I’m thinking that the most ethical (morally least risky) way to “insure” against a scenario in which AI takes off and property/wealth still matters is to buy long-dated far out of the money S&P 500 calls. (The longest dated and farthest out of the money seems to be Dec 2029 10000-strike SPX calls. Spending $78 today on one of these gives a return of $10000 if SPX goes to 20000 by Dec 2029, for example.)
My reasoning here is that I don’t want to provide capital to AI industries or suppliers because that seems wrong given what I judge to be high x-risk their activities are causing (otherwise I’d directly invest in them), but I also want to have resources in a post-AGI future in case that turns out to be important for realizing my/moral values. Suggestions welcome for better/alternative ways to do this.
This probably does help capitalize AI companies a little bit, demand for call options will create demand for the underlying. This is probably a relatively small effect (?), but I’m not confident in my ability to estimate this at all.
Default seems unlikely, unless the market moves very quickly, since anyone pursuing this strategy is likely to be very small compared to the market for the S&P 500.
(Also consider that these pay out in a scenario where the world gets much richer — in contrast to e.g. Michael Burry’s “Big Short” swaps, which paid out in a scenario where the market was way down — so you’re just skimming a little off the huge profits that others are making, rather than trying to get them to pay you at the same time they’re realizing other losses.)
It seems hard to buy AI companies at the moment. The only way is to buy tech giants like Microsoft, Google, nVidea which are already valuad very highly—seems like’s it’s somewhat priced in. It’s also not clear to me that most of the value of AI will accrue to them. I’m confused about this though.
It would seem one would want to buy Nasdaq rather than SPX? On the other hand, maybe most tech companies will be wiped out by AI—it’s the world of atoms that would gain relative value.
It’s also not clear to me that most of the value of AI will accrue to them. I’m confused about this though.
I’m also uncertain, and its another reason for going long a broad index instead. I would go even broader than S&P 500 if I could, but nothing else has option chains going out to 2029.
I’m thinking that the most ethical (morally least risky) way to “insure” against a scenario in which AI takes off and property/wealth still matters is to buy long-dated far out of the money S&P 500 calls. (The longest dated and farthest out of the money seems to be Dec 2029 10000-strike SPX calls. Spending $78 today on one of these gives a return of $10000 if SPX goes to 20000 by Dec 2029, for example.)
My reasoning here is that I don’t want to provide capital to AI industries or suppliers because that seems wrong given what I judge to be high x-risk their activities are causing (otherwise I’d directly invest in them), but I also want to have resources in a post-AGI future in case that turns out to be important for realizing my/moral values. Suggestions welcome for better/alternative ways to do this.
This probably does help capitalize AI companies a little bit, demand for call options will create demand for the underlying. This is probably a relatively small effect (?), but I’m not confident in my ability to estimate this at all.
It doesn’t differentially help capitalize them compared to everything else though, right? (Especially since some of them are private.)
Do these options have a chance to default / are the sellers stable enough?
Default seems unlikely, unless the market moves very quickly, since anyone pursuing this strategy is likely to be very small compared to the market for the S&P 500.
(Also consider that these pay out in a scenario where the world gets much richer — in contrast to e.g. Michael Burry’s “Big Short” swaps, which paid out in a scenario where the market was way down — so you’re just skimming a little off the huge profits that others are making, rather than trying to get them to pay you at the same time they’re realizing other losses.)
It seems hard to buy AI companies at the moment. The only way is to buy tech giants like Microsoft, Google, nVidea which are already valuad very highly—seems like’s it’s somewhat priced in. It’s also not clear to me that most of the value of AI will accrue to them. I’m confused about this though.
It would seem one would want to buy Nasdaq rather than SPX? On the other hand, maybe most tech companies will be wiped out by AI—it’s the world of atoms that would gain relative value.
I’m also uncertain, and its another reason for going long a broad index instead. I would go even broader than S&P 500 if I could, but nothing else has option chains going out to 2029.