The Tipping Point
A Series on Social Positioning while the World is Social Distancing (Part 2)
An important shift has taken place and its full impact won’t be obvious until society has more time to consider their new world. Individuals are taking necessary steps to contain COVID 19 and the levels of seriousness is profound and far reaching.
As a result, brave leaders who are proving that they place their communities, customers and employees ahead of all else are being rewarded with public trust. The rest are feeling the wrath. We see it playing out on Orenda, and will share a few of the good, bad and ugly use cases at our upcoming webinar.
Another shift has happened. We’ve all heard of a growing trend of investing known as ESG, which gives additional value to those companies that commit to good practices socially, environmentally and through strong governance. Up until now, Wall Street relied mostly on corporate reporting to assess these factors. That means the impact of the current escalating crisis won’t be captured until the next quarterly report. However, society has an immediate and intimate view of a company’s level of commitment and behaviour and are judging them openly on social media.
We are also looking for companies that are not only good to those inside their walls, but also those that are going the extra step to help protect those severely impacted by this Global standstill. We understand that the UN’s Sustainable Development Goals (SDGs) are crucial to our world’s full recovery and for companies who have enjoyed favorable cashflows for many years, we look to them to help bring balance to our planet. When tragedy strikes, we look for heroes.
At Orenda, we stream social content for indices, such as the S&P 500, TSX 60 and SMI, through our AI-powered algorithms to continually calculate social positioning scores. We can tell firsthand which companies are reaching a tipping point based on public opinion and when emotion is contagious. We refresh these numerical scores 144 times a day to unlock many small movements and see when these scores signal a change. When an index is drowning in red, we use our models to unlock which ones are good and green with great speed. Those are the equities worth buying now.
This isn’t a new concept; we’ve always known that financial models need more data to determine emotional influences on the market. We just had to work hard to make it meaningful and manageable. We had to package it in such a way that made it “irresistible.” In a few short weeks, our packaged data will be available through a global data distribution channel – we will make a public announcement with our partner soon. We will also host a series of webinars and online workshops to help others use these unique and timely scores in complex models to create proprietary datasets.