Grief is a fire sale
Written in Nov 2023.
For me, grief is often about the future. It isn’t about the loss of past times, since those were already gone. It is the loss of hope. It’s missing the last train to a friends wedding or never being able to hear another of my grandfathers sarcastic quips.
In the moment of grief, it is the feeling of disorientation between a previous expected future and what the future looks like now. I can still feel anticipation for that set of worlds, but it is almost worthless. And it is agony, a phantom limb.
One of my closest friends and I no longer talk. I don’t want to get into why, but we were friends for about 10 years and now we don’t talk. This is one of the echoing sadnesses of my life, that the decades ahead of us are gone. The jokes, the hangouts, the closeness, they won’t happen. It’s a bit like a death.
Loss comes in waves. Many times I grieved that the world I expected wasn’t going to take place. The neurons that fire to tell me to pass on an in-joke are useless, vestigial. I’ll never see their siblings again. We won’t talk about work. There was no single moment but at some point signals build and I notice how drastically the situation has shifted, that the things I’ve invested in are gone.
Grief is like a fire sale. It is the realisation that sacred goods have taken a severe price cut. And perhaps selling isn’t the right analogy here but it’s close. I was expecting to retire on that joy. But now it’s gone. The subprime mortgage crisis of the soul.
Eventually I have to offload my grief. To acknowledge reality. Sometimes I don’t want to hear that
Last year, I had a large fake money position that Sam Bankman Fried would plead guilty in his trial. I thought this because the vast majority of fraud cases end in a guilty plea. And several people I normally defer to had pointed this out. On base rates it seemed the market was too low (around 30%-50%) rather than where it ought to be (perhaps at 60% − 70%) taking into account SBF’s idiosyncratic nature, . The goods were too cheap, so I amassed a large holding of “SBF PLEAD”.
But later on I got to thinking, was I really looking at representative data. The data I had looked at was about all fraud cases. Was it true of the largest fraud cases? I began to research. This was a much muddier picture. To my recollection about half those cases didn’t plead and those that did pleaded well before the trial. Suddenly it looked like the chance of SBF pleading was perhaps 20% or less. And the market was still at approximately 50%. I wasn’t holding the golden goose. I was holding a pile of crap.
This was a good decision, but I felt stupid
That was a grief moment for me. A small moment of fear and humiliation. I had to get rid of those shares and I hoped the market didn’t tank before I did. The world as I saw it had changed and the shares I held due to my previous understanding were now worth much. And in this case it implied some sad things about my intelligence and my forecasting ability. Even in fake money, it was tough to take.
It was similar when FTX fell. I was, for me, a big SBF stan. I once said that he’d be in my top choices for king of the world (offhandedly). I wasn’t utterly blind—I had heard some bad rumours and looked into them pretty extensively, I even made a market about it. But as the crash happened, I couldn’t believe he would have defrauded the public on any scale near to the truth. I argued as much at length, to my shame1.
The day of the crash was, then, another fire sale. Near certainty to horror to fascination to grim determination. I updated hard and fast. I sold my ideological position. I wrote a piece which, early on, said FTX had likely behaved badly and was likely worth far less than before (the link shows an updated version). The response among EAs (SBF was a big EA funder) was mixed. I was accused of damaging FTXs chances of getting funding and of speaking loosely. Others messaged me privately, supporting the piece. I am told the post helped one person avoid an irrevocable life decision2 as a result. I feel good about this.
Prediction market trading for me, is a lot about humility and resignation. The hammer of reality hitting me in the face time and time again. Oh you thought you understood this? Seems not. And to me, this humility/update feels a lot like grief. There is no one to whom you can sell future decades of friendship or trust in a community figure. But there is a moment of realisation that it’s worth a lot less than you thought it was.
I feel like I am in the middle of another fire sale, this time about the OpenAI board. I write this days after Altman was fired and if you’re reading it, probably much more will have happened, but I’ll give you a recap to this point. OpenAI is one of the most powerful AI companies in the world, worth tens of billions of dollars. A few days before I wrote this, the board abruptly fired CEO Sam Altman with the implication of dishonesty, without telling their largest investor, Microsoft3. There was a large backlash and currently Altman and the board are in negotiations.
So what has plunged in value? I guess my baseline confidence that there are adults in the room. And a bit of my hope for a well-integrated AI community for the next 20 years4. There was a set of futures where I trusted OpenAI board members to be wise and hypercompetent. And there was some chance of consensus around the path forward for AI. Disagreement, sure, but some chance of trust.
Now it seems as with the FTX case, I trusted too easily. I think it would be easy to say this was just an EA or AI safety error, but I think I trust people in general too much via repuation. Perhaps some story will vindicate the board, but I predict I’ll think they acted badly5. I’m not here to argue this, I’m sure they are having a tremendously tough time. But it’s still a broad update.
There is a concrete difference between the futures I saw on Thursday and the futures I see today. And today’s seem markedly worse to me. I don’t say this with judgement, just a need to update. I thought I could trust the adults in the room. Now I think that less. I thought I had a lot more in the bank than it turns out I do. I grieve for the worlds I thought might exist. We would have been happier there, on expectation, I think. Today I feel that grief. I feel stupid and angry.
And tomorrow I will trudge through the warehouse. I will look across the remaining assets and reprice them in accordance with today’s events. Treasured opinions and are now more dubious. Work I felt confident in, perhaps not so much. Arguments that were strong are now marked for archiving. Some will happen this week. Some will happen in waves. Some will happen at inopportune moments—when I reach to ask an opinion or when I long to say “don’t worry, they have it covered”, but perhaps they never did.
But that is tomorrow. Today is the fire sale.
Crossposted from my blog: https://nathanpmyoung.substack.com/p/grief-is-a-fire-sale
Thanks for the post, I found it moving. You might want to add a timestamp at the top saying “written in Nov 2023” or something, otherwise the OpenAI board stuff is jarring