Okay, but can you explain why it would beat maximise expected returns?
Here’s the thought: maximise expected returns gives me more money than mission hedging. That extra money is a pro tanto reason to think the former is better.
However, mission hedging seems to have advantages, such as in shareholder activism: if evil company X makes money, I will have more cash to undermine it, and other shareholders will know this, thus suppressing X’s value. This is a pro tanto reason to favour mission hedging.
How should I think about weighing these pro tanto reasons against one another to establish the best strategy? Apologies if I’ve missed something here, thinking this way is new to me.
Thanks for asking for clarification—I’m sorry I think I’ve been unclear about the mechanism. It’s not really about shareholder activism, this is just an extra.
I’ve now added a few graphs and a spreadsheet as a toy model of why mission hedging beats a strategy that maximizes financial returns in the introduction. Can you take a look and see whether it’s more clear now? Or maybe I’m missing your question.
Okay, but can you explain why it would beat maximise expected returns?
Here’s the thought: maximise expected returns gives me more money than mission hedging. That extra money is a pro tanto reason to think the former is better.
However, mission hedging seems to have advantages, such as in shareholder activism: if evil company X makes money, I will have more cash to undermine it, and other shareholders will know this, thus suppressing X’s value. This is a pro tanto reason to favour mission hedging.
How should I think about weighing these pro tanto reasons against one another to establish the best strategy? Apologies if I’ve missed something here, thinking this way is new to me.
Thanks for asking for clarification—I’m sorry I think I’ve been unclear about the mechanism. It’s not really about shareholder activism, this is just an extra.
I’ve now added a few graphs and a spreadsheet as a toy model of why mission hedging beats a strategy that maximizes financial returns in the introduction. Can you take a look and see whether it’s more clear now? Or maybe I’m missing your question.