Human Capital Index
The discussion revolves around constructing a human capital index by selecting the top 20% of companies based on their management practices, equally weighting them, and rebalancing quarterly for optimal returns. Insights reveal that the data used for this index has a half-life of about 18 months, suggesting a need for regular updates to maintain its relevance and predictive power. The interplay between human capital and investment performance is emphasized, with the potential for customization based on additional criteria like sector balance or ESG factors.In this clip
From this podcast
Capital Allocators – Inside the Institutional Investment Industry
Dan Ariely – The Human Capital Factor (Capital Allocators, EP.195)
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