There was a great post last week on the Empirical Finance Research blog that asked the question: Does the Stock Market Value Intangibles? The post reviews a paper by Alex Edmans at the Wharton School of Business at University of Pennsylvania, which looked at the relationship between employee satisfaction and equity prices.

Edmans concluded that from 1998-2005, a stock portfolio of the companies listed on Fortune magazine’s “Best Companies to Work For in America” increased in value by an average of 13% per year–double the rate of the market as a whole. Empirical Finance outlines how to build an investment strategy based on this fact.

This looks like a fun blog. The post previous to this one gave rating of 5 (on a scale from 1 to 10) for a strategy that looks at CEO real estate purchases as an indicator of expected declines in stock prices. They gave a rating of 9 to strategy based on investing in Fortune’s Best Companies list as a simple way of targeting companies that create the most value in today’s “ideas-based service economy.”

I’m not an investment adviser. But I am a consultant that has seen a lot of winning (and losing) companies over the years. And I know that the winners understand that we live in a knowledge-based economy. Knowledge starts with people. Knowledge only grows with the input of people. People cannot be ordered to think better. They have to want to do it. So employee satisfaction is an important component of a winning strategy in any company.