In 1975, tangible assets (factories, inventory, land) comprised 83% of the S&P 500's value. Today, the script has flipped. According to J.P. Morgan's *Guide to the Markets*, **90% of the S&P 500's market capitalization is now "Intangible Assets"** (IP, Brand, Data, Human Capital). This means traditional GAAP accounting, which excels at measuring factories but fails at measuring talent, is effectively blind to 90% of the value drivers in the modern economy.
https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/We believe "Book Value" is a relic. If 90% of a company's value is intangible, then the only way to assess its true worth is to audit its intangible drivers: Culture, Leadership, and Brand. We do not look for "cheap" stocks based on Price-to-Book; we look for "mispriced" stocks based on the quality of their intangible infrastructure. We are buying the 90%, not the 10%.
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