Are you talking about individuals who are EA, or funds?
Mainly funds, but also individuals (especially wealthy individuals)
Imagine we were coordinating among everyone doing patient philanthropy (patient philanthropy being any situation where you keep wealth instead of liquidating it and giving it away to the current best opportunity that can use the money) and then optimising the overall portfolio. We’re asking the question: In what ways would we choose a different portfolio? I’m just explaining one of the considerations which is the diminishing marginal utility of the whole pool.
[...] bonus points if they can get (legal or informal) commitments from the donors. And then maybe use this information to hedge against individual donors who they believe are making irrational trades, or else are too far out on the risk curve. (Then again should funds devoted to EA have the authority to decide this top-down, or is delegating these choices to donors better?)
I agree, this is exactly what I’m looking for from these comments! This is a pretty reasonable way that we can coordinate on the overall portfolio.
For anyone reading, here’s how this would work. Let’s say Fund X thinks Rich Individual Y is overly bullish on crypto, and that Fund X’s inside view is that EA should only be 20% invested in crypto. Fund X, instead of investing 20% of their funds in crypto, might want to put all their money in other investments instead, to bring the overall EA portfolio closer to 20%.
In general, if people reveal their donation intentions and investment portfolios, we can do a better job hedging against each other to optimise the overall portfolio.
Also, if we come up with a diminishing marginal returns curve, people can judge the optimality of a given portfolio better. @AppliedDivinityStudies has posted a link and thoughts on this part of the discussion.
“[...] afaik EA Funds doesn’t invest their money at all”
Wow—This seems pretty bad, unless in practice all their holding are temporary (ie. They go down to approximately $0 more than once a year). I’m pretty that the optimal portfolio doesn’t include much cash, given that cash appreciates in real value at the wonderful interest rate of negative 2-3% (negative 6% last year?)
Mainly funds, but also individuals (especially wealthy individuals)
Imagine we were coordinating among everyone doing patient philanthropy (patient philanthropy being any situation where you keep wealth instead of liquidating it and giving it away to the current best opportunity that can use the money) and then optimising the overall portfolio. We’re asking the question: In what ways would we choose a different portfolio? I’m just explaining one of the considerations which is the diminishing marginal utility of the whole pool.
I agree, this is exactly what I’m looking for from these comments! This is a pretty reasonable way that we can coordinate on the overall portfolio.
For anyone reading, here’s how this would work. Let’s say Fund X thinks Rich Individual Y is overly bullish on crypto, and that Fund X’s inside view is that EA should only be 20% invested in crypto. Fund X, instead of investing 20% of their funds in crypto, might want to put all their money in other investments instead, to bring the overall EA portfolio closer to 20%.
In general, if people reveal their donation intentions and investment portfolios, we can do a better job hedging against each other to optimise the overall portfolio.
Also, if we come up with a diminishing marginal returns curve, people can judge the optimality of a given portfolio better. @AppliedDivinityStudies has posted a link and thoughts on this part of the discussion.
Wow—This seems pretty bad, unless in practice all their holding are temporary (ie. They go down to approximately $0 more than once a year). I’m pretty that the optimal portfolio doesn’t include much cash, given that cash appreciates in real value at the wonderful interest rate of negative 2-3% (negative 6% last year?)