New paper: Searching for Superstars π
β’ Ability to attract talent is a moat π°
β’ Companies hiring talent from elite competitors and universities outperform π
β’ Company social networks / PageRank πΈοΈ
β’ March Madness-themed bonus section π
The performance gap between the best and average worker is growing. However, unlike in sports, investors lack metrics to identify teams with top-tier talent.
(2/10) Human Capital Map
To solve this problem, we build a "social network" based on human capital flows from one company to another.
(3/10) Superstar Aggregators
We apply the PageRank algorithm to this network to find companies that are winning the War for Talent. We run a backtest and find these firms have outperformed the stock market.
(4/10) Wall Street vs. Silicon Valley
From a macro level, superstar talent has been fleeing Wall Street into Silicon Valley's open arms.
(5/10) Industry Clusters
Our graph allows us to cluster firms based on their hiring patterns. This provides a useful alternative to static industry classifications (GICS, SIC).
(6/10) University Alumni Portfolios
We build portfolios of companies that employ high concentrations of alumni from top universities. Here are the employers with the highest concentration of Ivy League grads.
(7/10) US News & World Report
Using US News & World Report rankings, we find that companies able to attract grads of the top 50 universities have outperformed.
(8/10) March Madness π
We use hierarchical clustering to build a March Madness-style "bracket." Each match will be decided by a horse race of 2005-2020 performance of each school. Before you peek at the next Tweet, place your bets! π
(9/10) Tournament Results
And the champion is ... UC San Diego π!
(10/10) Conclusion
As in sports, the economy is increasingly driven by superstar talent. Companies with superstar teams have beat the market. Human capital flows allow us to find these winning franchises.