I cannot understand why anyone, at this point in history, would spend more than ~10% of their investment money on any assets that they would expect to take more than 3 years to double in value.
What specifically do you think has a 26% expected ARR, while also being low-risk or diversified enough to hold 90% of your investable wealth? That’s a much more aggressive allocation to e.g. the entire crypto-and-adjacent ecosystem than I’m comfortable with.
Definitely not crypto, at least not sustainably / predictably. Things along the lines of stock in Tesla, Microsoft, or Google, however, have been performing at such a pace, and I expect in most timelines they will continue that pace in the near future, enough for the expected value to be strongly positive.
(Edit to add:) These stocks, and similar stocks, are in position to take advantage of value generated by trends that are currently starting / are underway, that will produce substantial real-world value, ignorans clades singularitatis, unlike most (almost all) crypto currencies.
Ah, that position makes a lot of sense. Here’s why I’m still in boring market-cap-indices rather than high-growth tech companies:
I think public equity markets are weakly inexploitable—i.e. I expect tech stocks to outperform but not that the expected value is much larger than a diversified index
Incumbents often fail to capture the value of new trends, especially in tech. The sector can strongly outperform without current companies doing particularly well.
Boring considerations about investment size, transaction fees, value of my time to stay on top of active trading, etc.
Diversification. Mostly that as a CS PhD my future income is already pretty closely related to tech performance; with a dash of the standard arguments for passive indices.
And then I take my asymetric bets elsewhere, e.g. starting HypoFuzz (business plan).
Incumbents often fail to capture the value of new trends, especially in tech. The sector can strongly outperform without current companies doing particularly well.
Strong agree on this. But while they may capture only a fraction of the growth, I do expect that they will capture enough to grow substantially (this is, in part, helped by the overall growth I expect to be massive). But there is always a chance that even that doesn’t happen. I do wish I had a better sense of what current upstarts are well-poised to make an even larger profit in the near future.
Diversification. Mostly that as a CS PhD my future income is already pretty closely related to tech performance; with a dash of the standard arguments for passive indices.
This is certainly valid for the extreme size of my proposed allocation, but I suspect that you stand to profit even more from investing in high-growth stocks than you receive directly from your work; also, not all of the growth I expect is directly related to CS / AI, namely covering the Earth with solar panels, then putting solar panels / solar-powered computers into space (also something something nuclear). The latter case is my main justification for owning Tesla stock, and I’d say isn’t overly strongly correlated with CS trends (although not incompletely either).
Historically, haven’t assets that claim to take less than 3 years to double in value had a high probability of losing value instead? What are examples of the assets of this sort in the past few decades and at the present time?
Of course, it’s easy for someone to claim that something will double in value quickly, and sometimes things even double in value quickly, despite being built on hot air (textbook example, the dutch tulip rush). The important trick is to use first-principles, real-world reasoning to identify the few opportunities that actually can generate real value that quickly. The world would be very different if such companies didn’t exist. I invested in Tesla, Microsoft, and Google using such real-world, first-principles reasoning, and these companies has grown at such a clip during the time I have been invested in them (which has been for ~1-3 years depending on the specific asset)
I cannot understand why anyone, at this point in history, would spend more than ~10% of their investment money on any assets that they would expect to take more than 3 years to double in value.
What specifically do you think has a 26% expected ARR, while also being low-risk or diversified enough to hold 90% of your investable wealth? That’s a much more aggressive allocation to e.g. the entire crypto-and-adjacent ecosystem than I’m comfortable with.
Definitely not crypto, at least not sustainably / predictably. Things along the lines of stock in Tesla, Microsoft, or Google, however, have been performing at such a pace, and I expect in most timelines they will continue that pace in the near future, enough for the expected value to be strongly positive.
(Edit to add:) These stocks, and similar stocks, are in position to take advantage of value generated by trends that are currently starting / are underway, that will produce substantial real-world value, ignorans clades singularitatis, unlike most (almost all) crypto currencies.
Ah, that position makes a lot of sense. Here’s why I’m still in boring market-cap-indices rather than high-growth tech companies:
I think public equity markets are weakly inexploitable—i.e. I expect tech stocks to outperform but not that the expected value is much larger than a diversified index
Incumbents often fail to capture the value of new trends, especially in tech. The sector can strongly outperform without current companies doing particularly well.
Boring considerations about investment size, transaction fees, value of my time to stay on top of active trading, etc.
Diversification. Mostly that as a CS PhD my future income is already pretty closely related to tech performance; with a dash of the standard arguments for passive indices.
And then I take my asymetric bets elsewhere, e.g. starting HypoFuzz (business plan).
Strong agree on this. But while they may capture only a fraction of the growth, I do expect that they will capture enough to grow substantially (this is, in part, helped by the overall growth I expect to be massive). But there is always a chance that even that doesn’t happen. I do wish I had a better sense of what current upstarts are well-poised to make an even larger profit in the near future.
This is certainly valid for the extreme size of my proposed allocation, but I suspect that you stand to profit even more from investing in high-growth stocks than you receive directly from your work; also, not all of the growth I expect is directly related to CS / AI, namely covering the Earth with solar panels, then putting solar panels / solar-powered computers into space (also something something nuclear). The latter case is my main justification for owning Tesla stock, and I’d say isn’t overly strongly correlated with CS trends (although not incompletely either).
Historically, haven’t assets that claim to take less than 3 years to double in value had a high probability of losing value instead? What are examples of the assets of this sort in the past few decades and at the present time?
Of course, it’s easy for someone to claim that something will double in value quickly, and sometimes things even double in value quickly, despite being built on hot air (textbook example, the dutch tulip rush). The important trick is to use first-principles, real-world reasoning to identify the few opportunities that actually can generate real value that quickly. The world would be very different if such companies didn’t exist. I invested in Tesla, Microsoft, and Google using such real-world, first-principles reasoning, and these companies has grown at such a clip during the time I have been invested in them (which has been for ~1-3 years depending on the specific asset)