New index to pegged to intellectual property value

[HenryTo]

This is interesting - courtesy of P&I Online:
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New index to pegged to intellectual property value
October 25, 2006

Ocean Tomo today introduced an investible intellectual property stock index, called the Ocean Tomo 300 Patent index, said Keith Cardoza, managing director. The index, based on the value of corporate intellectual property, is made up of 300 global companies that trade on U.S. markets, own U.S. patents for valuable innovations and technologies and have the highest patent value relative to their tangible book value, he said.

“It’s meant to be a broad-based diversified index,” said Mr. Cardoza, who created the index. “It is the first index that represents the knowledge economy we are in.”

The index has a market capitalization of $7 trillion and offers growth and value and large-cap and small-cap size equity subindexes, Mr. Cardoza said.

Claymore Securities is seeking to launch an exchange-traded fund that would track the patent index, pending approval of registration filed this month with the SEC, said David Cohen, managing director-new product engineering at Claymore.

The index returned an annualized 11.69% in a backtest for the 10 years ended Sept. 30, compared with the S&P 500’s annualized return of 8.59%, he said. The Ocean Tomo index has the same beta as the S&P 500.

In 2007, Ocean Tomo plans to introduce a global stock index based on brands and another index based on copyrights, both forms of intellectual property, Mr. Cardoza added.

[rffrydr]

My gmail was accessed this weekend from somewhere in India. Looks like the new flat panel I was setting up the night before is not HTTPS capable. And the password was hard. They most definitely are "out there."

http://www.bbc.co.uk/programmes/b0112ydv#synopsis
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

I'd be surprised if Intellectual Property can be indexed as (supposed to be) envisioned by this ETF. IP grows organically. The patented ideas that are not pie-in-the-sky are mostly defensive; delimiting boundaries in an evolution of a product line all of which can be swept away by the next revolution in "killer apps." The extent that copyright devices weight down such an index underscores this.

When change comes it blossoms forth generating clusters of ideas around it leaving a line of old protective and evolutionary patents to wither like so much dead wood. One trasistor patent's overwelms a a half-century of vacuum tubes, ipso facto now with internet routing. Often it is just a question of culture and marketing: the IPAQ was around "forever" before the IPOD made MP3's part of modern life.

Investing in the future is never going to be a matter of quantity. Casting a wide net will just magnify your miss.