The world of investing has changed significantly since Benjamin Graham and David Dodd first invested value investing nearly 90 years ago. Today, it is easy for any investor to quickly assess the potential of any company via the Internet and plethora of stock screeners ensure that value opportunities are quick and easy to find.

It’s not just the accessibility of financial information has improved it is the nature of companies themselves.

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Ocean Tomo LLC, the Intellectual Capital Merchant Banc™ firm, publishes an annual study of intangible asset market value. The last time the annual study was published was in early 2015, and while it is now out of date, the figures revealed within the report are still relevant.

Intangible Assets Now Account For More Than 84% Of S&P 500

Back in 1975 tangible assets comprised 83% of the S&P 500 market value with the other 17% being made up of intangible assets. By 1995 intangible assets had grown to 68% of the S&P 500 market value with intangible assets down to 32% and by 2015 intangible assets had risen to a staggering 84% of S&P 500 market value. Intangible assets had fallen to just 16% of the S&P 500’s market by 2015. These figures mean that more than four-fifths of the S&P 500’s current value is now attributed to human ideas and intellectual property or imaginary value created through acquisitions. [Note: Thanks to the tech rally that’s taken place since this study was published, it’s reasonable to assume the intangible percentage of the S&P 500 is now above 84%.

The shift away from tangible towards intangible assets has almost certainly made value investing more difficult. The cookie cutter approach is no longer value and investors now have to put in more work to dig out the value than Graham and Dodd would have had to do when they first set out.

But as the FT points out, this has always been the case, although in the boom times it might not have seemed like it.

Value investing is very easy to boil down to quantifiable ratios, price to book, price to earnings and the like. Indeed, many so-called passive funds use this approach to dig out value although as Miles Johnson explains in the FT the value investor is not “simply trying to find stocks that trade on low P/E multiples” they’re trying to “dig out securities that are, for one reason or another, mispriced and misunderstood by the wider market.”

The rise of the intangible asset has no doubt made this process more complicated for investors. Intangible assets now often dominate the earnings and investment of big business, and this should be taken into account when people make historical comparisons about price-to-book multiples.

Still, how do you place a value on an intangible asset, do you guess cash flows based on historic performance or estimate returns based on the performance of other companies following a similar pattern? How do you know if the asset is even worth what the company says it is?

Granted, these problems can be avoided by only studying those companies with a tangible asset base, and only calculating tangible asset values but with intangible assets so prevalent, that task may be harder than it first appears.