labor has an opportunity cost of $3 million per year
This seems really high. You could hire an experienced investment manager for a lot less than that. But the general structure of your analysis seems sound.
Another consideration is that you can probably reduce correlation to other altruists’ investments (I wrote about this a bit here, and I’m currently writing something more detailed). Uncorrelated investments have much higher marginal utility of returns, at least until they become popular enough that they represent a significant percentage of the altruistic portfolio. And leveraging uncorrelated investments looks particularly promising. So you could get more than a 1% excess certainty equivalent return that way.
Thanks, I look forward to your analysis of uncorrelated investments! In particular, I’ll be keen to see to what degree they rely on the same assumptions as value/momentum strategies, or if there are opportunities that are independent of that.
This seems really high. You could hire an experienced investment manager for a lot less than that. But the general structure of your analysis seems sound.
Another consideration is that you can probably reduce correlation to other altruists’ investments (I wrote about this a bit here, and I’m currently writing something more detailed). Uncorrelated investments have much higher marginal utility of returns, at least until they become popular enough that they represent a significant percentage of the altruistic portfolio. And leveraging uncorrelated investments looks particularly promising. So you could get more than a 1% excess certainty equivalent return that way.
Edit: Published Uncorrelated Investments for Altruists
Thanks, I look forward to your analysis of uncorrelated investments! In particular, I’ll be keen to see to what degree they rely on the same assumptions as value/momentum strategies, or if there are opportunities that are independent of that.