Why trust your prior over the prior of the market/hedge funds? By this I mean why expect that this isn’t already priced in? AI (and AGI) is a big enough news story now such that I would expect hedge funds to be thinking about things like this. At recruiting events, I’ve asked quants how they’re thinking about this exact question and I usually got pretty decent AGI pilled responses.
It is certainly possible that the market hasn’t priced this in, but my prior is in the vast, vast majority of cases, there is some quant that has already sucked out any potential gains one could get.
It’s crucial for the argument that it’s priced in. You own a risky asset, your job. The market values that risk at $0, because you can diversify it away. Investing in assets that profit when you lose your job is how you do that.
The way wealth accumulates forces you to be overexposed to the market near retirement and underexposed now. That’s more $0-valued risk. It’s a practical problem you can fix with leverage.
Why trust your prior over the prior of the market/hedge funds? By this I mean why expect that this isn’t already priced in? AI (and AGI) is a big enough news story now such that I would expect hedge funds to be thinking about things like this. At recruiting events, I’ve asked quants how they’re thinking about this exact question and I usually got pretty decent AGI pilled responses.
It is certainly possible that the market hasn’t priced this in, but my prior is in the vast, vast majority of cases, there is some quant that has already sucked out any potential gains one could get.
[Edit: reworded for clarity]
It’s crucial for the argument that it’s priced in. You own a risky asset, your job. The market values that risk at $0, because you can diversify it away. Investing in assets that profit when you lose your job is how you do that.
The way wealth accumulates forces you to be overexposed to the market near retirement and underexposed now. That’s more $0-valued risk. It’s a practical problem you can fix with leverage.