I wonder if the word “Precipice” relates to Toby Ord’s book and the publicity around it, and following advocacy work by for example Longview? We know there has been impact of the book at the UN at the highest level.
The Elders also present a different demographic and it is good to see.
Great point. And also for organisations with international presence to be careful with exchange rate risks and match currency holdings with expected currency expenses unless there are good reasons not to, sounds really basic but I have seen this overlooked even with large well run organisations.
Having been a hedge fund manager and supporter of EA for many years I think this is really good write up including legal and practical considerations. I think there is no easy solution except working hard to diversify the donor base, and perhaps for EA orgs not to take on even more correlated risks unless there are very good reasons to do so.
I think the case of OP and SBF are very different.Alameda was set up with a lot of help from EA and expected to donate a lot if not most to EA causes. Whereas Dustin made his wealth without help from EA.
Hi Gideon, do you mean me? I have very very little detailed knowledge of xrisk and do not believe my risk management expertise would be relevant. But happy to chat. May be you can pm me?
I empathise with this from my own experience having been quite actively involved in EA for 10 years and within my own area of expertise which is finance and investment, risk management and to a lesser extent governance ( as a senior partner and risk committee member of one the largest hedge fund in Europe), that sometimes we ignore ‘experts’ over people who are more value aligned.
It doesn’t mean I believe we should always defer to ‘experts’. Sometimes a fresh perspective is useful to explore and maximise potential upside , but sometimes ‘experts’ are useful in minimising downside risks that people with less experience may not be aware of, and also save time and effort in reinventing existing best practises upon which improvements could be made.
I guess it is a balance between the two which varies with the context, but more likely perhaps in areas such as operation, legal and compliance, financial risk management and probably others.
How much professional advice on the cost and resource requirements on refurbishing and maintaining the property did Owen obtain? I note this is a Grade 1 listed building.
This is quite interesting and reminds me of a short option position as a previous hedge fund manager - you earn time decay or option premium when things are going well or stable, and then once in a while you take a big hit (and a lot of of people/orgs do not survive the hit). This is not a strategy I follow from a risk adjusted return point of view on a longer term perspective. I would not like to be short put option but rather be long call option and try to minimise my time decay or option premium. The latter is more work and time consuming but I have managed to construct very large option structured positions with almost no time decay as a hedge fund manager. In EA terms some of the ways I would like to structure long call options on EA whilst minimising risks would be look for strong founders and team, neglected with large convex upside, tractable and cost effective even with base case delivery (GWWC, Founders Pledge and Longview were good examples of this), and continue to fund promising ones until other funders come in.
As a general observation I think EA overemphasise expected return and not enough on risk adjusted return, especially when in some cases some sensible risk management can reduce risk a lot without reducing expected return much. (eg ensuring we have experienced operational, legal, regulatory and risk management expertises). This may have something to do with our very long impact time horizons and EAs preference to work things out from base.
I also like to emphasise that it does not always have to be bad actors, but could also be people acting outside their level of expertise and/or competence in good faith. And trust perhaps like market cycles can be oversupplied at times and in certain areas and under supplied at other times and areas.
I agree and I am also concerned about this. I have witnessed this many times. I do think there are tremendous merits in vigorously thinking from first principal on some subject matters. But others such as risk management and regulation for example do require experise as we have now seen in the case of FTX.
Sad to hear this Max but also so glad to hear you are looking after your mental health. I think you did a great job building CEA in the last few years with a great team and consistent execution.