Dynamic ESG investing and asset management

·         Outperformance of strong ESG companies in the healthcare sector   with  trust as an               obvious important factor

·         Dynamic models including social media sentiment analysis necessary to capture long             term and short term trends

·         Adjust strategy according to sentiment analysis

·         Dynamic ESG could provide a competitive advantage for a certain period of time in asset       management competition

·         As long as such articles are not posted in blogs (like this one)


A core issue to understand is that ESG is a lot about limiting the downside risk. Statistical methods (higher moments) and analyzing annual reports does not help to capture unknown events. ESG could potentially help to quantify some of the intangible factors (the character of the company).


I personally believe that we use to often heuristics as mental shortcuts in our thinking as shown by Daniel Kahneman (or pattern thinking, “How to Create a Mind”, Ray Kurzweil ). This results in undervaluing on average the impact of convex factors (because of convexity even less than average could still be a very successful strategy, see "Antifragile", Nassim Taleb), like climate change (or chain reactions, see “A Demon of our Own Design”,  Richard Bookstaber ) and do not act on it in real life or price them correctly in the investment world. Therefore, investing into convex factors (some of them can be captured with ESG analysis) outperforms over time. 

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