To me, the assumptions around the issue of risk of loss seem quite optimistic for a couple of reasons:
From accounting for the fact that not only existential catastrophes but also catastrophic risk could cause expropriation you double the rate from 0.1% to 0.2%. But the universe of scenarios where existential catastrophe is avoided but there is enough destabilization vis-a-vis status quo to drive expropriation (or other ways in which the investment becomes unusuable) seems much larger than on the same order as existential catastrophes (which the mere doubling implies).
It is unclear to me how the exit-rate of non-profits is a relevant reference class here given a lot of the risk is not on the unit-level but on the systemic level, so things like economic upheavals / hyperinflation etc. seem a relevant consideration (e.g. “how many non-profit investors survived the Great Depression with their assets intact?”)
As you write, property rights seem stable now, but that—in its current level of stability more or less globally—is a relatively new development and not necessarily a given.
From these considerations, 1% seems like a realistic guess, but it seems—at least to me—unlikely to be conservative in the sense of “with high likelihood being pessimistically biased against the argument”.
A related “windows of wisdom” argument would be that ability to act in the future might be especially valuable in times where expropriation takes place / there is a certain turmoil, so investing in non-financial assets that do not require the current market order to persist could be relatively more valuable from that angle.
Thanks for writing this, this is fascinating!
To me, the assumptions around the issue of risk of loss seem quite optimistic for a couple of reasons:
From accounting for the fact that not only existential catastrophes but also catastrophic risk could cause expropriation you double the rate from 0.1% to 0.2%. But the universe of scenarios where existential catastrophe is avoided but there is enough destabilization vis-a-vis status quo to drive expropriation (or other ways in which the investment becomes unusuable) seems much larger than on the same order as existential catastrophes (which the mere doubling implies).
It is unclear to me how the exit-rate of non-profits is a relevant reference class here given a lot of the risk is not on the unit-level but on the systemic level, so things like economic upheavals / hyperinflation etc. seem a relevant consideration (e.g. “how many non-profit investors survived the Great Depression with their assets intact?”)
As you write, property rights seem stable now, but that—in its current level of stability more or less globally—is a relatively new development and not necessarily a given.
From these considerations, 1% seems like a realistic guess, but it seems—at least to me—unlikely to be conservative in the sense of “with high likelihood being pessimistically biased against the argument”.
A related “windows of wisdom” argument would be that ability to act in the future might be especially valuable in times where expropriation takes place / there is a certain turmoil, so investing in non-financial assets that do not require the current market order to persist could be relatively more valuable from that angle.
Thanks! I largely agree with your comment on the risk of loss and have incorporated it into the new model.