Redefining Value Investing in a Magnificent Seven Dominated World | Jacob Pozharny

In this episode of the Excess Returns podcast, Jacob Pozharny from Bridgeway Capital Management discusses the growing significance of intangible assets in how we value companies and approach investments. He introduces the idea of "intangible intensity," explaining how we can measure it through capitalized intangible assets, research and development, and selling, general, and administrative expenses. Pozharny points out that traditional valuation methods often fall short for companies rich in intangible assets, making sentiment analysis increasingly important. Bridgeway employs different stock selection strategies for companies with high versus low intangible assets, focusing on sentiment analysis for the former and sticking to fundamental analysis for the latter. Overall, the podcast underscores the necessity for flexible investment strategies in an economy where intangible assets are on the rise, while also addressing the challenges AI presents in valuation processes.