Is there a survey of our friends’ ventures into the worlds of personal finance and investing?
- a group of EAs worked for Jane Street Capital in NYC (sounds impressive) but went on to found FTX (incompetent at business mechanics but really good at manipulating people)
- their Jane Street sponsor James McClave seems like old money since he has a family foundation
- Aella invested heavily in crypto in 2013 but was not able to turn it back into real money at a profit; she was also involved with a dating site in the Terra/Luna ecosystem
- so many other failed cryptocurrency schemes
- investment posts on LessWrong are few and unimpressive, on the level of “if I need money in a few years and emerging market stocks tend to do best, should I invest all the money in them?” The people with clues tend to disappear from the site.
- they are obsessed with prediction markets but their favourite uses their own brand of play money not hard currency https://manifold.markets/
- EA staff don’t seem to understand the terms under which they hold $20m of real estate in Berkeley, and frequently misuse accounting terms
- I don’t know anyone in this space who has founded a profitable business bigger than one person, and the one-person freelance businesses are scarce
- Leopold Aschenbrenner who is one step away from FTX and Anthropic just blew up his $45 billion hedge fund with too much leverage
- JueYan Zhang had a ten-year career as a hedge-fund manager but switched to redistributing donations
- many of their friends are fringe economists at George Mason University like Tyler Cowen and Robin Hanson
It seems like their problem is less their quack economics and overconfidence than that learning the basics is hard, practicing them requires self-discipline and willingness to fail, and they can always talk a friend into wiring them another $100,000. So they sling the lingo but generally know less than a high-school graduate who reads books on personal finance from the library and spent a few summers running a house-painting business.
Does anyone have a favourite story?
You must log in or # to comment.
Leopold Aschenbrenner […] just blew up his $45 billion hedge fund
Nomen est omen strikes again (Aschenbrenner can colloquially be translated as “money burner”).
It seems like their problem is less their quack economics and overconfidence than that learning the basics is hard, practicing them requires self-discipline and willingness to fail, and they can always talk a friend into wiring them another $100,000. So they sling the lingo but generally know less than a high-school graduate who reads books on personal finance from the library and spent a few summers running a house-painting business.
I would be really really really surprised if, on average, LWers (et al.) performed better or worse than the average schmuck who decided to take a punt on proper investing or running a business or whathaveyou.
Beating the market is extremely hard. Riding the market is unbelievably easy, and gets easier constantly. Running a successful business is nearly impossible and gets harder all the time.
For these reasons most people don’t bother, take a job in somebody else’s company, and sometimes invest their savings in something very broad and shallow and safe like an index fund.
On the other hand, rationalism is an extremely well-funded cult, so it’s top-heavy with unbelievably bad decisions made with infinite thielbucks.
——-
Probably you can find a fair few good stories which are couched as “donations” because, again, rationalism is a cult, and investments in a business are framed in terms of “donations”, or tithes, to this or that cause within the movement. It may not offer a concrete return to the tither, but as with a tithe they do actually expect to get something in return.
If Scott Siskind Alexander very publicly kicks a few bucks to Max More’s cryonics scheme every now and then alongside human enhancement research to preserve a future for our white children, and makes sure he’s picked the RIGHT AI alignment protocol, he isn’t a neutral third party to the future those decisions are helping design.
The whole architecture of the group is a speculative ponzi scheme projected far off enough into the future that nobody can complain when their abstract ideas of expected return fail to come good after all.
Indeed on another level looking for good stories about bad investments is a bit of a contradiction in the sense that what you’re looking at to begin with is, for whatever else turns up in the ‘TESCREAL’ acronym, primarily a scam dreamed up by Eliezer Yudkowsky back in the early 2000s no different from scientology and L. Ron Hubbard.
their problem is … [several items omitted] … they can always talk a friend into wiring them another $100,000
Assuming you’re correct about that, I would love an explanation of how they come to have this enviable problem. Is it primarily a matter of social class, or is there some more specific category of origin which produces people who can’t invest or run a business, but never run out of opportunities to keep trying?
Mitchell, you’ve been around rationalism long enough.
I’ve been on their online forums, but I have literally zero experience of the Bay Area rationalist scene or any other. Of course I know about the billionaires, but I thought the answer was going to be that the rationalists come from wealthy families and social circles.
Some of the Zizians had parents who paid for them to bum around in the Bay Area for a few years, but AFAK no famous rationalist has parents who donated a few million to a charity which subsequently gave the child a make-work job. Their most enthusiastic patrons are New Money too.
Edit / SBF has rich and connected parents who were involved in his business ventures
The short version is probably “MetaMed and FTX were a typical rationalist businesses” but there have to be more anecdotes. These are not people who spend less than they earn, own Booglehead portfolios, and take night classes on business to get ready to launch their side hustle next year.
I think it mostly comes through very wealthy patrons, less from Effective Altruists like Zhang who they persuaded to “earn to give” at the start of their careers (although they hope all their friends at AI startups will donate their shares to the cause). Most of those billionaires were in the software industry before 2008.
- Jaan Tallinn of Skype and Kazaa
- Peter Thiel
- Dustin Moskovitz (turned off the taps a few years ago)
- Elon Musk
- Sam Bankman-Fried (oops)
- some crypto speculator
- Mark Zuckerberg (on the edge)
- Jeff Bezos (on the edge)
- Eric Schmidt (the thing with Zhang is the first I can recall)
- James McClave and his BEMC foundation who funded a whole EA propaganda outlet at Vox
Small donors to EA orgs don’t always know the money will pay Yud $600,000 a year to think great thoughts, or Nonlinear Fund to be digital nomads with a live-in servant, or the European EAs to buy a Czech castle to hold retreats. I have not looked into who funds Effective Altruism after FTX went bankrupt but the pledge drives always have matching donations from a foundation with a billionaire patron.
And then the people who receive the benefits and earn hundreds of thousands a year pass on $50-100k at a time to their friends.
This blog post talks about who funds one EA organization. https://rufuspollock.substack.com/p/what-lightcone-infrastructures-financial. Note that all the foundations like OpenPhil (Moskovitz) and SFF (Tallinn) which are mostly a way to distribute one patron’s funds have well-paid senior staff. They are not squeamish about letting a former CFAR board member join the grants committee that votes money for CFAR either.
I cover all the overlapping organizations at http://effective-altruism.com/ea/gb/the_2014_survey_of_effective_altruists_results/
this enviable problem
I mean, if you are willing to sell your soul writing screeds (or funding cults like in the case of Leverage ) in line with the ideologies of people like Peter Thiel or Andreessen Horowitz there seems to be a pretty solid marketplace for that?
to sell your soul writing screeds
Thanks to gen AI, you don’t have to.
