CME Index Services, LLC. (CME Indexes). Dow Jones Indexes is a service mark of Dow Jones Trademark Holdings LLC. (Dow Jones). Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of investing in such product(s).

The Financial Times (November 11, Bullock) focused on it right away: "'Higher education is first and foremost a business that is driven by reputation,' said John Nelson, head of higher education research at Moody’s. 'Student demand, the attraction of faculty and the ability to draw donations are all based on reputation.' Moody’s said it will evaluate 'the potential scope of the reputational and financial risk' arising from the allegations, including potential lawsuits and settlements, weaker student demand or philanthropic support, changes in the university’s relationship with the state and significant management or governance changes."

The Washington Post's (November 12, AP Wire) headline was blunt: "Moody’s warns Penn State’s bond rating could be downgraded because of sex abuse scandal."

Reputation is an epiphenomenon. It is a product of how an entity executes one or more of six core functions: ethics, quality, innovation, safety, sustainability, and security. Three of these have been called into question by the Penn State University sexual abuse scandal. The Pennsylvania attorney-general has filed criminal charges involving child sexual abuse against Jerry Sandusky, a former assistant football coach, as well as perjury and failure to report charges against two senior university officials, including the chief financial officer.

In our current culture, the path to reputation restoration includes rolling heads. Swift retribution is demanded, and and innocent blood may be part of the cost to save the many. The reign of terror had its merits, but it was not necessarily the best path towards a just and democratic system. We can only hope that the lessons taken from this latest reputational crisis are that better preventative processes are preferable to the guillotine.

Meanwhile, in Happy Valley Pennsylvania, a normalcy is already returning.

Weekly Reputation Index Metrics

The RepuStars Variety Corporate Reputation Index calculated by Dow Jones Indexes went live 1 November 2011. While real time data can be viewed at a number of financial websites such as Google Finance (click here), historic data have not yet been loaded. Until they are loaded and interval data can be presented according to the new values, the older form of the index calculated by Steel City Re is being presented in parallel.

At the close of trading 3 Nov 2011, the RepuStars® Variety and Repustars Prime Composite Indices stood at 249.78 and 210.31 respectively. Over the past four weeks, the former Index has increased by 10.49%, while the latter has increased by 9.51%. The benchmark S&P500 Composite Index stood at 112.33 (5 April 2002=100) and has increased over the past four weeks by 8.26%.

Over the trailing twelve months, the RepuStars Variety and Prime Composite Indices have, respectively, gained 7.78% and 3.10% respectively; the S&P500 Composite Index has gained 3.28%. Since January 2009, the RepuStars Variety and RepuStars Prime Composite Indices have gained 97.06% and 89.16% respectively; the S&P 500 Composite Index has gained 35.35%. Other interval changes in the magnitude of the indices are shown below.


The RepuStars® family of composite indices represent a strategy of reputation arbitrage and reflect the added value of reputation resilience. The RepuStars® Prime Composite Index comprises no more than one firm in each of 20 major sectors with the greatest potential for reputation-linked equity appreciation sampled from the large-cap segment of the U.S. equities market. The RepuStars Variety Composite Index comprises no more than 3 firms in each of 19 major commercial sectors. The benchmark metric is the S&P 500® Composite Index.

The RepuStars indices are reconstituted annually in the first week of January. The Indices were last reconstituted 6 Jan 2011.  Click here for additional information on the indices.

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 first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, available at the IAFS Store 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. 

REPUSTARS is a registered trademark used under license.

Governance experts claim that reputation should be managed like any other asset underpinng enterprise value. Beginning today, Tuesday, November 1, 2011, they can point to a new reputation linked composite equity index as further evidence. The RepuStars® Variety Corporate Reputation Index, calculated by Dow Jones Indexes, is a quantitative strategy index reflecting the performance of up to 57 company stocks, selected algorithmically for reputation - driven value on the authority of Steel City Re Corporate Reputation Index metrics.

In late 2008, as Lehman Brothers was collapsing, then-Federal Reserve Chairman Alan Greenspan observed that, “In a market system based on trust, reputation has a significant economic value.” The RepuStars Variety index concurs. The RepuStars Variety price index increased 119.8% and the RepuStars Variety total return index increased 151.9% from December 31, 2001 through October 21, 2011. Over the same period the S&P500® Composite Equity Index and the Dow Jones Industrial Average increased 7.9% and 17.8% respectively.

As followers of this blog know, before being added to the real time Dow Jones ITC 2.1 data feed of the CME Market Data Platform, RepuStars Variety was calculated by Steel City Re and published weekly on the Mission Intangible blog of the Intangible Asset Finance Society.

Click to see the RepuStars Variety price index; or to see the RepuStars Variety total return index on Google Finance. Visit Steel City Re for more information.