There are SPX options that expire in 2027, 2028, and 2029, those seem more attractive to me than 2-3-y-dated VTI options, especially given that they have strike prices that are much further out of the money.
Would you mind posting the specific contracts you bought?
I have some of those in my portfolio. It’s worth slowly walking GTC orders up the bid-ask spread, you’ll get better pricing that way.
Doing a post-mortem on sapphire’s other posts, their track record is pretty great:
BTC/crypto liftoff prediction: +22%
Meta DAO: +1600%
SAVE: −60%
BSC Launcher: −100%?
OLY2021: +32%
Perpetual futures: +20%
Perpetual futures, DeFi edition: +15%
Bet on Biden: +40%
AI portfolio: approx. −5% compared to index over same time period
AI portfolio, second post: approx. +30% compared to index over same time period
OpenAI/MSFT: ~0%
Buy SOL: +1000%
There are many more that I didn’t look into.
All of these were over a couple weeks/months, so if you just blindly put 10% of your portfolio into each of the above, you get very impressive returns. (Overall, roughly ~5x relative to the broad market.)
Worth pointing out that this is up ~17x since it was posted. Sometimes, good ideas will be communicated poorly, and you’ll pay a big price for not investigating yourself. (At least I did.)
Just stumbled across this post, and copying a comment I once wrote:
Intuitively and anecdotally (and based on some likely-crappy papers), it seems harder to see animals as sentient beings or think correctly about the badness of factory farming while eating meat; this form of motivated reasoning plausibly distorts most people’s epistemics, and this is about a pretty important part of the world, and recognizing the badness of factory farming has minor implications for s-risks and other AI stuff
With some further clarifications:
Nobody actively wants factory farming to happen, but it’s the cheapest way to get something we want (i.e. meat), and we’ve built a system where it’s really hard for altruists to stop it from happening. If a pattern like this extended into the long-term future, we might want to do something about it.
In the context of AI, suffering subroutines might be an example of that.
Regarding futures without strong AGI: Factory farming is the arguably most important example of a present-day ongoing atrocity. If you fully internalize just how bad this is, that there’s something like a genocide (in terms of moral badness, not evilness) going on right here, right now, under our eyes, in wealthy Western democracies that are often understood to be the most morally advanced places on earth, and it’s really hard for us to stop it, that might affect your general outlook on the long-term future. I still think the long-term future will be great in expectation, but it also makes me think that utopian visions that don’t consider these downside risks seem pretty naïve.
I used to eat a lot of meat, and once I stopped doing that, I started seeing animals with different eyes (treating them as morally relevant, and internalizing that a lot more). The reason why I don’t eat meat now is not that I think it would cause value drift, but that it would make me deeply sad and upset – eating meat would feel similar to owning slaves that I treat poorly, or watching a gladiator fight for my own amusement. It just feels deeply morally wrong and isn’t enjoyable anymore. The fact that the consequences are only mildly negative in the grand scheme of things doesn’t change that. So [I actually don’t think that] my argument supports me remaining a vegan now, but I think it’s a strong argument for me to go vegan in the first place at some point.
My guess is that a lot of people don’t actually see animals as sentient beings whose emotions and feelings matter a great deal, but more like cute things to have fun with. And anecdotally, how someone perceives animals seems to be determined by whether they eat them, not the other way around. (Insert plausible explanation – cognitive dissonance, rationalizations, etc.) I think squashing dust mites, drinking milk, eating eggs etc. seems to have a much less strong effect in comparison to eating meat, presumably because they’re less visceral, more indirect/accidental ways of hurting animals.
Yeah, as I tried to explain above (perhaps it was too implicit), I think it probably matters much more whether you went vegan at some point in your life than whether you’re vegan right now.
I don’t feel confident in this; I wanted to mainly offer it as a hypothesis that could be tested further. I also mentioned the existence of crappy papers that support my perspective (you can probably find them in 5 minutes on Google Scholar). If people thought this was important, they could investigate this more.
You can also just do the unlevered versions of this, like SMH / SOXX / SOXQ, plus tech companies with AI exposure (MSFT, GOOGL, META, AMZN—or a tech ETF like QQQ).
A leverage + put options combo means you’ll end up paying lots of money to market makers.
I think more like you don’t argue why you believe what you believe and instead just assert it’s cool, and the whole thing looks a bit sloppy (spelling mistakes, all-caps, etc.)
Does anyone know if the 2022 survey responses were collected before or after ChatGPT came out?
I think having some personal retirement savings is still useful in a broad range of possible AGI outcome scenarios, so I personally still do some retirement saving.
Regarding 401k/IRA, anything that preserves your ability to make speculative investments based on an information advantage (as outlined in this post) seems especially good; anything that limits you to a narrow selection of index funds seems potentially suboptimal to me.
What’s the story for why we would have an advantage here? Surely quants who specialize in this area are on top of this, and aren’t constrained by capital? Unlike previous trades where rationalists made lots of money (Covid short, ETH presale, etc.), this doesn’t look like a really weird thing that the pros would be unable to do with sufficient volume.
You mean an AI ETF? My answer is no; I think making your own portfolio (based on advice in this post and elsewhere) will be a lot better.
Very helpful, thanks. And interesting about the Eris SOFR Swap Futures.
Interest rate swaptions might also be worth looking into, though they may only be available to large institutional investors.
Why not just short-sell treasuries (e.g. TLT)?
If you’re running an event and Lighthaven isn’t an option for some reason, you may be interested in Atlantis: https://www.lesswrong.com/posts/pvz53LTgFEPtnaWbP/atlantis-berkeley-event-venue-available-for-rent
Market on the primary claim discussed here:
I personally would not put Meta on the list
Yes, but if they’re far out of the money, they are a more capital-efficient way to make a very concentrated bet on outlier growth scenarios.
No, but I also didn’t reach out (mostly because I’m lazy/busy)
There’s some evidence from 2013 suggesting that long-dated, out-of-the-money call options have strongly negative EV; common explanations are that some buyers like gambling and drive up prices. See this article. I also heard that over the last decade, some hedge funds therefore adopted the strategy of writing OTM calls on stocks they hold to boost their returns, and also heard that some of these hedge funds disappeared a couple years ago.
Has anyone looked into whether 1) this has replicated more recently, 2) how much worse it makes some of the suggested strategies (if at all)?
Implied volatility of long-dated, far-OTM calls is similar between AI-exposed indices (e.g. SMH) and individual stocks like TSM or MSFT (though not NVDA).
The more concentrated exposure you get from AI companies or AI-exposed indices compared to VTI is likely worth it, unless you expect that short-timelines slow AI takeoff will involve significant acceleration of the broader economy (not just tech giants), which I think is not highly plausible.