In the model I’m working on, to try to weigh the main considerations, the goal is to maximize expected philanthropic impact, not to maximize expected returns. I do recommend spending more quickly than I would in a world where the goal were just to maximize expected returns. My tentative conclusion that long-term investing is a good idea already incorporates the conclusion that it will most likely just involve losing a lot of money.
That is, I argue that we’re in a world where the highest-expected-impact strategy (not just the highest-expect-return strategy) is one with a low probability of having a lot of impact and a high probability of having very little impact.
Ah, that’s interesting and the nub of a difference.
The way I see it, a ‘good’ impact function would upweight the impact of low probability downside events and, perhaps, downweight low probability upside events. Maximising the expectation of such a function would push one toward policies which more reliably produce good outcomes.
Glad you liked it!
In the model I’m working on, to try to weigh the main considerations, the goal is to maximize expected philanthropic impact, not to maximize expected returns. I do recommend spending more quickly than I would in a world where the goal were just to maximize expected returns. My tentative conclusion that long-term investing is a good idea already incorporates the conclusion that it will most likely just involve losing a lot of money.
That is, I argue that we’re in a world where the highest-expected-impact strategy (not just the highest-expect-return strategy) is one with a low probability of having a lot of impact and a high probability of having very little impact.
Ah, that’s interesting and the nub of a difference.
The way I see it, a ‘good’ impact function would upweight the impact of low probability downside events and, perhaps, downweight low probability upside events. Maximising the expectation of such a function would push one toward policies which more reliably produce good outcomes.