Comment author: rohinmshah  (EA Profile) 14 July 2017 05:30:26AM 2 points [-]

Is Antigravity Investments less of an inconvenience than Wealthfront or Betterment?

(I agree that roboadvisors are better than manual investing because they reduce trivial inconveniences, if that's what you were saying. But I think the major part of this question is why not be a for-profit roboadvisor and then donate the profits.)

Comment author: Brendon_Wong 14 July 2017 10:13:13PM *  0 points [-]

Other EAs in finance have noted trustworthy people and good evidence-based advice is hard to come by, there are EA specific considerations for investing, and quality people/firms often extract a lot of the value for themselves. This could make high quality EA financial advice and investment management a non-trivial inconvenience. Betterment and Wealthfront cover a fraction of financial services—basic passive investing—and while they're cheap, their performance is subpar, very much so compared to our passive and active strategies and passive strategies in general. High quality investment management is hard to get. For someone looking to donate appreciated securities with Betterment/Wealthfront they're probably out of luck.

Comment author: joshjacobson  (EA Profile) 11 July 2017 04:06:02AM 1 point [-]

What's the range for amounts of money that are most appropriate for you to manage?

Comment author: Brendon_Wong 11 July 2017 07:20:41AM *  2 points [-]

We don't really have a minimum, and this is made easier because automation allows us to easily scale across many client accounts. Robo-advisors have scaled with billions of dollars in ETFs so I'd say the theoretical maximum is fairly high. I'd say a good minimum is $1,000 for U.S. clients in order to generate a diversified portfolio and $10,000 for international clients because of Interactive Brokers' account minimum (only $3,000 for those under 25). We're actively exploring partnerships with additional brokers and looking into features such as fractional share investing. I believe that we're well suited to manage accounts that are in the tens of thousands to millions of dollars range. At that level all of the strategies we have can scale and for accounts with trading commissions, trading commissions become negligible.

Comment author: gustafsonja 10 July 2017 03:44:55PM 1 point [-]

Most of the performance graphs in the offerings document have 10 years of data or less, and none of them have more than 14. I'm concerned that this analysis is overfitting.

Comment author: Brendon_Wong 10 July 2017 07:07:25PM *  3 points [-]

The strategies presented in the document utilize low-fee index ETFs. Most ETFs were not around more than 10 years ago, and we decided on 2007 as a rough starting point for when to start backtests seeing as critical ETFs began to exist around that time. Our backtester also currently incorporates data from the last 15 years. That is why all of the performance graphs with the exception of one strategy have roughly 10.5 years of historical data.

I'm not sure if longer backtest periods substantially reduce the risk of overfitting, but developing and optimizing over a specific in-sample period and doing significant out-of-sample testing certainly helps, and that is part of our testing and development process. We have examined performance over longer timeframes with other tools, but exporting the data from third-party tools, merging backtest results made with mutual funds with backtest results made with ETFs, considering commissions, slippage, and unreliable data, transferring it to Excel and generating graphs, integrating it into the offerings document, and figuring out how to compare annual returns and other performance metrics with different backtest periods on the offerings document and website turned out to be quite a headache so I decided to delay displaying longer term backtests in a public facing format until we can much more easily generate graphs and performance metrics through the web app which is what we are currently working on.

There is also a segment in the FAQ titled "Antigravity Investments' performance returns seem too good to be true, and past performance isn't necessarily indicative of future returns. What should my expectations be for future strategy performance?" which briefly touches on strategy development.

Comment author: Sanjay 10 July 2017 04:13:49PM *  9 points [-]

Thanks for this post, I used to work for a strategy consultancy that specialised in this sort of area, so I'm quite interested in this.

You state your value-add comes from (a) reducing fees to zero (b) tax-efficiency (e.g. donations of appreciated securities) (c) higher-performing investment strategies

I'm interested to know whether Antigravity investments is really needed when EAs have the option of using the existing investment advice that's out there. In particular:

-- (a) you also ask if people are willing to fund you. Does this mean that an alternative model for you would be to charge your clients and then allow your funders to donate to high-impact charities? If so, doesn't that mean that the zero-cost element of your model isn't actually a big advantage after all? (not meaning to be critical, I just don't know enough about your funding model)

-- (b) is it fair to say that donations of appreciated securities is a well-known phenomenon in tax-efficient donating, and anyone getting any kind of half-decent advice would get this anyway?

-- (c) (I understand you provide no guarantees) How many years of past performance do you have? Would you agree that in general, if a fund manager of any non-passive sort (smart beta or outright active) has a strong first few years, it's much more likely to be luck than an underlying advantage?

Sorry if the questions sounds sceptical, I'm conscious that I don't understand all the details about how you work.

Comment author: Brendon_Wong 10 July 2017 06:45:34PM 2 points [-]

Thanks for your comment, those are great questions!

A. In our current plan, profits should come from outside the EA community with our general market and nonprofit offerings, allowing us to provide investing services to EAs for free, so we are not decreasing funding for other high impact organizations. That's how the EA-directed hedge fund we are in contact with is offering their investing strategies for free to EAs as well; 100% of their revenue comes from charging non-charitable clients. The funding part was regarding funders that wanted to have a charitable impact by increasing our speed of growth and probability of success in our initial stages of development. We do not strictly require funding to get started as evidenced by the fact that we're already managing capital and providing EAs with advising services. The code we've written should continue to work with minimal maintenance for at least several years. Funding would certainly be helpful in covering expenses at first, such as access to better curated academic research. The best case scenario is that funding allows us to scale rapidly and significantly help the broader charitable sector as well as generate funds to donate, and the worst case is that the funding does not help with scalability that much and EAs get free investment management at a higher level of development (at the cost of missing other funding opportunities as you mentioned).

B. Automated advisors like Betterment and Wealthfront don't provide any sort of support when it comes to donating appreciated securities. A wealth manager charging high fees in exchange for personalized attention might be able to offer this service but that's probably not accessible for too many people. We are exploring the possibility of offering donor advised fund services with Rethink Charity and are in active talks with another nonprofit, and that could cleanly integrate with the donation of appreciated securities from our investment platform. We can build in features that select optimal securities to donate at any given time and report tax saving metrics to donors.

C. We have live trading performance since December 2016, and the length of time since strategy development depends on the strategy. For instance the Swensen portfolio has been around since 2005, whereas the more recent allocative and systematic strategies have roughly 2 years of performance since creation. I think that there is a greater possibility of luck playing a significant role with traditional human investment management whereas with rules-based investing strategies one can assess the strategy in much greater detail and accuracy (for instance by testing across international markets and timeframes if applicable) instead of purely assessing performance after inception.

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Introducing Antigravity Investments: Free Investment Management for the EA Community

Introduction Antigravity Investments  is an EA  social enterprise  with the charitable mission of substantially increasing funding for high impact causes by providing free, high quality financial advising and investment management services to the EA community through our own services and those of other EAs in finance. By increasing the investment... Read More
Comment author: Gleb_T  (EA Profile) 20 March 2016 05:06:10PM 1 point [-]

Thanks so much for your supportive words about the accomplishments thread, Brendon!

I think there's a trade-off between giving now and giving later. If you give now, then the social benefits will be a form of compound interest. For instance, if you give to AMF now, rather than later, they will save lives sooner, and you will have created more benefits in the world. So it would be a matter of calculating the trade-offs and comparing the compounded interest in dollars vs. in social good. Hard balance to make, and I'd be excited for someone to calculate this!

Comment author: Brendon_Wong 20 March 2016 09:12:41PM 0 points [-]

Also technical comment, I'm new to the forum and I didn't get emailed with your comment reply or see any kind of notification, is that normal? Is there a way to get notified?

Comment author: Gleb_T  (EA Profile) 20 March 2016 05:06:10PM 1 point [-]

Thanks so much for your supportive words about the accomplishments thread, Brendon!

I think there's a trade-off between giving now and giving later. If you give now, then the social benefits will be a form of compound interest. For instance, if you give to AMF now, rather than later, they will save lives sooner, and you will have created more benefits in the world. So it would be a matter of calculating the trade-offs and comparing the compounded interest in dollars vs. in social good. Hard balance to make, and I'd be excited for someone to calculate this!

Comment author: Brendon_Wong 20 March 2016 09:07:57PM *  0 points [-]

Thanks for the input! Yeah I'd also be interested in the difference in impact between the two approaches, and I might post more on it in the next few days or weeks so hopefully that provokes some deep thinking on the matter.

Responding to your point on compounding societal interest, if I give $1,000 now then 1 life could be saved now, But if I wait, invest, and give $2,000 7 years later, 2 lives could be saved. How does saving 1 life 7 years earlier lead to compounding benefits? Sure that 1 person now gets to live, but if I waited to donate, than 2 people who otherwise might not have been saved would have been saved right? More net good by waiting, as long as people remain to be saved (and unless utopia is imminent I think there will still be life saving opportunities for effective charities at least in the next few years if not for the foreseeable future). I think I need help seeing the social good compounding effect.

Also an argument could be made that EA charities will become even more effective in the future, another argument to delay donating.

Comment author: Gleb_T  (EA Profile) 06 March 2016 10:36:22PM 15 points [-]

So here's what I did recently:

1) As leader of Intentional Insights, I have been collaborating with The Life You Can Save and the Local Effective Altruism Network to spread Giving Games to a secular audience. GGs are workshop-style events promoting EA-style effective giving. Intentional Insights has the connections with secular groups and ways of adapting GGs to their needs, while TLYCS provides both funding and facilitators, and LEAN provides facilitators. We have had some good concrete outcomes of that project. I wrote and published an article for a prominent secular organization, United Coalition of Reason, on Giving Games, and their Board of Directors has approved a UCOR-adapted packet and put it up on their resources page. TLYCS and LEAN facilitators are now going to reach out to the hundreds of COR-affiliated secular groups in the US and Canada to start hosting GGs for them.

2) I published an introductory article on effective giving targeted at EAs to help them optimize their giving strategies. It was cross-posted on TLYCS, InIn, and the EA Forum.

3) I published a thought piece on the EA Forum providing some ideas on the value of different participants within EA.

4) I published an article encouraging people to donate their Valentine's Day gifts to effective charities in the 16th largest newspaper in the US, whose Sunday edition (the only one that published op-eds) reaching over 424K and having 5 million monthly visitors.

Overall a good month, I think.

Comment author: Brendon_Wong 20 March 2016 07:45:45AM 2 points [-]

Thanks for creating this accomplishments open thread Gleb, I think it's a great idea for this forum and the EA community at large!

I read your intro article on effective giving just now; it's a great start! What do you think about investing planned donations and taking advantage of compound interest, even if just for several years, to increase total giving power?

Comment author: Gleb_T  (EA Profile) 25 February 2016 11:59:15PM 1 point [-]

one in ten startups fail

You probably meant nine in ten startups fail.

Comment author: Brendon_Wong 26 February 2016 03:14:30AM 1 point [-]

Thanks for the catch! Post edited.

Comment author: Brendon_Wong 25 February 2016 06:34:30AM *  4 points [-]

While it may be implied, I don't get the feeling from reading this article that it supports the idea of simultaneously working towards career goals the traditional way and launching projects at the same time. If it does, please disregard the following paragraph. Instead, it feels like the article is recommending young people to "try to tackle G and [take on the high risk of failure, even repeated failure]."

To counter the idea of dedicating one's early life entirely to project launching, I would like to note that this strategy may not suit the vast majority of people, especially not in the age group that the Pareto Fellowship is targeting. Students usually have no career capital and no funding. That leaves them with no specialized skills or startup funds to launch and follow through with a project, and if the project fails or does not generate enough revenue for financial stability, the young person's strategy also results in no fallback plan besides potentially taking a low-paid starting position and living at home if a project fails and they have lost their degree by dropping out to pursue a project full-time. Even older individuals frequently cannot generate the funds necessary to pursue a project full time, let alone sustain it and recover if the project does not succeed, especially with obligations like childcare and saving for retirement. I agree that I will not be killed off if a project fails, but the risks and uncertainty are simply too high to devote 100% of my resources to pursue something so uncertain. I'll note the oft-cited statistic that nine in ten startups fail. Probably because of the high risk of failure with the project and in achieving future career goals, 80000 Hours does not seem to recommend serial entrepreneurship to most young people looking at potential future careers.

As one of the Pareto hopefuls, and one who's "G" may have been alluded to in the article, I'd like to point out that I am currently following the dual-strategy of launching projects (including my G) and simultaneously working towards generating income and building career capital. I believe that this strategy is far superior to dedicating 100% of resources and time towards early-life project launching because it gives people the necessary background and benefits to launching and managing projects while also overcoming the inherent risk of losing everything. Also, Oliver Habryka and many other EA's I've met appear to be implementing my "dual strategy" as well. I suggest that the article suggest this dual strategy as an alternative, or the preferred alternative, to 100% early-life project launching, or clarify that this is the idea the article meant to convey.

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