But the stocks are the more profitable and capital-efficient investment, so that’s where you see effects first on market prices (if much at all) for a given number of traders buying the investment thesis. That’s the main investment on this basis I see short timelines believers making (including me), and has in fact yielded a lot of excess returns since EAs started to identify it in the 2010s.
I don’t think anyone here is arguing against the no-trade theorem, and that’s not an argument that prices will never be swayed by anything, but that you can have a sizable amount of money invested on the AGI thesis before it sways prices. Yes, price changes don’t need to be driven by volume if no one wants to trade against. But plenty of traders not buying AGI would trade against AGI-driven valuations, e.g. against the high P/E ratios that would ensue. Rohin is saying not that the majority of investment capital that doesn’t buy AGI will sit on the sidelines but will trade against the AGI-driven bet, e.g. by selling assets at elevated P/E ratios. At the moment there is enough $ trading against AGI bets that market prices are not in line with the AGI bet valuations. I recognize that means the outside view EMH heuristic of going with the side trading more $ favors no AGI, but I think based on the object level that the contrarian view here is right.
It’s just a simple illustration that you can have correct minorities that have not yet been able to grow by profit or imitation to correct prices. And the election mispricings also occurred in uncapped crypto prediction markets (although the hassle of executing very quickly there surely deterred or delayed institutional investors), which is how some made hundreds of thousands or millions of dollars there.
But the stocks are the more profitable and capital-efficient investment, so that’s where you see effects first on market prices (if much at all) for a given number of traders buying the investment thesis. That’s the main investment on this basis I see short timelines believers making (including me), and has in fact yielded a lot of excess returns since EAs started to identify it in the 2010s.
I don’t think anyone here is arguing against the no-trade theorem, and that’s not an argument that prices will never be swayed by anything, but that you can have a sizable amount of money invested on the AGI thesis before it sways prices. Yes, price changes don’t need to be driven by volume if no one wants to trade against. But plenty of traders not buying AGI would trade against AGI-driven valuations, e.g. against the high P/E ratios that would ensue. Rohin is saying not that the majority of investment capital that doesn’t buy AGI will sit on the sidelines but will trade against the AGI-driven bet, e.g. by selling assets at elevated P/E ratios. At the moment there is enough $ trading against AGI bets that market prices are not in line with the AGI bet valuations. I recognize that means the outside view EMH heuristic of going with the side trading more $ favors no AGI, but I think based on the object level that the contrarian view here is right.
It’s just a simple illustration that you can have correct minorities that have not yet been able to grow by profit or imitation to correct prices. And the election mispricings also occurred in uncapped crypto prediction markets (although the hassle of executing very quickly there surely deterred or delayed institutional investors), which is how some made hundreds of thousands or millions of dollars there.