A Staggering 84% Of All S&P500 Assets Are Now Intangible

Last week, e brought you some of the latest musing from Bank of America’s Jared Woodard, who in the latest Research Investment Committee report discussed the reason why value investing is dead attributing it to a recent transformation in the market where it is “all one trade” now.

However, besides the merely reflexive, where central bank liquidity, relentless momentum chasing, frenzied retail investing in out of the money calls and 3x levered ETFs coupled with the occasional institution forcing a marketwide gamma squeeze, combine into one explosive force propelling the “one trade” ever higher in the process leaving value in the dust, there is a far more tangible – or rather intangible – reason why “value” is no longer value in the conventional sense.

As BofA writes, investors should simply reconsider the definition and meaning of “value.” Take the price-to-book ratio, a favorite metric from the days of Graham & Dodd, and which to this day remains a key input to all major value indexes and factors. As BofA notes, investors should be aware that traditional book value (assets minus liabilities) ignores many of the resources that are most important to companies today.


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