A study from the USC Marshall Center for Global Innovation co-authored by Gerard Tellis, Professor and Director of the Center and Andreas Eisingerich Assistant Professor at Imperial College London, has developed an index of innovative firms. Portfolios of top firms on this index appear to perform better than the S&P 500 in up markets and almost as well in down markets. The superior performance comes without excessive risk.
“The results suggest that innovation is a valid criterion of portfolio formation, just as the current criteria of size, value, growth, and price,” said Tellis.
The study’s sample is drawn from Fortune’s list of the 300 largest US firms and Business Week’s list of the 100 most innovative firms, between 2004 and 2008. The innovation index is based on five metrics that use objective market data as opposed to polling. All data are collected from public market sources by two independent research assistants under supervision of a statistician.
“Polls suffer from the tyranny of hype” says Tellis, “Names that get early recognition get greater visibility in the press, which accentuates their popularity, leading to a positive cascade in their favor.”
“A crucial aspect of this index is the link between innovation measured on this index and current and future financial performance,” says Tellis.
The superior performance holds not only in current year performance but also in one-year-ahead performance. “The ultimate test of an index is whether it can predict stock market performance a year ahead,” says Eisingerich. For example:
• In the five years between 2004 and 2008, an annual paper investment of $10,000 in a portfolio of top 20 firms in the Index yields a cumulative return that is 46% higher than the S&P 500 for concurrent years
• For one-year-ahead performance the increase in returns is 23% for the top 20 portfolio over the S&P 500
The authors are updating the study to include 2009 and 2010 data and plan to test the performance of the index on real investments.
The full-report and details of the findings are available at the Center’s website (http://www.marshall.usc.edu/cgi/innovation). Details of the method, metrics, & ranking of firms by year are available from the Center at firstname.lastname@example.org
Amy Blumenthal | Newswise Science News
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.
The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
08.12.2016 | Materials Sciences
08.12.2016 | Materials Sciences
08.12.2016 | Physics and Astronomy