Weekly Reputation Index Metrics

At the close of trading May 17, 2013, REPUVART and REPUVAR stood at 3486.44 and 2958.31 respectively. Over the past four weeks, the former has changed by 9.05%, while the latter has changed by 8.40%. The benchmark S&P500 Composite Index stood at 1452.40 (31 Dec 2001=1000) and has changed over the past four weeks by 7.22%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 34.98% and 32.30% respectively; the S&P500 Composite Index has changed by 28.74%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 69.81% and 61.83% respectively; the S&P 500 Composite Index has changed by 48.77%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

Real estate, the markets, and consumer sentiment is all up. Unemployment compensation applications are up, too, but that is not important. The froth is too much fun.

In a continuing demonstration of “errors in decision making” as termed by behavioral economists, rational expectations, which are central to assessments of reputational value, are taking a back seat to other competing drivers of stock price. RepuSpx, a portfolio that seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It is ahead of the market index for the calendar year by 8.69% this week, a leap from last week. Its trailing twelve-month returns of 36.35% are beating the market by 8.57%.

RepuStars, plagued by a few companies that have greatly disappointed stakeholders, is still containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now in its fifth week at the top ranking with a year-to-date return of 60.32%. Wellpoint Inc (WLP holds onto second place with returns of 31.24% and Lamar Advertising (LAMR) returns to third place with a year-to-date return of 21.71%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, Royal Gold Inc. (RGLD) leads the losers at -38.39%, Fusion I-O, now sans its founders, is down 32.99% and scandal-plagued VeriFone Systems Inc. (PAY) is down further at -27.21%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading May 10, 2013, REPUVART and REPUVAR stood at 3443.31 and 2921.71 respectively. Over the past four weeks, the former has changed by 5.16%, while the latter has changed by 4.54%. The benchmark S&P500 Composite Index stood at 1422.98 (31 Dec 2001=1000) and has changed over the past four weeks by 2.82%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 24.81% and 22.04% respectively; the S&P500 Composite Index has changed by 20.71%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 64.61% and 56.87% respectively; the S&P 500 Composite Index has changed by 41.35%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

Another week of froth makes for good headlines for both the S&P500 and the pocket RepuSPX indices. The numbers are good, but there is a nagging concern that equity numbers are being driven more by capitulation – there is no return in debt – than it is for corporate fundamentals absent global fiscal stimulatory policies. The widening gap with non-indexed equities, and the low yield of junk debt, formerly known as high yield debt, are both consistent with this interpretation.

In a demonstration of typical  “errors in decision making” as termed by behavioral economists, rational expectations, which are central to assessments of reputational value, are taking a back seat to other competing drivers of stock price. RepuSpx, a portfolio that seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It is ahead of the market index for the calendar year by 5.5% this week, a slip from last week. Its trailing twelve-month returns of 27.18% are beating the market by 6.87%.

RepuStars, plagued by a few companies that have greatly disappointed stakeholders, is still containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now in its fourth week at the top ranking with a year-to-date return of 54.76%. Wellpoint Inc (WLP holds onto second place with returns of 28.00% and Bed Bath and Beyond (BBBY) returns to third place with a year-to-date return of 22.72%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, there’s been another shakeup. Fusion-IO, whose CEO quit this week, returns to last place; commodities in general are represented by Royal Gold Inc. (RGLD) at -31.12%, and scandal-plagued VeriFone Systems Inc. (PAY) is up a bit at -25.20%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading May 3, 2013, REPUVART and REPUVAR stood at 3418.24 and 2903.56 respectively. Both of these value are all time highs. Over the past four weeks, the former has changed by 5.93%, while the latter has changed by 5.42%. The benchmark S&P500 Composite Index stood at 1406.19 (31 Dec 2001=1000) and has changed over the past four weeks by 3.94%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 23.93% and 21.30% respectively; the S&P500 Composite Index has changed by 17.92%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 61.76% and 54.30% respectively; the S&P 500 Composite Index has changed by 37.56%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

While both the broad market S&P/DJI-calculated RepuStars Variety Index (Ticker:REPUVAR) and the pocket RepuSPX are surging ahead, the overall market is, frankly, frothy. The Financial Times pointed out Friday, that job growth has been consistently positive but sluggish, the effects of sequestration are yet to be recognized in national accounts, and while participation in the labor force is overall positive, manufacturing – the employment option for the less skilled – is down.

“The jobs figures were better than expected, but if you like gloom, they still contain a case to be gloomy. The worst number in the report was a 0.4 per cent drop in private hours worked leading to a 0.2 per cent drop in private payrolls (hours worked x hourly incomes). Less payroll income = less money to spend = less demand = less job creation in the future. Another sign of fragility was the diffusion index, which measures how broadly job gains were spread across different industries, where 50 means that as many industries created jobs as cut them. That index fell from 61.7 in February, to 56.2 in March and now 53.9 in April – indicating that the spread of jobs growth is narrowing.”

In this setting, it is increasingly apparent that rational expectations, which are central to assessments of reputational value, are among a group of competing drivers of stock price. RepuSpx, a portfolio that seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It moved ahead of the market index for the calendar year by more than 6.3% this week. Its trailing twelve-month returns of 23.08% are beating the market by 7.06%. RepuStars, plagued by scandal-ridden companies that have disappointed stakeholders, is still containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now in its third week at the top ranking with a year-to-date return of 49.8%. Wellpoint Inc (WLP holds onto second place with returns of 24.51% and Lamar Advertising Co (LAMR) remains in third place with a return of 21.38%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, there’s been a shakeup. the greatest disappointments this year are Royal Gold Inc. (RGLD) at -31.51%, scandal-plagued VeriFone Systems Inc. (PAY) at -28.48%, and with the Euro-economy now being stimulated by the central bankers, the third worst performing company is now Walter Investment at -22.04%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading April 26, 2013, REPUVART and REPUVAR stood at 3314.24 and 2825.55 respectively. Over the past four weeks, the former has changed by 1.29%, while the latter has changed by 1.12%. The benchmark S&P500 Composite Index stood at 1378.16 (31 Dec 2001=1000) and has changed over the past four weeks by 0.83%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 15.83% and 13.78% respectively; the S&P500 Composite Index has changed by 12.75%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 54.90% and 48.30% respectively; the S&P 500 Composite Index has changed by 33.67%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

While the economic news is still mixed, actions of the central bankers continue to dominate the news. The net global effect on bond funds is such that even Norway’s oil-funded sovereign fund is abandoning credit due to the effects of western central banks’ money printing. As the Financial Times reports, “Norway’s oil fund has reduced its bond holdings to their lowest ever level…The fund held just 36.7 per cent of its $726bn assets in bonds at the end of the first quarter, the lowest proportion since it first received money in 1996. Its equity holdings were close to a record high, accounting for 62.4 per cent of the total.”

In this setting, it is increasingly apparent that rational expectations, which are central to assessments of reputational value, are among a group of competing drivers of stock price. RepuSpx, a portfolio that seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It moved ahead of the market index for the calendar year by more than 3.4% this week. Its trailing twelve-month returns of 20.981% are beating the market by 7.96%. RepuStars, plagued by scandal-ridden companies that have disappointed stakeholders, is still containing its losses.

The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now in its third week at the top ranking with a year-to-date return of 39.6%. Wellpoint Inc (WLP surged into second place with returns of 22.9% and Lamar Advertising Co (LAMR) slipped back to third place with a return of 18.43%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year are Royal Gold Inc. (RGLD) at -32.46%, scandal-plagued VeriFone Systems Inc. (PAY) at -31.66%, and France-based Compagnie Generale de Gephysqu Vrts SA (CGG) at -30.47%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading April 20, 2013, REPUVART and REPUVAR stood at 3197.10 and 2728.98 respectively. Over the past four weeks, the former has changed by -0.91%, while the latter has changed by -0.99%. The benchmark S&P500 Composite Index stood at 1354.65 (31 Dec 2001=1000) and has changed over the past four weeks by -0.11%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 15.01% and 13.10% respectively; the S&P500 Composite Index has changed by 12.82%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 47.78% and 41.66% respectively; the S&P 500 Composite Index has changed by 28.83%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

The major equity indices are benefitting from the increased attention from the world’s central bankers thus creating a bubble-like effect in the S&P500, among others. In this setting, it is increasingly apparent that rational expectations, which are central to assessments of reputational value, are among a group of competing drivers of stock price. RepuSpx, a portfolio which seeks algorithmically to find the best reputation-linked opportunities among the S&P500 constituent members, continues to benefit from this effect. It moved ahead of the market index for the calendar year by more than 2% this week. Its trailing twelve-month returns of 20.31% are beating the market by 7.36%.

RepuStars, plagued by scandal-ridden companies that have disappointed stakeholders, is still containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now in its third week at the top ranking with a year-to-date return of 31.98%. Lamar Advertising Co (LAMR) is holding on to second place with a return of 19.3%. Bed Bath & Beyond moves up to third place with a year-to-date return of 17.35%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year are scandal-plagued VeriFone Systems Inc. (PAY) at -38.37%; Apple Inc.-linked Fusion-IO, Inc. (FIO) at -34.71%, and France-based Compagnie Generale de Gephysqu Vrts SA (CGG) at -33.04%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Although Huygens confidently asserted over the weekend that the S&P500 was experiencing a bubble, Monday’s rout was still a surprise. It will take a few days to sort out the proximate causes, and it may not be coincidental that sales of shares accelerated on the last day that personal tax returns must be filed in the US. And surely the late-day terror attack at the Boston Marathon finish line didn't calm matters.

It was a comprehensive rout. All major indices fell, as did RepuStars, the reputation-based composite equity index calculated by Dow Jones Indexes and informed by the reputational value metrics from Steel City Re.

RepuStars Variety is a composite equity portfolio that is refreshed each year in January on the premise that the “hidden” value exposed by the Steel City Re reputational value metrics should be discovered by year’s end thus eliminating excess upside in follow on years. In other words, as explained in greater detail in the book, Reputation, Stock Price and You,  in an unstable market, the 2013 portfolio should be more resilient than the 2012 portfolio or the 2011 portfolio.

Huygens notes with interest that today, the 2011 RepuStars portfolio fell 3.35%, the 2012 portfolio fell 3.33%, but the 2013 portfolio comprising the current constituent members of the index fell only 2.86%.

Weekly Reputation Index Metrics

At the close of trading April 13, 2013, REPUVART and REPUVAR stood at 3274.37 and 2794.94 respectively. Over the past four weeks, the former has changed by -0.47%, while the latter has changed by -0.55%. The benchmark S&P500 Composite Index stood at 1383.92 (31 Dec 2001=1000) and has changed over the past four weeks by 1.80%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 18.95% and 16.98% respectively; the S&P500 Composite Index has changed by 15.95%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 52.36% and 45.91% respectively; the S&P 500 Composite Index has changed by 32.70%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

Economic news is mixed. Investors have capitulated to the power of the central banks and are abandoning sovereign debt -- which means they are flooding the safest alternatives that are offering yield. The major equity indices are benefitting from the increased attention creating a bubble-like effect in the S&P500, among others.

In this setting, it is increasingly apparent that rational expectations, which are central to assessments of reputational value, are among a group of competing drivers of stock price. RepuSpx, a portfolio which seeks algorithmically to find the best reputation-linked opportunities in the S&P500, is benefitting from this effect. moved ahead of the market index for the calendar year. Its trailing twelve-month returns of 23.15% are beating the market by 12.05%. RepuStars, plagued by scandal-ridden companies, is containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), now second week the to top rankings with a year-to-date return of 29.11%. Lamar Advertising Co (LAMR) is holding on to second place with a return of 18.93%. WellPoint, Inc. is in its second week at third place with a year-to-date return of 17.71%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year Apple Inc.-linked Fusion-IO, Inc. (FIO) at -33.53%, rscandal-plagued VeriFone Systems Inc. (PAY) at -31.756%;. and France-based Compagnie Generale de Gephysqu Vrts SA (CGG) at -26.4%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading April 5, 2013, REPUVART and REPUVAR stood at 3226.77 and 2754.31 respectively. Over the past four weeks, the former has changed by -1.23%, while the latter has changed by -1.32%. The benchmark S&P500 Composite Index stood at 1352.94 (31 Dec 2001=1000) and has changed over the past four weeks by 0.14%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 14.89% and 12.99% respectively; the S&P500 Composite Index has changed by 11.10%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 52.38% and 45.78% respectively; the S&P 500 Composite Index has changed by 30.59%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

Economic news remains mixed with leading indicators showing reversals and lagging indicators showing growth. Much of the world’s economic future rests on the decisions of the world’s central bankers while the politicians who “govern” them are struggling to find common purpose.

In this setting, it is still not clear what constitutes rational expectations. The S&P500, for example, appears to riding a wave of momentum. RepuSpx, which seeks algorithmically to find the best opportunities in the S&P500, moved ahead of the market index for the calendar year. Its trailing twelve-month returns of 23.15% are beating the market by 12.05%.

RepuStars, plagued by scandal-ridden companies, is containing its losses. The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), new the to top rankings with a year-to-date return of 20.81%. Lamar Advertising Co (LAMR) slips to second place with a return of 16.73%. WellPoint, Inc. is also new to the top ranks with a year-to-date return of 14.67%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year are scandal-plagued VeriFone Systems Inc. (PAY) at -33.6%; Apple Inc.-linked Fusion-IO, Inc. (FIO) at -32.8%. and France-based Compagnie Generale de Gephysqu Vrts SA at -26.99%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading March 29, 2013, REPUVART and REPUVAR stood at 3272.09 and 2794.26 respectively. Over the past four weeks, the former has changed by 3.12%, while the latter has changed by 3.05%. The benchmark S&P500 Composite Index stood at 1366.79 (31 Dec 2001=1000) and has changed over the past four weeks by 3.36%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 14.12% and 12.28% respectively; the S&P500 Composite Index has changed by 11.41%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 59.51% and 52.64% respectively; the S&P 500 Composite Index has changed by 33.75%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

With major holidays in the Jewish and Christian communities, trading on the Western exchanges, concerns about economic uncertainty, and other real world matters took a back seat to ocean cruises and dinners with family. Even North Korea’s bellicosity left most yawning

In this setting, it is still not clear what constitutes rational expectations as RepuSpx reverts to near-parity and RepuStars contains its losses. The greatest gains in the portfolio for the year are being reported by Lamar Advertising Co (LAMR) holds on to first place with a return of 21.48%, up from last week. Bed Bath and Beyond (BBY) holds on to second place with 13.22% for the year, and American Gas Partners strengthens its hold on 3rd place with a return of 13.17%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year are scandal-plagued VeriFone Systems Inc. (PAY) at -32.92%, down a bit; France-based Compagnie Generale de Gephysqu Vrts SA at -26.04%; and Apple Inc.-linked Fusion-IO, Inc. (FIO) at -25.83%.

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 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.

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 20 Jan 2012.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.

Weekly Reputation Index Metrics

At the close of trading March 22, 2013, REPUVART and REPUVAR stood at 3226.37 and 2756.27 respectively. Over the past four weeks, the former has changed by 1.77%, while the latter has changed by 1.63%. The benchmark S&P500 Composite Index stood at 1356.08 (31 Dec 2001=1000) and has changed over the past four weeks by 2.72%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 11.86% and 10.09% respectively; the S&P500 Composite Index has changed by 11.44%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 57.67% and 50.93% respectively; the S&P 500 Composite Index has changed by 32.59%.

Other interval changes in the magnitude of the indices are shown below.

Analysis

The US markets are booming notwithstanding sequestration, the ongoing threats of Federal Government shutdown, and budget impasses. Europe and the BRICs are floundering, and Cyprus is showing that at least part of the independent part of the island shares at least some traits with Greece. It is Alice in Wonderland on Wall Street.

In this setting, it is not clear what constitutes rational expectations – the foundation for RepuStars. Add fraud, regulatory risk, and other surprises, and it makes for a highly volatile portfolio. The greatest gains in the portfolio for the year are being reported by Lamar Advertising Co (LAMR) returns to first place with a return of 19.78%, down a bit from last week, but plenty to surpass last week’s leader, Companhia Energetica Minas Gerais (ADR) (CIG) that lost more than 12% on rumors of regulatory risk. Bed Bath and Beyond (BBBY) returns to second place with 13.51% for the year, and American Gas Partners (APU) is again in the top rankings with a return of 11.16%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.

As for those whose reputational value has not panned out so far, the greatest disappointments this year are scandal-plagued VeriFone Systems Inc. (PAY) at -31.11%; Walter Investment Management Company (WAC) at -26.24%; Apple Inc.-linked Fusion-IO, Inc. (FIO) at -25.65%.

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 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.

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 20 Jan 2013.

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 second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), 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

Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”), a subsidiary of The McGraw-Hill Companies, Inc. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). “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 Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (“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 S&P Dow Jones Indices 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.