I recommend disengaging from conversations that are about virtue and affiliation - who is hypocritical, who is a threat, who is a coward, who is a dumb idiot, and so on. In my experience the vast majority of misery that comes from involvement in the, uh, “politics fandom” comes from this, and I’ve gotten happier as I’ve worked to not engage in it and miserable when I’ve lapsed.
Weird opinions on policy questions and the like is fine, and unrelatedly someone needs to have them for us to find new good policies, but you have to work on cutting out toxoplasma. Hate is the mind-killer, even, or especially, hate that would seem to be justified.
If people depend on you for their sustenance (spouse kids etc) and you work in a field where people cancel each other, then I’d probably dial it back.
My experience here is basically I have a good life and career that got kinda sorta jeopardized once by some of my opinions. Nothing huge but the writing was on the wall. I had to evaluate how much these opinions about “shit that doesn’t put food on my table” actually matters.
A few hard questions for you to answer:
1- are your opinions that unique? Is it possible to enjoy the company of a community that shares some of your opinions and advance your contributions to society on some other axis than being a public contrarian?
2 - what’s the upside of broadly sharing unpopular opinions? Of course it is your right but if there’s little upside and lots of downside then...
3 - in the case that you feel this is your duty or calling, are you sure you aren’t confusing your civic/humanitarian duty with the emotionally engaging pastime of talking shit as a form of entertainment?
4- are you prepared for this endeavor to succeed and have your life picked apart by haters?
You seem uncertain about your goals. Are you looking for:
- expressing your ideas and getting feedback on them
- more social interaction, making friends and so on
- finding activities that aren't "wasteful"
Whatever time you already spent thinking about politics is a sunk cost. Possibly, it might be useful someday, but probably not in any direct way.
With respect to getting feedback on your ideas, I don't think YouTube makes much sense? It's more work and higher risk. You might learn more posting pseudonymously if you can find the right forum.
I'm curious why you can't just be a weirdo into esoteric things? From what you wrote, it seems more like you want validation or acceptance into a group of people than to do anything exactly. I often feel similar, but I've come to accept I'm just the weird one with mix-match opinions. Nothing wrong with being eccentric.
I would suggest seeing if you might not find either an advocacy group with narrowly targeted goals if you have specific political-ish passions. Or perhaps local government. City commissions and small local non-profit boards are often easy to get on to, and they let you affect your local community. You could also seek out places that encourage heterodox thinkers.
Think through your security situation. If you do what you are thinking of and get de-anonymized, what are the risks? How can you mitigate those risks? I'm thinking of Bruce Schneier's list of questions, from "Beyond Fear."
Step 1: What assets are you trying to protect?
Step 2: What are the risks against these assets?
Step 3: How well does the security solution mitigate the risks?
Step 4: What other risks does the security solution cause?
Step 5: What trade-offs does the security solution require?
If you become the target of an internet hate mob, it'll be terrible. It'll be terrible regardless. But if you're in a situation where the haters can't really jeopardize your income source, you'll be a lot better off.
It is not wasted time if you enjoyed researching the questions. And there is absolutely nothing wrong with being a weirdo. My peer group hasn't stopped hanging out with me just because I spend a lot of weirdness points on wacky ideas, in fact they sometimes ask for my input on things (sometimes even in a non-joke way).
This "I must change something" idea just seems premature to me. Do you have any other reasons for wanting to change things (e.g. you have information with important ethical implications)? Break your 'Ugh field' and REALLY think about it.
The correct solution, if you are capable of it, is to learn what normal people believe, and get good at telling them things from your own beliefs that are only one inferential step away from that, and framed in their own language and terminology.
If you do this properly, you will seem interesting and insightful, and people will be interested in coming to you for your take on things. It can be a big help to your career and social life.
However, it takes being really, really focused on modeling the other person's thoughts and knowledge and thinking about how what you say will interact with that and what the result will be, rather than being focused on talking about your own cool ideas and showing how much you know. If you aren't both dedicated to and competent at doing that, it won't work.
This is a very useful answer (I'm a little sad I can't signal boost it with a ❤️!)
You could imagine a grid of opinions, with one axis being "irritating to likeable" and another axis being "unhelpful to useful."
It's not noteworthy to generate unhelpful irritating takes, nor very useful to generate likeable pablum that everyone nods along to without actually being helpful. What about true novel takes that nobody will believe?
Maybe there's a third axis that's key here. A good contrarian needs to have ideas that are novel, helpful, and just approachable enough.
Either way you want to find that sweet spot in the upper right quadrant, or high top right octant, and that multi-variable function is why finding a great contrarian is so damn hard. You can't just say things people think are crazy but happen to be secretly right, that's probably not even half of the work.
There might some other axis to maximize, being able to frame and package and communicate your opinions well is critical too.
Hitchens' Letters to a Young Contrarian is on the whole a pretty good book to encourage you not to abandon the contrarian spirit, but to get better at doing it in an actually convincing way.
But insofar as that is teaching you the importance of contrarianism, and you already know that, you might want to settle in to the tradesman-like skill building of forcing yourself to go to toastmasters or some sort of clubs or activities that praise you specifically for honing your abilities at communication.
That's why I got into nerding out about alcohol. I could use that to relate to normal people and was particularly useful in business settings.
I also joined a discord with that share similar weird (and accept other weird) ideas about political/social issues. And strangely enough, most of the active posters share my same first name.... The discord is one structured around a podcaster that shares roughly similar ideas and openness, but I'm primarily there for the community more than the podcaster (even though I like the podcaster).
I too have Controversial Opinions™*, but I'm a math nerd and I spend a large proportion of my time socializing with other math nerds. I think that the math community generally doesn't cancel people, so I feel safe there. I.e. I've taken the first option as cancellation insurance.
Options (2) and (3) sound great from an individual perspective but are probably not sustainable in the long run and also contribute nothing to the world, so probably rule them out for a life plan. Option (4) sounds possibly feasible as a life plan, but I think that in order for this to be cancellation-proof you're going to have to be rich enough to have "FU money" like Elon Musk or whatever.
*Hopefully this isn't a real trademark. If it is, sorry.
I like this. You might enjoy the recent documentary "Boys State" - teenagers are sorted randomly into fake parties and tasked with coming up with political platforms after the fact.
An associate of mine went to this program several years ago. His party couldn't agree on a platform, and so he convinced a group to splinter off and form a terrorist cell that engaged in guerilla warfare against the nascent government. I can't remember if they successfully staged a coup.
So, uh, watch out for that when assigning manifestos.
So, low does this work? the Democrats write the manifestos and then the Republicans get to decide whether to campaign for UBI and $15 min wage or reinstate slavery and patriarchy? Or the Republicans write them, and the Democrats get to choose between support for gun ownership and school choice or nationalizing industry to inaugurate strict central planning, with mandatory re-education of all white males?
Interesting idea, but I'm not sure how this would replicate the "divide" step of divide and choose. What's to stop a party from writing two identical manifestos that capture their preferred policy positions?
And, for that matter, what would stop a party from completely ignoring its assigned manifesto?
(1) Crimson Lake Party writes manifesto: "If elected, we will slash taxes by 20%" Automatic negation manifesto: "If elected, we will increase taxes by 20%"
(2) Gamboge Party: "Oh, thanks very much, we'll take the tax-slashing manifesto!" and Crimson Lake Party gets the tax-increase manifesto
(3) Voters don't want a 20% tax hike, so they vote the Gamboge Party into power
End result: whichever party writes the manifestoes is going to do the most milk-and-water, 'status quo all the way' manifesto so the opposition will have no advantage in picking one over the other and they won't be stuck with the disadvantage manifesto, resulting in both parties becoming ever more like Tweedledum and Tweedledee, since whoever gets elected is elected on a manifesto of "more of the same".
... Why wouldn't the party writing the manifestos just write the same thing (the thing the author likes) twice?
*Dividing* something that already exists and *creating* something new are very different processes. The incentive structure from one doesn't carry over to the other.
"giving the same manifesto twice is making the result of the election a coin-flip"
Elections have factors other than policy differences. My party's candidate will implement the platform with competence and integrity, and more importantly is fun to be around!
As you may know, something along these lines has been used in legal systems. In Periclean Athens, the convicted defendant in a criminal case could propose a penalty, the prosecutor could impose a penalty, and the jury chose between them.
More recently, it's used in complex arbitration. I think there are some famous examples in Baseball players union negotiations where the arbitrator asks both sides to submit a resolution so he could choose whichever he considered the most gracious and reasonable.
On top of generating generally fair results, it's also a great work-saving device for the arbitrators, so it's sort of doubly clever.
On the simple yes-no question, 45% said it could sometimes be okay/appropriate to write about companies' requests for investment, 13% said it was never okay/appropriate, and 42% weren't sure.
On the more complicated question, 45% thought that the actual investment request I included was appropriate, 21% weren't sure, and 34% thought it was inappropriate for various reasons. Of those who thought it was inappropriate, about 10% thought investment requests were never appropriate, and the other 24% thought it was inappropriate for various specific reasons.
The most commonly cited reason was that people thought it felt like a bait-and-switch where I didn't tell them the post was leading up to an investment pitch. At first I felt sort of offended by this one - I titled the post "Shilling For Big Mitochondria"! But on further reflection I guess it makes sense. I had been interested in writing about DNP for a while, hearing about this company cemented it for me, and so it was an awkward pastiche of the post I would have written anyway and a post about the company. I can see how it would be jarring to read.
Other people thought I needed to take more precautions to inform people that investing in biotech companies is very risky and really only suitable for professional investors. The company was only accepting investment from accredited investors, which I thought made this a non-issue. I'm not sure whether the people saying this didn't know that, or whether they think even accredited investors need a special warning.
Other people thought it was a conflict of interest that my friend worked at the company. I'm...not sure this is true? I learn about a lot of things through my social network, and networking is a known way of doing and learning about things.
I think in general a lot of the problem was that people thought of this as me trying to claim that this was a hot stock tip that would make $$$, whereas I was trying to present it as a basically charitable opportunity to support a company doing really exciting and possibly world-changing research. If I was claiming it was a hot stock tip, then having a friend working there might be distorting my stock-evaluation ability. If it's just a cool opportunity to help with research, then...I'm not sure. This blog is fun, but it's only going to be actually worth our time if it helps change the world for the better. That's a tough order for a blog, and one of the few ways I can imagine it happening is if it helps connect people who can get involved in important institutions like charities, research programs - and yes, - companies - in ways that help them grow.
I have no ability to give people hot stock tips that will make them money, and in general you should assume I'm not doing this. But I know lots of amazing people trying to change the world who deserve more support than they're getting, and I'd like to be able signal-boost this when I think it's valuable.
My current plan is that if I ever do anything like this again, I'll do it on a Classified Thread (remember those?) where it won't feel out of place to anyone, and I'll specify that I have no reason to think it will make anybody any money. Also, please don't ask me to pitch your business; there is basically no chance it will work but it will make things awkward.
I'm having trouble understanding why you think this is a charitable opportunity. You know about effective altruism, if you are seriously making the claim that investing in this biotech startup will do more good than giving the money to an EA charity, you will need to provide a mountain of evidence for that claim. I want to preserve and grow my wealth with my Investment Money, and do the most good with my Charity Money. I don't think mixing the two objectives is a good idea.
Can you explain your preference for keeping a hard line between investing and charity? It’s not obvious to me that utilitarian accounting would preclude investments that have both direct returns and positive externalities.
If he's motivated to get investors to give it money independent of whether it would be a good deal for the investor, ehe has a conflict of interest. "I really think it would be good for the world if this organization got a lot of money" may be a more noble reason than "it's run by my brother and I want him to get richer", but it's still a reason that distorts one's judgment.
If that is a conflict of interest, how is any discussion of anything Scott approved of not a conflict of interest? Mentioning something you heard on the news because you think it's a positive development is a conflict of interest by this logic. I can't see how any discussion of companies or technologies would not be a conflict of interest, if you are defining interest as simply approving of the proposed outcome!
I think you're confusing conflict of interest, where potential personal gain means you should not declare an opinion, which is a pretty-clearly defined concept, with having an interest in the company, which is healthy and part of how we want the economy to work. That Scott has a friend whose work is interesting enough to him to suggest it is worth supporting is no more contentious than me saying I believe we should all stop an listen to the birds for five minutes every day, and Scott's statement is probably rationally a more useful thing to do.
I'd class this as a case of rigour over-zealously applied, and hopefully not an example of the sometimes-observed distaste for commerce, although if the latter at least with got a thematic link to the recent posts on class I suppose...
It's a conflict of interest only if you assume that the goal of an investment can only be return. If the people recommended to are also interested in making the world better, then this is not a conflict of interest but just "an interest". It's the same interest, is my point.
Such a company would either trade the positive externalities for more money at the first opportunity, or would be outcompeted by more unethical companies and lose the ability to do good or make money. Moloch doesn't allow you to serve two masters.
It seems like you’re assuming a company can capture all of the value it creates. If it can’t, there are positive externalities. Competition can even reduce the ability to capture value (eg by driving prices down).
That’s a good way of addressing the deductive point.
And inductively, there are companies whose products and services make the world better. Therefore shouldn’t supporting a company like that who isn’t well known be a priority for an Effective Altruist?
A for-profit company is already trading the positive externalities for more money. That's how it makes money. There are 3 things you're forgetting:
1. You're assuming that charities are as efficient as for-profit companies are at spending money to increase human welfare. But for-profit companies get paid more to increase human welfare more, while charities don't. This is why for-profit companies are free to spend their money in ways that will eventually increase welfare a lot (e.g., creating Google, ), whereas charities are constrained to spend their money in ways that appear, to the average donator, to increase welfare right now (e.g., buying solar power panels for African villages), or to decrease total welfare in redistributing it to someone especially pitiable (e.g., the Make-a-Wish foundation, average cost $10K/wish).
I could write a long rant about my experiences in startups and government contracting, in which I learned that, when people are given a lot of someone else's money to spend, even if they have the best of intentions, they spend it in useless ways because they don't have the only metric (market value) that tells you how valuable something you're doing really is to people. The waste that results from not having paying customers to keep you in line is astounding.
2. When you invest in a company, you're not losing the money; you can sell the stock once the company has a firm financial footing, and give those proceeds to charity. Even if you make the assumption in #1, giving to charity and investing in a for-profit should come out about even in altruistic utilon generation.
3. "Moloch" is really bad anthropomorphizing which focuses entirely on the negative, personifies it, and attributes it with agency, thus encouraging people to think of free markets and of freedom as evil instead of as good, and to seek agents of Moloch to slay. It's Marxist mythology which has crept into the rationalist community (via Scott, I'm afraid).
Bear in mind that serious EAs have thought *a lot* about this stuff, and have virtually always landed on charity not for profit enterprises. And these are the same people who have also landed on 'generally, political activism is suboptimal' 'worry about AI risk' and 'working for big companies and give your money away is an excellent path to doing good', so I don't think this just a fear of non-leftist/libertarian/unusual conclusions.
There's a large difference between "the most-effective utilon generator is usually a non-profit" and "theoretically, no for-profit company can ever be as efficient as any non-profit company".
Why is it that not to long ago in the US poor people starved to death sometimes, and now they are fat? Is it because people give more to charity than they did then? No. It's because of improvements in technology (or if charity is increased it is because GDP has increased, which is due to technology). So I don't see how you can say that charity is clearly superior, when history shows that investment in technology is clearly where improvements in standard of living come from.
(Er, I shouldn't have said "trading the positive externalities for money". I meant, the positives aren't externalities, because the company is paid for them.)
With either extreme I know where they stand. Either they are profit-maximisers or they are bound by the rules of registered charities. If it's in the middle then who knows where in the middle it is?
I took his use of the word charity to mean “Treat this investment as a gift without any expectation of a financial return”.
Mixing the two objectives of increasing invested wealth and doing good for humanity are very much the trend in the investment world today. And even before ESG and impact funds were a thing, the idea of “double bottom line” has been around for awhile. I think your view that these objectives should be compartmentalized is more fringe and requires evidence.
I think the view that they should be compartmentalized is simply a reversion, back from utilitarianism to subjective, spiritualist, non-materialist ethics again, which denies that morality can be quantified, and claims that "material" and "spiritual" are separate magisteria.
Right now some EA groups' recommendations is that they will use billionaire money to take care of the obvious stuff, and that individuals with more normal amounts of money should spend it on smaller opportunities that they are uniquely placed to know about which the billionaires haven't found yet. If this drug has an X% chance of ending obesity, and I'm uniquely placed to know about it because I know a person who works there, I think it counts as a potentially EA-like thing that the billionaires haven't heard about yet.
(caveat: other organizations don't say this, and it's kind of complicated because the billionaires will only fund up to half of any charity's operating budget so it's always possible to increase the amount the billionaires will donate by donating yourself. This is my impression of what a few people have told me, nothing more)
It's tangential, but this seems backwards to me. Money is fungible, but time isn't. If I donate a relatively small amount, it's not worth my while finding niche donation opportunities. I should just give the money to EA funds or the top recommendation on GiveWell, which I can assume have sufficient capacity for my donation. Whereas if I were giving away a billion pounds, it would be worth spending time identifying particular giving opportunities, which I could then fully fund.
My suspision is that the position you refer to has its root in vanity: people don't like the feeling that their donation is insigificant compared with Dustin Moskovitz. But actually, it makes no difference to the impact. There's no need to be a hipster: just do the best thing, and if other people also do the best thing, that's great!
I could see an argument that it's not worth spending time hunting for unique opportunities, but you should still take advantage of any unique opportunities that happen to fall in your lap while you are going about your life.
Though I'm not sure that holds up, because even if you hear about a unique opportunity spontaneously, there's presumably still some due-diligence investigative work you'd have to do before putting money there made sense.
Big organizations like Open Phil don't have the capacity to vet hundreds of small (<100k) grants, so they prefer to give to organizations that can absorb large amounts of money. Since there are many opportunities for grantmaking in the 5k-500k range, and since the big funders are constrained in how many organizations they can vet, an individual donor that is prepared to do their own work can plausibly find a niche topic they know well that is competitive with many of the best giving opportunities.
I make annual donations to a Children's Hospital in my town to support their ongoing research program. It is a registered charity and my donations are tax deductible. So, it is not impossible. OTOH, when I donate I donate, and when I invest, I invest.
The existing EA framework ≠ the be-all end-all EA mindset. One can be enough of a consequentialist utilitarian to agree with the EA mindset per se, but have slightly different terminal values from the EA orthodoxy to the extent that one's calculus about which charities should be prioritized will be different. For example, this might be true of a preference utilitarian who *hard* rejects the Repugnant Conclusion, and for whom guaranteeing a pleasant life to those already living is much more important relative to preventing deaths than the existing EA framework assumes.
While I understand your thought process, wouldn't it be even better to invest in companies that are making a difference?
Our feelings about electric cars or Musk aside. A company like Tesla, who's stated goal is to reduce green house gas emissions from vehicles sounds like a great place to invest for your future in both ways. You can make money, and potentially protect the environment. More so than buying your own electric car.
As another option, I've heard of investment funds that target green initiative companies (green energy and such). Again, why not make money and do what you can to protect the environment.
Maybe you're on top of this, but most of us just buy investment funds or ETFs. There's a chance that you're supporting companies that actually go against your charity donations. Nullifying or reducing your own altruistic effects (in so far as buying shares in a company tell it you're happy with what they're doing).
I'd argue that investing for change is the most Effectively Altruist way to invest. Your investments would reinforce your charity dollars.
I think I need to go double check where I'm invested.
I wonder if this is partly responsible for Tesla's stock boom, and whether institutional investors have already incorporated measures of altruism into their models. I tried googling, but was overwhelmed by results linking to stories about people who (supposedly) were entirely motivated by altruism and just ended up making lots of money, because karma.
I also wonder why we even have to talk about this. If people invest to maximize expected utility, and their utility functions include concern for other people--both of which I believe are usably correct--then it should have been obvious since the great post-Christian progressive/moral revolution of the 19th century that seemingly-altruistic companies have higher stock values than P/E-equivalent not-obviously-altruistic companies.
I doubt institutional investors have started using altruism as a metric in their models.
Firstly because they would advertise the hell out of it. It's a lot easier to forgive lower than expected returns in a fund if the argument is "but we did good too".
Secondly because we would see more investor activism on that front, and it would probably be advertised to all hell again.
I admit, I could just be missing the advertising on these funds, and socially conscious activist investors as I'm not exactly the target demographic for that news.
I wonder if billionaires could start buying up huge stakes in these companies in order to push them to pursue better long-term goals instead of just the best short term returns.
The problem is that the non-altruistic return from investing in those companies is then less than from investing in other countries, so all non-altruistic investors put their money somewhere else. Unless there are enough altruistic investors to fully fund the altruistic companies, return on investment goes back up to the market return, the companies are paying as much for capital as before so no benefit to altruistic objectives, and the altruistic investors get their altruism for free — but not really, since their investment doesn't benefit the companies.
So the altruists should either invest in companies that only altruists invest in or spent money on charity instead.
1. Empirically, when a British Petroleum oil well polluted the Caribbean, BP's stock fell far below any market-rational value, and stayed low even after the reparations that would be demanded from it became known. The simplest explanation is that the market was punishing it for harming the environment.
2. Theoretically, an omniscient, non-altruistic investor would know when a stock had added utility to altruists, and that this should be factored into its expected market value. Investors don't care about the company's returns; they care about the market value of their investment. If a bunch of altruists will value the stock higher, then the stock really has a higher market value.
On the other hand, a non-omniscient, altruistic investor who doesn't know which companies are socially helpful or harmful will act just like a non-altruistic investor.
So the difference which motivates the behavior you describe isn't between altruism and non-altruism, but between knowing and not knowing about the ways companies help and harm others. Note that in my BP example, the harm done by BP was blared across all media nonstop for weeks, so everyone knew about it, and knew everyone else knew about it.
So perhaps social benefits would affect stock price more if Wall Street culture expected reporters and analysts to talk about the social harms and benefits of companies. This doesn't even require them to /care/ about them; merely to regard them as data that's useful to some investors. Once everyone believes that social net benefits are an important factor in stock value, they'll become an important factor in stock value.
3. I shouldn't have used the word "altruism", meaning "acting to benefit others at expense to oneself". I'm thinking rather of companies whose for-profit business happens to involve making stuff I think of as especially socially helpful, like Google, or the makers of coronavirus vaccine.
However, now that I think this through, as a good free-market economist I should accept that our best estimate of the social value of the stuff made is its market value, which represents its utility to its consumers. Hence, those companies with the largest gross income are those producing the most social value (except in non-free-market cases involving monopoly, regulation, confusopoly / private information, etc.). So if my investment strategy sought to maximize social utility, the only difference would be that I'd invest in companies with high gross rather than net income. But I'd go broke, because those companies are much more likely to go out of business than companies with high net incomes. (Note this doesn't apply to the preceding discussion of companies acting in ways which are socially perceived as beneficial; only to companies which are objectively socially beneficial as measured by market prices.)
The two strategies would give similar outcomes if the altruistic good-free-market investor considers the social utility that each company will produce over the life of the company.
A mountain of evidence that investing $X in a for-profit company can produce more social utility than giving $X to any charity: Google.
Eliezer Yudkowsky wrote a post, Purchase Fuzzies and Utilons Separately, which justifies giving to charity, but (IIRC) on the basis that giving to charity may increases social utility more through the fuzzies that you personally receive from giving to charity (as fuzzies are essential to life), than through the utility produced from your money by the charity.
Google's first round of funding was $25 million, which I think they operated for a few years. It kept the Internet usable. Yahoo and Ask Jeeves had curated approaches that didn't scale; Alta Vista bogged down on trying to tackle NLP; metacrawler relied on other search engines to do a good job.
I may be overrating Google's importance in search; their main effect may have been gaining a monopoly by eliminating all other competition by the dastardly trick of patenting their PageRank search algorithm, which was so stupidly simple and obvious that you couldn't really make a decent search engine without using it.
But I use Google's free email service; their free doc service; their free spreadsheets; their free speech-to-text program. So do billions of other people. Add up the utilons there. I embrace the "repugnant conclusion".
Of course, this may all be cancelled out when they create the first AGI and conquer or destroy the world. But, until a few years ago, that didn't seem inevitable.
Scott, seriously, talk to a lawyer about this. Don't assume you can figure out what's legal and what isn't; you're very smart, but the law can be very dumb.
By involved with Substack, I mean someone who's either involved in Scott's income guarantee from Substack or directly involved in investing in the company itself.
All it takes is one casual person swinging by because they heard about this Scott Alexander person somewhere, reading about "Magic Carpets is a swizzy new startup", deciding to sell the very shirt off their back to invest in Magic Carpets, then the thing goes "ka-blooey", they lose everything, and they get angry and go to law over it.
Doesn't matter if Scott never said "Sell your shirt to invest in Magic Carpets", there are plenty of dumb smart people out there.
This reads like a fully general argument against every communicating anything to anyone. There's no real obstacle to someone suing someone else for _any reason at all_ (or even no real reason).
Reg D only applies to issuers. And it only deals with 33 Act compliance. Non-issuers need to worry about BD regulation and 40 Act compliance as well. Reg D does not help with that.
I left a comment in the survey essentially saying that accredited investors need warnings, but it was probably too short to explain well. @bunnydogwalking already posted the excellent Matt Levine column, so I'll assume you've read that.
I completely agree that there is value in signal-boosting on this blog investments that genuinely interest you because /actual/ sophisticated investors read this blog. (And because you already realize that this only works if you ignore people asking you to pitch their business.)
However, "accredited investor" does not in any way mean "sophisticated investor". Random dentists or Google SWEs or whoever should not be investing in private placements. But, I'm libertarian enough to say that they just need a warning. "Don't invest in private companies if losing $250,000 would make you lose any sleep" or whatever. (Yeah, a company could accept a small investment, but that's a red flag.)
The point isn't to cover your ass -- the point is (1) to genuinely convince dentists that the opportunity is in fact targeted at more sophisticated investors and (2) to convince people complaining about all this that it was never a problem because you were only interested in bona fide sophisticated investors in the first place. (But obviously this won't help with people who are just vaguely offended by capitalism in general and large amounts of money in particular.)
I personally did NOT get the impression that the biotech company was targeting accredited but unsophisticated investors, but due to this becoming some big thing where you're soliciting general feedback about signal-boosting investments, I'm offering general feedback.
It was I who suggested that there were legal problems with suggesting an investment opportunity in your friends company.
In my time I was accounted to be a savvy practitioner of securities law. People paid me for my advice. Some of them heeded me. Some of them didn't. One of the guys who didn't is in durance vile still.
My free advice to you was don't do it. I saw downsides and you claimed you had no upside, so the conclusion was easy.
You have a constitutional right to commit journalism, but I thought the post in question crossed the line from journalism into solicitation.
In the future, I would say that it is proper and legal to report on development stage technology, and even to say that the developer is looking for funding. But I would cut it off at that. Let the unwary use their Google fu, to find the company.
Is there a difference between saying "Acme is making exciting rockets, and by the way it is looking for funding" vs. what I did (which you seemed to think crossed the line into making an investment pitch)?
Your original post made me uncomfortable. It is lawful and proper to practice science journalism. And I thought the original post went past that. I don't want to try spec out all of the possible variations. It is tedious and it would require me to do research that I do not have the tools for or the inclination to do. If I see something that makes me uncomfortable I will say so.
Can you point to an enforcement action which contains a fact pattern analogous to Scott's blog post?
My experience with securities lawyers has been that there are a ton who have academic legal theories (and will charge you a lot of money to share those opinions with you in fancy memos!) but few who have relevant enforcement perspective and can contextualize the risk.
We can probably agree that just about every real estate deal with multiple particpants and angel deal could be some sort of Reg D violation with a broad interpretation of solicitation. The value of legal advice is contextualizing risk - not restating the law into laymen's terms.
No. I am not doing research. I don't have the tools. I don't have the time. And, it is not enough fun to do for less than $1000/hr. I am not even going to drag in my friend who was general counsel of FINRA or my other friend who was general counsel of the SEC.
I think whether or not there is a risk of enforcement cracking down on Scott, one might think that if he's doing the *sort* of thing that they could *legally* crack down on, then that might be a sign that this post is *ethically* problematic, even if it's not likely to lead to actual legal trouble. (Of course, if someone thinks the regulations are badly written, then that might be less of a significant worry.)
"Accredited investors" doesn't actually mean people with any kind of education/credentials in investing; it just means people with $200k/year income or more. Scott, you're probably an accredited investor.
So yes, I do think that "even" accredited investors need warning. I have a relative who regularly puts his money in stupid things (like various shitcoins) and then loses most of it, and I think it's immoral to pitch investments to him without disclaimers (and yes, I suspect he's accredited - he has high salary, but achieved the high salary recently at age 60, and he's retiring soon with little savings).
I was wondering how you became an "accredited investor". So it's basically brokerage saying "show us your bank balance - okay, you have enough dough to make it worth our while to take your orders"?
There's a lot of confusion about what "accredited investor" even means, because it's an obscure point of US law.
It has nothing to do with "worth our while to take your orders". If you just want to buy Apple stock or whatever, you can open an account with $500 and have at it.
"Accredited investor" means "eligible to buy minimally-regulated financial products".
If I have a company that does not comply with the extensive requirements to be "publicly traded" (periodic public, audited financial statements and other public disclosures), I cannot make it available as an investment to the general public. If I accept a bunch of investments from regular people, $5k at a time or whatever, I have committed a crime and could go to jail.
However, I can accept investments from rich people, i.e. "accredited investors". It is my responsibility to confirm that they meet the criteria. I might have a minimum investment, but I'm checking their bank statements not so much to confirm that they're worth my while, but rather to confirm that I won't go to jail.
The theory is that startups need someone to invest in them, but regular people need protection. Regular people get more protection from dodgy investments than rich people, but rich people in turn get high-risk, high-reward opportunities along with the truly dodgy investments.
A somewhat more cynical take is that too many people qualify as "accredited investors":
Really rich can get hosed too. And you can make big money on publicly traded stocks. If you invested $1,000 in APPL 20 years ago and you held on to your investment, you would have more than $300,000 now. Of course if you had invested $1,000 in Hertz Renta Car back then, you have what is known in Bankruptcy Latin as bupkis.
Okay, I had no idea Hertz was doing so badly, and looking at Wikipedia makes me go "What the hell?"
"As of 2019, the company had revenues of US$9.8 billion, assets of US$24.6 billion, and 38,000 employees. The company filed for bankruptcy on May 22, 2020, citing a sharp decline in revenue and future bookings caused by the COVID-19 pandemic"
How do you go from "assets of 24.6 billion" one year to "sell the family silver, we're broke!" the next? This makes me think something more was going on there - like creative accounting? Not really anything like the assets they claimed? Or they really were living "from one paycheck to the next" so their revenues were covering the fleet expenses, and that doesn't sound like a good way to run a business.
I've read further into that Wikipedia article and this makes me go - pardon the bluntness - "holy fuck". Plainly, I am not cut out for the heady heights of high finance!
"Hertz financed itself mostly by taking out loans secured by its fleet of cars, and if the cars fell in value, Hertz’s lenders had the right to demand an immediate payment reducing the amount of the loan, so it was still comfortably covered by the cars’ now-lower value. Because of the crisis, used-car values and sales volumes fell right as Hertz lost most of its customers. The bankruptcy filing started a 60-day clock, during which Hertz’s secured lenders must wait before they can foreclose on the 400,000 U.S. cars that were financed through such arrangements."
So let me see if I have this straight: they were leasing some at least of their fleet? so they were buying them on tick? and then borrowing against those? so they owed double payments on the cars? and then the used car market went kablooey?
I suppose it made some kind of "robbing Peter to pay Paul" sense at the time and so long as nothing happened it was workable, but they don't seem to have made provision for rainy days.
True, I should have phrased that differently to be clear that super-rich also get dodgy investment opportunities, unless their staff keep slick salespeople away. My real point was that low-tier accredited investors are below the point where they realistically get access to interesting startups and whatnot.
My brother the doctor was approached by his investment adviser as to whether he would be interested in investing in private equity funds. He called me because he that I had some involvement in the field, and our other brother who is an executive in a PE owned company. We both told him to stay away.
Ask yourself we said: "Why do they need my money now?"
A story told by George J.W. Goodman, a financial writer and television personality (active from the late 60s until the turn of the century), is about the investor who visited a ranch to see the cattle that he had purchased as a tax shelter. He drives past acres of pasture where fat kine repose in rumination to the ranch house. He goes into the office excited find out which cattle are his. They say none of those, yours are down that road about a mile and the send one of the ranch hands out to escort him. The ranch hand drives him to the drives to the appointed spot where he see a bunch of sickly cows in a rocky scraggly pasture. The ranch hand says. Those are your cattle.
30 years ago, I was a partner in a law firm. For a living, I wrote offering documents for private placements and public offerings. But, my income and assets did not meet the accredited investor test. I couldn't invest in the deals I had created. In the long run I was as well off. A lot of those deals didn't make money.
My understanding of these sort of investments is that you invest in 10 of them and you expect one of them to do well enough to pay for the other nine that tank.
This sort of record apparently makes you worth listening to, because you took a large fortune and failed to make it a smaller one.
"Other people thought it was a conflict of interest that my friend worked at the company. I'm...not sure this is true? I learn about a lot of things through my social network, and networking is a known way of doing and learning about things."
The tricky part here is that this is how pyramid schemes work - word of mouth recommendations from a friend of a friend. We know this is not you, but by the same token, you could be perfectly honest about this! Your friend could be perfectly honest about this! And somebody reading the recommendation sinks their life savings into this because they trust your word and when/if it goes belly-up (because this is a risk when starting any new venture), they've lost everything.
I suppose many of us are sensitive or even over-sensitive to such things as conflict of interest because of the jobs we work where we get it hammered into us about a higher standard of conduct than even Caesar's wife. There is a thin, let us hope bright, line between "a friend of a friend told me about this cool new thing" and "fill your boots".
And even with the best will in the world, some people *are* going to take "I heard about this cool new thing" as "hot stock tip make easy $$$$$".
I think Scott needs to come up with some definition of conflict of interest that is consistent and makes sense to him. Because it doesn't make sense as written. It's not a conflict because...learning about stuff through a social network is normal? Okay, but how does that connect to the concept of a conflict of interest? Is Scott assuming it's not a conflict because the friend didn't blatantly give him money to write about the company on the blog?
That said, I'm not really sure Scott is under an obligation to avoid conflicts of interest. He's a blogger, not a lawyer or financial adviser, so if he wants to use the platform to shill companies that his friends create, knowing he won't be able to objectively evaluate his friends' companies, I'm not sure there's an ethical problem as long as the relationship is disclosed.
I suppose "this is the shiny new thing a friend told me about" and then leave us to go and dig out the details for ourselves if we're really interested, and certainly no hint of "please send your bank account and credit card details to this email address"?
Yeah, I'm comfortable with the proposed approach of keeping the investment pitches to classified threads. But not because it's not a conflict, it definitely is, but I don't think the blogger/reader relationship is the sort of privileged relationship of trust where conflict of interest rules apply.
" I learn about a lot of things through my social network, and networking is a known way of doing and learning about things" – the fact that it is a known way does not mean it is a good way. To make a hyperbolic comparison, murder is a known way of solving your problems, established from the earliest days. Many people still disapprove of this venerable institution in a broad-based manner! It is the same with nepotism; like the poor, we have it always with us, but unlike the poor and murder, it's never good.
I saw the investment advice as potentially muddying the waters with regards to the medical advice. i.e. saying "you should invest in this" implies that the product is probably really great (and therefore maybe you should consider taking some even if it hasn't been through the whole FDA approval process that your readers know you're sceptical of). I'd rate this as relatively low risk, but I'd say the investment shilling was one of the factors that contributed to the perception that the product might be worth taking
The company mentioned as investment opportunity is trying to make a new, completely different drug that use a completely different biochemical process to achieve mitochondrial uncoupling, with a goal of being much safer than DNP (which also works via mitochondrial uncoupling, but is very dangerous). The company is NOT trying to take DNP through the FDA approval process!
The fact that the company is trying to develop a different, safer drug should not indicate that the original drug is safe!
Quite aside the legality of it all, I have another view: There are few rules I live by more stringently than 'I give no investment advice.' despite having more than enough formal education in Finance.
I will even give relationship advice before I give investment advice. One exception: I will raise a flag - once - if a product is either objectively a bad idea (usually because of inordinate fees or carefully hidden risks) or looks like an outright scam.
You can find your way out of insomnia and into sleep by focusing in a counterintuitively alert way on your hypnagogic hallucinations, using them as a sort of biofeedback mechanism and following them as they change their characteristics in predictable ways:
This was very neat and closely matches the meditation practice of the fire kasina. Usually when I would practice that, I would have more visual clarity for a short period of time and more vivid memories.
Very interesting article. I've experienced hypnagogic hallucinations fairly consistently throughout my entire life and the general progression outlined from formless to distinct and from 2D to 3D aligns with what I've always experienced. I do have doubts as to how useful this advice is to a person not familiar with hypnogogia though. Even with my familiarity each different stage when I'm really struggling with a racing mind at bed time, trying to get out of "The Rut", just shifting my focus isn't enough. I usually have to do a full reset, get out of bed, cool off, even walk around some and that's what get's my mind to calm enough for the hallucination to start. Still, I'll be paying more attention and trying to follow the "guideposts" more mindfully now. Also, an element of my hypnagogia has always been aural. Hearing music or voices. This can start as early as what you call "The Lava Lamp". Is this something you've experienced or seen written about?
I haven't noticed much in the way of aural hypnagogic hallucinations, but I haven't gone out of my way to look for them either. Sometimes they show up at the closest-to-sleep guideposts when the microdreams begin. I've got tinnitus, too, so that might overwhel
I recommend disengaging from conversations that are about virtue and affiliation - who is hypocritical, who is a threat, who is a coward, who is a dumb idiot, and so on. In my experience the vast majority of misery that comes from involvement in the, uh, “politics fandom” comes from this, and I’ve gotten happier as I’ve worked to not engage in it and miserable when I’ve lapsed.
Weird opinions on policy questions and the like is fine, and unrelatedly someone needs to have them for us to find new good policies, but you have to work on cutting out toxoplasma. Hate is the mind-killer, even, or especially, hate that would seem to be justified.
If people depend on you for their sustenance (spouse kids etc) and you work in a field where people cancel each other, then I’d probably dial it back.
My experience here is basically I have a good life and career that got kinda sorta jeopardized once by some of my opinions. Nothing huge but the writing was on the wall. I had to evaluate how much these opinions about “shit that doesn’t put food on my table” actually matters.
A few hard questions for you to answer:
1- are your opinions that unique? Is it possible to enjoy the company of a community that shares some of your opinions and advance your contributions to society on some other axis than being a public contrarian?
2 - what’s the upside of broadly sharing unpopular opinions? Of course it is your right but if there’s little upside and lots of downside then...
3 - in the case that you feel this is your duty or calling, are you sure you aren’t confusing your civic/humanitarian duty with the emotionally engaging pastime of talking shit as a form of entertainment?
4- are you prepared for this endeavor to succeed and have your life picked apart by haters?
This is great advice.
You seem uncertain about your goals. Are you looking for:
- expressing your ideas and getting feedback on them
- more social interaction, making friends and so on
- finding activities that aren't "wasteful"
Whatever time you already spent thinking about politics is a sunk cost. Possibly, it might be useful someday, but probably not in any direct way.
With respect to getting feedback on your ideas, I don't think YouTube makes much sense? It's more work and higher risk. You might learn more posting pseudonymously if you can find the right forum.
I'm curious why you can't just be a weirdo into esoteric things? From what you wrote, it seems more like you want validation or acceptance into a group of people than to do anything exactly. I often feel similar, but I've come to accept I'm just the weird one with mix-match opinions. Nothing wrong with being eccentric.
I would suggest seeing if you might not find either an advocacy group with narrowly targeted goals if you have specific political-ish passions. Or perhaps local government. City commissions and small local non-profit boards are often easy to get on to, and they let you affect your local community. You could also seek out places that encourage heterodox thinkers.
Think through your security situation. If you do what you are thinking of and get de-anonymized, what are the risks? How can you mitigate those risks? I'm thinking of Bruce Schneier's list of questions, from "Beyond Fear."
Step 1: What assets are you trying to protect?
Step 2: What are the risks against these assets?
Step 3: How well does the security solution mitigate the risks?
Step 4: What other risks does the security solution cause?
Step 5: What trade-offs does the security solution require?
If you become the target of an internet hate mob, it'll be terrible. It'll be terrible regardless. But if you're in a situation where the haters can't really jeopardize your income source, you'll be a lot better off.
I've mostly gone with passively consume. I can also highly recommend turning off Facebook or other culture-war aggregation devices.
It is not wasted time if you enjoyed researching the questions. And there is absolutely nothing wrong with being a weirdo. My peer group hasn't stopped hanging out with me just because I spend a lot of weirdness points on wacky ideas, in fact they sometimes ask for my input on things (sometimes even in a non-joke way).
This "I must change something" idea just seems premature to me. Do you have any other reasons for wanting to change things (e.g. you have information with important ethical implications)? Break your 'Ugh field' and REALLY think about it.
Get a hobby. Meet people through that hobby; keep the focus of conversation on hobby-related topics and interpersonal stuff.
The correct solution, if you are capable of it, is to learn what normal people believe, and get good at telling them things from your own beliefs that are only one inferential step away from that, and framed in their own language and terminology.
If you do this properly, you will seem interesting and insightful, and people will be interested in coming to you for your take on things. It can be a big help to your career and social life.
However, it takes being really, really focused on modeling the other person's thoughts and knowledge and thinking about how what you say will interact with that and what the result will be, rather than being focused on talking about your own cool ideas and showing how much you know. If you aren't both dedicated to and competent at doing that, it won't work.
This is a very useful answer (I'm a little sad I can't signal boost it with a ❤️!)
You could imagine a grid of opinions, with one axis being "irritating to likeable" and another axis being "unhelpful to useful."
It's not noteworthy to generate unhelpful irritating takes, nor very useful to generate likeable pablum that everyone nods along to without actually being helpful. What about true novel takes that nobody will believe?
Maybe there's a third axis that's key here. A good contrarian needs to have ideas that are novel, helpful, and just approachable enough.
Either way you want to find that sweet spot in the upper right quadrant, or high top right octant, and that multi-variable function is why finding a great contrarian is so damn hard. You can't just say things people think are crazy but happen to be secretly right, that's probably not even half of the work.
There might some other axis to maximize, being able to frame and package and communicate your opinions well is critical too.
Hitchens' Letters to a Young Contrarian is on the whole a pretty good book to encourage you not to abandon the contrarian spirit, but to get better at doing it in an actually convincing way.
But insofar as that is teaching you the importance of contrarianism, and you already know that, you might want to settle in to the tradesman-like skill building of forcing yourself to go to toastmasters or some sort of clubs or activities that praise you specifically for honing your abilities at communication.
That's why I got into nerding out about alcohol. I could use that to relate to normal people and was particularly useful in business settings.
I also joined a discord with that share similar weird (and accept other weird) ideas about political/social issues. And strangely enough, most of the active posters share my same first name.... The discord is one structured around a podcaster that shares roughly similar ideas and openness, but I'm primarily there for the community more than the podcaster (even though I like the podcaster).
I too have Controversial Opinions™*, but I'm a math nerd and I spend a large proportion of my time socializing with other math nerds. I think that the math community generally doesn't cancel people, so I feel safe there. I.e. I've taken the first option as cancellation insurance.
Options (2) and (3) sound great from an individual perspective but are probably not sustainable in the long run and also contribute nothing to the world, so probably rule them out for a life plan. Option (4) sounds possibly feasible as a life plan, but I think that in order for this to be cancellation-proof you're going to have to be rich enough to have "FU money" like Elon Musk or whatever.
*Hopefully this isn't a real trademark. If it is, sorry.
Oops.
I like this. You might enjoy the recent documentary "Boys State" - teenagers are sorted randomly into fake parties and tasked with coming up with political platforms after the fact.
An associate of mine went to this program several years ago. His party couldn't agree on a platform, and so he convinced a group to splinter off and form a terrorist cell that engaged in guerilla warfare against the nascent government. I can't remember if they successfully staged a coup.
So, uh, watch out for that when assigning manifestos.
So, low does this work? the Democrats write the manifestos and then the Republicans get to decide whether to campaign for UBI and $15 min wage or reinstate slavery and patriarchy? Or the Republicans write them, and the Democrats get to choose between support for gun ownership and school choice or nationalizing industry to inaugurate strict central planning, with mandatory re-education of all white males?
Interesting idea, but I'm not sure how this would replicate the "divide" step of divide and choose. What's to stop a party from writing two identical manifestos that capture their preferred policy positions?
And, for that matter, what would stop a party from completely ignoring its assigned manifesto?
> replicate the "divide" step of divide and choose.
The rule should be that one Party writes only a single manifesto, the other manifesto automatically becomes the logical negation of the first one.
(1) Crimson Lake Party writes manifesto: "If elected, we will slash taxes by 20%" Automatic negation manifesto: "If elected, we will increase taxes by 20%"
(2) Gamboge Party: "Oh, thanks very much, we'll take the tax-slashing manifesto!" and Crimson Lake Party gets the tax-increase manifesto
(3) Voters don't want a 20% tax hike, so they vote the Gamboge Party into power
End result: whichever party writes the manifestoes is going to do the most milk-and-water, 'status quo all the way' manifesto so the opposition will have no advantage in picking one over the other and they won't be stuck with the disadvantage manifesto, resulting in both parties becoming ever more like Tweedledum and Tweedledee, since whoever gets elected is elected on a manifesto of "more of the same".
... Why wouldn't the party writing the manifestos just write the same thing (the thing the author likes) twice?
*Dividing* something that already exists and *creating* something new are very different processes. The incentive structure from one doesn't carry over to the other.
"giving the same manifesto twice is making the result of the election a coin-flip"
Elections have factors other than policy differences. My party's candidate will implement the platform with competence and integrity, and more importantly is fun to be around!
As you may know, something along these lines has been used in legal systems. In Periclean Athens, the convicted defendant in a criminal case could propose a penalty, the prosecutor could impose a penalty, and the jury chose between them.
Did they actually shove seeds into an open wound? That sounds less than ideal. And what if the wound wasn't a hole (e.g., a lost finger)?
More recently, it's used in complex arbitration. I think there are some famous examples in Baseball players union negotiations where the arbitrator asks both sides to submit a resolution so he could choose whichever he considered the most gracious and reasonable.
On top of generating generally fair results, it's also a great work-saving device for the arbitrators, so it's sort of doubly clever.
Re: investments
On the simple yes-no question, 45% said it could sometimes be okay/appropriate to write about companies' requests for investment, 13% said it was never okay/appropriate, and 42% weren't sure.
On the more complicated question, 45% thought that the actual investment request I included was appropriate, 21% weren't sure, and 34% thought it was inappropriate for various reasons. Of those who thought it was inappropriate, about 10% thought investment requests were never appropriate, and the other 24% thought it was inappropriate for various specific reasons.
The most commonly cited reason was that people thought it felt like a bait-and-switch where I didn't tell them the post was leading up to an investment pitch. At first I felt sort of offended by this one - I titled the post "Shilling For Big Mitochondria"! But on further reflection I guess it makes sense. I had been interested in writing about DNP for a while, hearing about this company cemented it for me, and so it was an awkward pastiche of the post I would have written anyway and a post about the company. I can see how it would be jarring to read.
Other people thought I needed to take more precautions to inform people that investing in biotech companies is very risky and really only suitable for professional investors. The company was only accepting investment from accredited investors, which I thought made this a non-issue. I'm not sure whether the people saying this didn't know that, or whether they think even accredited investors need a special warning.
Other people thought it was a conflict of interest that my friend worked at the company. I'm...not sure this is true? I learn about a lot of things through my social network, and networking is a known way of doing and learning about things.
I think in general a lot of the problem was that people thought of this as me trying to claim that this was a hot stock tip that would make $$$, whereas I was trying to present it as a basically charitable opportunity to support a company doing really exciting and possibly world-changing research. If I was claiming it was a hot stock tip, then having a friend working there might be distorting my stock-evaluation ability. If it's just a cool opportunity to help with research, then...I'm not sure. This blog is fun, but it's only going to be actually worth our time if it helps change the world for the better. That's a tough order for a blog, and one of the few ways I can imagine it happening is if it helps connect people who can get involved in important institutions like charities, research programs - and yes, - companies - in ways that help them grow.
I have no ability to give people hot stock tips that will make them money, and in general you should assume I'm not doing this. But I know lots of amazing people trying to change the world who deserve more support than they're getting, and I'd like to be able signal-boost this when I think it's valuable.
My current plan is that if I ever do anything like this again, I'll do it on a Classified Thread (remember those?) where it won't feel out of place to anyone, and I'll specify that I have no reason to think it will make anybody any money. Also, please don't ask me to pitch your business; there is basically no chance it will work but it will make things awkward.
Regarding accredited investors and warnings, I always point people at Matt Levine's write-up in https://www.bloomberg.com/opinion/articles/2018-09-24/earning-the-right-to-get-swindled.
I'm having trouble understanding why you think this is a charitable opportunity. You know about effective altruism, if you are seriously making the claim that investing in this biotech startup will do more good than giving the money to an EA charity, you will need to provide a mountain of evidence for that claim. I want to preserve and grow my wealth with my Investment Money, and do the most good with my Charity Money. I don't think mixing the two objectives is a good idea.
Can you explain your preference for keeping a hard line between investing and charity? It’s not obvious to me that utilitarian accounting would preclude investments that have both direct returns and positive externalities.
People aren't fully rational machines. I'd say it's a conflict of interest.
Where’s the conflict?
I assumed he doesn’t hold a position and didn’t receive compensation for his blog post.
If he's motivated to get investors to give it money independent of whether it would be a good deal for the investor, ehe has a conflict of interest. "I really think it would be good for the world if this organization got a lot of money" may be a more noble reason than "it's run by my brother and I want him to get richer", but it's still a reason that distorts one's judgment.
If that is a conflict of interest, how is any discussion of anything Scott approved of not a conflict of interest? Mentioning something you heard on the news because you think it's a positive development is a conflict of interest by this logic. I can't see how any discussion of companies or technologies would not be a conflict of interest, if you are defining interest as simply approving of the proposed outcome!
I think you're confusing conflict of interest, where potential personal gain means you should not declare an opinion, which is a pretty-clearly defined concept, with having an interest in the company, which is healthy and part of how we want the economy to work. That Scott has a friend whose work is interesting enough to him to suggest it is worth supporting is no more contentious than me saying I believe we should all stop an listen to the birds for five minutes every day, and Scott's statement is probably rationally a more useful thing to do.
I'd class this as a case of rigour over-zealously applied, and hopefully not an example of the sometimes-observed distaste for commerce, although if the latter at least with got a thematic link to the recent posts on class I suppose...
It's a conflict of interest only if you assume that the goal of an investment can only be return. If the people recommended to are also interested in making the world better, then this is not a conflict of interest but just "an interest". It's the same interest, is my point.
If this is your bar, doesn't just about everything he writes about constitute that benefits anyone some sort of conflict of interest?
Using your criteria, doesn't everything he does for any reason "distort" his judgement?
Such a company would either trade the positive externalities for more money at the first opportunity, or would be outcompeted by more unethical companies and lose the ability to do good or make money. Moloch doesn't allow you to serve two masters.
It seems like you’re assuming a company can capture all of the value it creates. If it can’t, there are positive externalities. Competition can even reduce the ability to capture value (eg by driving prices down).
That’s a good way of addressing the deductive point.
And inductively, there are companies whose products and services make the world better. Therefore shouldn’t supporting a company like that who isn’t well known be a priority for an Effective Altruist?
A for-profit company is already trading the positive externalities for more money. That's how it makes money. There are 3 things you're forgetting:
1. You're assuming that charities are as efficient as for-profit companies are at spending money to increase human welfare. But for-profit companies get paid more to increase human welfare more, while charities don't. This is why for-profit companies are free to spend their money in ways that will eventually increase welfare a lot (e.g., creating Google, ), whereas charities are constrained to spend their money in ways that appear, to the average donator, to increase welfare right now (e.g., buying solar power panels for African villages), or to decrease total welfare in redistributing it to someone especially pitiable (e.g., the Make-a-Wish foundation, average cost $10K/wish).
I could write a long rant about my experiences in startups and government contracting, in which I learned that, when people are given a lot of someone else's money to spend, even if they have the best of intentions, they spend it in useless ways because they don't have the only metric (market value) that tells you how valuable something you're doing really is to people. The waste that results from not having paying customers to keep you in line is astounding.
2. When you invest in a company, you're not losing the money; you can sell the stock once the company has a firm financial footing, and give those proceeds to charity. Even if you make the assumption in #1, giving to charity and investing in a for-profit should come out about even in altruistic utilon generation.
3. "Moloch" is really bad anthropomorphizing which focuses entirely on the negative, personifies it, and attributes it with agency, thus encouraging people to think of free markets and of freedom as evil instead of as good, and to seek agents of Moloch to slay. It's Marxist mythology which has crept into the rationalist community (via Scott, I'm afraid).
Bear in mind that serious EAs have thought *a lot* about this stuff, and have virtually always landed on charity not for profit enterprises. And these are the same people who have also landed on 'generally, political activism is suboptimal' 'worry about AI risk' and 'working for big companies and give your money away is an excellent path to doing good', so I don't think this just a fear of non-leftist/libertarian/unusual conclusions.
I think GiveWell was also founded by people with private, not public or charitable, sector backgrounds?
There's a large difference between "the most-effective utilon generator is usually a non-profit" and "theoretically, no for-profit company can ever be as efficient as any non-profit company".
Why is it that not to long ago in the US poor people starved to death sometimes, and now they are fat? Is it because people give more to charity than they did then? No. It's because of improvements in technology (or if charity is increased it is because GDP has increased, which is due to technology). So I don't see how you can say that charity is clearly superior, when history shows that investment in technology is clearly where improvements in standard of living come from.
(Er, I shouldn't have said "trading the positive externalities for money". I meant, the positives aren't externalities, because the company is paid for them.)
With either extreme I know where they stand. Either they are profit-maximisers or they are bound by the rules of registered charities. If it's in the middle then who knows where in the middle it is?
I took his use of the word charity to mean “Treat this investment as a gift without any expectation of a financial return”.
Mixing the two objectives of increasing invested wealth and doing good for humanity are very much the trend in the investment world today. And even before ESG and impact funds were a thing, the idea of “double bottom line” has been around for awhile. I think your view that these objectives should be compartmentalized is more fringe and requires evidence.
I think the view that they should be compartmentalized is simply a reversion, back from utilitarianism to subjective, spiritualist, non-materialist ethics again, which denies that morality can be quantified, and claims that "material" and "spiritual" are separate magisteria.
Right now some EA groups' recommendations is that they will use billionaire money to take care of the obvious stuff, and that individuals with more normal amounts of money should spend it on smaller opportunities that they are uniquely placed to know about which the billionaires haven't found yet. If this drug has an X% chance of ending obesity, and I'm uniquely placed to know about it because I know a person who works there, I think it counts as a potentially EA-like thing that the billionaires haven't heard about yet.
(caveat: other organizations don't say this, and it's kind of complicated because the billionaires will only fund up to half of any charity's operating budget so it's always possible to increase the amount the billionaires will donate by donating yourself. This is my impression of what a few people have told me, nothing more)
It's tangential, but this seems backwards to me. Money is fungible, but time isn't. If I donate a relatively small amount, it's not worth my while finding niche donation opportunities. I should just give the money to EA funds or the top recommendation on GiveWell, which I can assume have sufficient capacity for my donation. Whereas if I were giving away a billion pounds, it would be worth spending time identifying particular giving opportunities, which I could then fully fund.
My suspision is that the position you refer to has its root in vanity: people don't like the feeling that their donation is insigificant compared with Dustin Moskovitz. But actually, it makes no difference to the impact. There's no need to be a hipster: just do the best thing, and if other people also do the best thing, that's great!
I could see an argument that it's not worth spending time hunting for unique opportunities, but you should still take advantage of any unique opportunities that happen to fall in your lap while you are going about your life.
Though I'm not sure that holds up, because even if you hear about a unique opportunity spontaneously, there's presumably still some due-diligence investigative work you'd have to do before putting money there made sense.
Big organizations like Open Phil don't have the capacity to vet hundreds of small (<100k) grants, so they prefer to give to organizations that can absorb large amounts of money. Since there are many opportunities for grantmaking in the 5k-500k range, and since the big funders are constrained in how many organizations they can vet, an individual donor that is prepared to do their own work can plausibly find a niche topic they know well that is competitive with many of the best giving opportunities.
The Open Philanthropy Project—which is about as EA as it gets—makes for-profit investments in biotech startups.
I make annual donations to a Children's Hospital in my town to support their ongoing research program. It is a registered charity and my donations are tax deductible. So, it is not impossible. OTOH, when I donate I donate, and when I invest, I invest.
The existing EA framework ≠ the be-all end-all EA mindset. One can be enough of a consequentialist utilitarian to agree with the EA mindset per se, but have slightly different terminal values from the EA orthodoxy to the extent that one's calculus about which charities should be prioritized will be different. For example, this might be true of a preference utilitarian who *hard* rejects the Repugnant Conclusion, and for whom guaranteeing a pleasant life to those already living is much more important relative to preventing deaths than the existing EA framework assumes.
While I understand your thought process, wouldn't it be even better to invest in companies that are making a difference?
Our feelings about electric cars or Musk aside. A company like Tesla, who's stated goal is to reduce green house gas emissions from vehicles sounds like a great place to invest for your future in both ways. You can make money, and potentially protect the environment. More so than buying your own electric car.
As another option, I've heard of investment funds that target green initiative companies (green energy and such). Again, why not make money and do what you can to protect the environment.
Maybe you're on top of this, but most of us just buy investment funds or ETFs. There's a chance that you're supporting companies that actually go against your charity donations. Nullifying or reducing your own altruistic effects (in so far as buying shares in a company tell it you're happy with what they're doing).
I'd argue that investing for change is the most Effectively Altruist way to invest. Your investments would reinforce your charity dollars.
I think I need to go double check where I'm invested.
I wonder if this is partly responsible for Tesla's stock boom, and whether institutional investors have already incorporated measures of altruism into their models. I tried googling, but was overwhelmed by results linking to stories about people who (supposedly) were entirely motivated by altruism and just ended up making lots of money, because karma.
I also wonder why we even have to talk about this. If people invest to maximize expected utility, and their utility functions include concern for other people--both of which I believe are usably correct--then it should have been obvious since the great post-Christian progressive/moral revolution of the 19th century that seemingly-altruistic companies have higher stock values than P/E-equivalent not-obviously-altruistic companies.
I doubt institutional investors have started using altruism as a metric in their models.
Firstly because they would advertise the hell out of it. It's a lot easier to forgive lower than expected returns in a fund if the argument is "but we did good too".
Secondly because we would see more investor activism on that front, and it would probably be advertised to all hell again.
I admit, I could just be missing the advertising on these funds, and socially conscious activist investors as I'm not exactly the target demographic for that news.
I wonder if billionaires could start buying up huge stakes in these companies in order to push them to pursue better long-term goals instead of just the best short term returns.
The problem is that the non-altruistic return from investing in those companies is then less than from investing in other countries, so all non-altruistic investors put their money somewhere else. Unless there are enough altruistic investors to fully fund the altruistic companies, return on investment goes back up to the market return, the companies are paying as much for capital as before so no benefit to altruistic objectives, and the altruistic investors get their altruism for free — but not really, since their investment doesn't benefit the companies.
So the altruists should either invest in companies that only altruists invest in or spent money on charity instead.
I have three issues with that reply.
1. Empirically, when a British Petroleum oil well polluted the Caribbean, BP's stock fell far below any market-rational value, and stayed low even after the reparations that would be demanded from it became known. The simplest explanation is that the market was punishing it for harming the environment.
2. Theoretically, an omniscient, non-altruistic investor would know when a stock had added utility to altruists, and that this should be factored into its expected market value. Investors don't care about the company's returns; they care about the market value of their investment. If a bunch of altruists will value the stock higher, then the stock really has a higher market value.
On the other hand, a non-omniscient, altruistic investor who doesn't know which companies are socially helpful or harmful will act just like a non-altruistic investor.
So the difference which motivates the behavior you describe isn't between altruism and non-altruism, but between knowing and not knowing about the ways companies help and harm others. Note that in my BP example, the harm done by BP was blared across all media nonstop for weeks, so everyone knew about it, and knew everyone else knew about it.
So perhaps social benefits would affect stock price more if Wall Street culture expected reporters and analysts to talk about the social harms and benefits of companies. This doesn't even require them to /care/ about them; merely to regard them as data that's useful to some investors. Once everyone believes that social net benefits are an important factor in stock value, they'll become an important factor in stock value.
3. I shouldn't have used the word "altruism", meaning "acting to benefit others at expense to oneself". I'm thinking rather of companies whose for-profit business happens to involve making stuff I think of as especially socially helpful, like Google, or the makers of coronavirus vaccine.
However, now that I think this through, as a good free-market economist I should accept that our best estimate of the social value of the stuff made is its market value, which represents its utility to its consumers. Hence, those companies with the largest gross income are those producing the most social value (except in non-free-market cases involving monopoly, regulation, confusopoly / private information, etc.). So if my investment strategy sought to maximize social utility, the only difference would be that I'd invest in companies with high gross rather than net income. But I'd go broke, because those companies are much more likely to go out of business than companies with high net incomes. (Note this doesn't apply to the preceding discussion of companies acting in ways which are socially perceived as beneficial; only to companies which are objectively socially beneficial as measured by market prices.)
The two strategies would give similar outcomes if the altruistic good-free-market investor considers the social utility that each company will produce over the life of the company.
A mountain of evidence that investing $X in a for-profit company can produce more social utility than giving $X to any charity: Google.
Eliezer Yudkowsky wrote a post, Purchase Fuzzies and Utilons Separately, which justifies giving to charity, but (IIRC) on the basis that giving to charity may increases social utility more through the fuzzies that you personally receive from giving to charity (as fuzzies are essential to life), than through the utility produced from your money by the charity.
Can you clarify how Google is a mountain of evidence for a for-profit company producing more social utility than giving $X to any charity?
Google's first round of funding was $25 million, which I think they operated for a few years. It kept the Internet usable. Yahoo and Ask Jeeves had curated approaches that didn't scale; Alta Vista bogged down on trying to tackle NLP; metacrawler relied on other search engines to do a good job.
I may be overrating Google's importance in search; their main effect may have been gaining a monopoly by eliminating all other competition by the dastardly trick of patenting their PageRank search algorithm, which was so stupidly simple and obvious that you couldn't really make a decent search engine without using it.
But I use Google's free email service; their free doc service; their free spreadsheets; their free speech-to-text program. So do billions of other people. Add up the utilons there. I embrace the "repugnant conclusion".
Of course, this may all be cancelled out when they create the first AGI and conquer or destroy the world. But, until a few years ago, that didn't seem inevitable.
Scott, seriously, talk to a lawyer about this. Don't assume you can figure out what's legal and what isn't; you're very smart, but the law can be very dumb.
Do you think he’s subject to some part of Reg D?
If he’s not receiving consideration for the promote, I’d be interested in hearing where you think this runs afoul.
If he promotes a startup belonging to someone who's involved with Substack, he's at risk.
I'm not following your legal theory
By involved with Substack, I mean someone who's either involved in Scott's income guarantee from Substack or directly involved in investing in the company itself.
The SEC investigation is a pain in the ass and there is no upside for doing this.
All it takes is one casual person swinging by because they heard about this Scott Alexander person somewhere, reading about "Magic Carpets is a swizzy new startup", deciding to sell the very shirt off their back to invest in Magic Carpets, then the thing goes "ka-blooey", they lose everything, and they get angry and go to law over it.
Doesn't matter if Scott never said "Sell your shirt to invest in Magic Carpets", there are plenty of dumb smart people out there.
Has any blogger (who doesn't normally blog about investments) been convicted in such a case?
This reads like a fully general argument against every communicating anything to anyone. There's no real obstacle to someone suing someone else for _any reason at all_ (or even no real reason).
Reg D only applies to issuers. And it only deals with 33 Act compliance. Non-issuers need to worry about BD regulation and 40 Act compliance as well. Reg D does not help with that.
If you are not receiving recompense, why run any risk?
I left a comment in the survey essentially saying that accredited investors need warnings, but it was probably too short to explain well. @bunnydogwalking already posted the excellent Matt Levine column, so I'll assume you've read that.
I completely agree that there is value in signal-boosting on this blog investments that genuinely interest you because /actual/ sophisticated investors read this blog. (And because you already realize that this only works if you ignore people asking you to pitch their business.)
However, "accredited investor" does not in any way mean "sophisticated investor". Random dentists or Google SWEs or whoever should not be investing in private placements. But, I'm libertarian enough to say that they just need a warning. "Don't invest in private companies if losing $250,000 would make you lose any sleep" or whatever. (Yeah, a company could accept a small investment, but that's a red flag.)
The point isn't to cover your ass -- the point is (1) to genuinely convince dentists that the opportunity is in fact targeted at more sophisticated investors and (2) to convince people complaining about all this that it was never a problem because you were only interested in bona fide sophisticated investors in the first place. (But obviously this won't help with people who are just vaguely offended by capitalism in general and large amounts of money in particular.)
I personally did NOT get the impression that the biotech company was targeting accredited but unsophisticated investors, but due to this becoming some big thing where you're soliciting general feedback about signal-boosting investments, I'm offering general feedback.
It was I who suggested that there were legal problems with suggesting an investment opportunity in your friends company.
In my time I was accounted to be a savvy practitioner of securities law. People paid me for my advice. Some of them heeded me. Some of them didn't. One of the guys who didn't is in durance vile still.
My free advice to you was don't do it. I saw downsides and you claimed you had no upside, so the conclusion was easy.
You have a constitutional right to commit journalism, but I thought the post in question crossed the line from journalism into solicitation.
In the future, I would say that it is proper and legal to report on development stage technology, and even to say that the developer is looking for funding. But I would cut it off at that. Let the unwary use their Google fu, to find the company.
Is there a difference between saying "Acme is making exciting rockets, and by the way it is looking for funding" vs. what I did (which you seemed to think crossed the line into making an investment pitch)?
You said Acme was a friend of yours, I think. That's where it got iffy.
Your original post made me uncomfortable. It is lawful and proper to practice science journalism. And I thought the original post went past that. I don't want to try spec out all of the possible variations. It is tedious and it would require me to do research that I do not have the tools for or the inclination to do. If I see something that makes me uncomfortable I will say so.
Would it be okay to mention "Magic Carpets is doing something along these lines, go here for more details"
DISCLAIMER: A friend of mine is involved with Magic Carpets and told me about it
EVEN BIGGER DISCLAIMER: I am not recommending this as an investment! Contact your broker for professional advice!
Can you point to an enforcement action which contains a fact pattern analogous to Scott's blog post?
My experience with securities lawyers has been that there are a ton who have academic legal theories (and will charge you a lot of money to share those opinions with you in fancy memos!) but few who have relevant enforcement perspective and can contextualize the risk.
We can probably agree that just about every real estate deal with multiple particpants and angel deal could be some sort of Reg D violation with a broad interpretation of solicitation. The value of legal advice is contextualizing risk - not restating the law into laymen's terms.
No. I am not doing research. I don't have the tools. I don't have the time. And, it is not enough fun to do for less than $1000/hr. I am not even going to drag in my friend who was general counsel of FINRA or my other friend who was general counsel of the SEC.
I think whether or not there is a risk of enforcement cracking down on Scott, one might think that if he's doing the *sort* of thing that they could *legally* crack down on, then that might be a sign that this post is *ethically* problematic, even if it's not likely to lead to actual legal trouble. (Of course, if someone thinks the regulations are badly written, then that might be less of a significant worry.)
"Accredited investors" doesn't actually mean people with any kind of education/credentials in investing; it just means people with $200k/year income or more. Scott, you're probably an accredited investor.
So yes, I do think that "even" accredited investors need warning. I have a relative who regularly puts his money in stupid things (like various shitcoins) and then loses most of it, and I think it's immoral to pitch investments to him without disclaimers (and yes, I suspect he's accredited - he has high salary, but achieved the high salary recently at age 60, and he's retiring soon with little savings).
I was wondering how you became an "accredited investor". So it's basically brokerage saying "show us your bank balance - okay, you have enough dough to make it worth our while to take your orders"?
There's a lot of confusion about what "accredited investor" even means, because it's an obscure point of US law.
It has nothing to do with "worth our while to take your orders". If you just want to buy Apple stock or whatever, you can open an account with $500 and have at it.
"Accredited investor" means "eligible to buy minimally-regulated financial products".
If I have a company that does not comply with the extensive requirements to be "publicly traded" (periodic public, audited financial statements and other public disclosures), I cannot make it available as an investment to the general public. If I accept a bunch of investments from regular people, $5k at a time or whatever, I have committed a crime and could go to jail.
However, I can accept investments from rich people, i.e. "accredited investors". It is my responsibility to confirm that they meet the criteria. I might have a minimum investment, but I'm checking their bank statements not so much to confirm that they're worth my while, but rather to confirm that I won't go to jail.
The theory is that startups need someone to invest in them, but regular people need protection. Regular people get more protection from dodgy investments than rich people, but rich people in turn get high-risk, high-reward opportunities along with the truly dodgy investments.
A somewhat more cynical take is that too many people qualify as "accredited investors":
Regular people: get regulated investments - publicly-traded companies, mutual funds, etc
Super-rich (> $50MM): also get interesting high-risk, high-reward investments like startups
Low-tier rich "accredited investors" (dentists, whatever): also get dodgy investments from slick salespeople
Of course, in reality the boundary between the categories is fuzzy.
Really rich can get hosed too. And you can make big money on publicly traded stocks. If you invested $1,000 in APPL 20 years ago and you held on to your investment, you would have more than $300,000 now. Of course if you had invested $1,000 in Hertz Renta Car back then, you have what is known in Bankruptcy Latin as bupkis.
Okay, I had no idea Hertz was doing so badly, and looking at Wikipedia makes me go "What the hell?"
"As of 2019, the company had revenues of US$9.8 billion, assets of US$24.6 billion, and 38,000 employees. The company filed for bankruptcy on May 22, 2020, citing a sharp decline in revenue and future bookings caused by the COVID-19 pandemic"
How do you go from "assets of 24.6 billion" one year to "sell the family silver, we're broke!" the next? This makes me think something more was going on there - like creative accounting? Not really anything like the assets they claimed? Or they really were living "from one paycheck to the next" so their revenues were covering the fleet expenses, and that doesn't sound like a good way to run a business.
More informed comment, I would welcome on this!
I've read further into that Wikipedia article and this makes me go - pardon the bluntness - "holy fuck". Plainly, I am not cut out for the heady heights of high finance!
"Hertz financed itself mostly by taking out loans secured by its fleet of cars, and if the cars fell in value, Hertz’s lenders had the right to demand an immediate payment reducing the amount of the loan, so it was still comfortably covered by the cars’ now-lower value. Because of the crisis, used-car values and sales volumes fell right as Hertz lost most of its customers. The bankruptcy filing started a 60-day clock, during which Hertz’s secured lenders must wait before they can foreclose on the 400,000 U.S. cars that were financed through such arrangements."
So let me see if I have this straight: they were leasing some at least of their fleet? so they were buying them on tick? and then borrowing against those? so they owed double payments on the cars? and then the used car market went kablooey?
I suppose it made some kind of "robbing Peter to pay Paul" sense at the time and so long as nothing happened it was workable, but they don't seem to have made provision for rainy days.
> Really rich can get hosed too.
True, I should have phrased that differently to be clear that super-rich also get dodgy investment opportunities, unless their staff keep slick salespeople away. My real point was that low-tier accredited investors are below the point where they realistically get access to interesting startups and whatnot.
My brother the doctor was approached by his investment adviser as to whether he would be interested in investing in private equity funds. He called me because he that I had some involvement in the field, and our other brother who is an executive in a PE owned company. We both told him to stay away.
Ask yourself we said: "Why do they need my money now?"
A story told by George J.W. Goodman, a financial writer and television personality (active from the late 60s until the turn of the century), is about the investor who visited a ranch to see the cattle that he had purchased as a tax shelter. He drives past acres of pasture where fat kine repose in rumination to the ranch house. He goes into the office excited find out which cattle are his. They say none of those, yours are down that road about a mile and the send one of the ranch hands out to escort him. The ranch hand drives him to the drives to the appointed spot where he see a bunch of sickly cows in a rocky scraggly pasture. The ranch hand says. Those are your cattle.
It does sound like a grey area. Most are probably honest? But if someone wants to go out and pluck some pigeons, this is also a nice way to do it?
30 years ago, I was a partner in a law firm. For a living, I wrote offering documents for private placements and public offerings. But, my income and assets did not meet the accredited investor test. I couldn't invest in the deals I had created. In the long run I was as well off. A lot of those deals didn't make money.
My understanding of these sort of investments is that you invest in 10 of them and you expect one of them to do well enough to pay for the other nine that tank.
This sort of record apparently makes you worth listening to, because you took a large fortune and failed to make it a smaller one.
"Other people thought it was a conflict of interest that my friend worked at the company. I'm...not sure this is true? I learn about a lot of things through my social network, and networking is a known way of doing and learning about things."
The tricky part here is that this is how pyramid schemes work - word of mouth recommendations from a friend of a friend. We know this is not you, but by the same token, you could be perfectly honest about this! Your friend could be perfectly honest about this! And somebody reading the recommendation sinks their life savings into this because they trust your word and when/if it goes belly-up (because this is a risk when starting any new venture), they've lost everything.
I suppose many of us are sensitive or even over-sensitive to such things as conflict of interest because of the jobs we work where we get it hammered into us about a higher standard of conduct than even Caesar's wife. There is a thin, let us hope bright, line between "a friend of a friend told me about this cool new thing" and "fill your boots".
And even with the best will in the world, some people *are* going to take "I heard about this cool new thing" as "hot stock tip make easy $$$$$".
I think Scott needs to come up with some definition of conflict of interest that is consistent and makes sense to him. Because it doesn't make sense as written. It's not a conflict because...learning about stuff through a social network is normal? Okay, but how does that connect to the concept of a conflict of interest? Is Scott assuming it's not a conflict because the friend didn't blatantly give him money to write about the company on the blog?
That said, I'm not really sure Scott is under an obligation to avoid conflicts of interest. He's a blogger, not a lawyer or financial adviser, so if he wants to use the platform to shill companies that his friends create, knowing he won't be able to objectively evaluate his friends' companies, I'm not sure there's an ethical problem as long as the relationship is disclosed.
I suppose "this is the shiny new thing a friend told me about" and then leave us to go and dig out the details for ourselves if we're really interested, and certainly no hint of "please send your bank account and credit card details to this email address"?
Yeah, I'm comfortable with the proposed approach of keeping the investment pitches to classified threads. But not because it's not a conflict, it definitely is, but I don't think the blogger/reader relationship is the sort of privileged relationship of trust where conflict of interest rules apply.
" I learn about a lot of things through my social network, and networking is a known way of doing and learning about things" – the fact that it is a known way does not mean it is a good way. To make a hyperbolic comparison, murder is a known way of solving your problems, established from the earliest days. Many people still disapprove of this venerable institution in a broad-based manner! It is the same with nepotism; like the poor, we have it always with us, but unlike the poor and murder, it's never good.
I saw the investment advice as potentially muddying the waters with regards to the medical advice. i.e. saying "you should invest in this" implies that the product is probably really great (and therefore maybe you should consider taking some even if it hasn't been through the whole FDA approval process that your readers know you're sceptical of). I'd rate this as relatively low risk, but I'd say the investment shilling was one of the factors that contributed to the perception that the product might be worth taking
That's a dangerous misreading!!
The company mentioned as investment opportunity is trying to make a new, completely different drug that use a completely different biochemical process to achieve mitochondrial uncoupling, with a goal of being much safer than DNP (which also works via mitochondrial uncoupling, but is very dangerous). The company is NOT trying to take DNP through the FDA approval process!
The fact that the company is trying to develop a different, safer drug should not indicate that the original drug is safe!
Quite aside the legality of it all, I have another view: There are few rules I live by more stringently than 'I give no investment advice.' despite having more than enough formal education in Finance.
I will even give relationship advice before I give investment advice. One exception: I will raise a flag - once - if a product is either objectively a bad idea (usually because of inordinate fees or carefully hidden risks) or looks like an outright scam.
You can find your way out of insomnia and into sleep by focusing in a counterintuitively alert way on your hypnagogic hallucinations, using them as a sort of biofeedback mechanism and following them as they change their characteristics in predictable ways:
https://www.lesswrong.com/posts/GwGeksTkFQbm6Hbrx/how-to-use-hypnagogic-hallucinations-as-biofeedback-to
This was very neat and closely matches the meditation practice of the fire kasina. Usually when I would practice that, I would have more visual clarity for a short period of time and more vivid memories.
Thank you
Very interesting article. I've experienced hypnagogic hallucinations fairly consistently throughout my entire life and the general progression outlined from formless to distinct and from 2D to 3D aligns with what I've always experienced. I do have doubts as to how useful this advice is to a person not familiar with hypnogogia though. Even with my familiarity each different stage when I'm really struggling with a racing mind at bed time, trying to get out of "The Rut", just shifting my focus isn't enough. I usually have to do a full reset, get out of bed, cool off, even walk around some and that's what get's my mind to calm enough for the hallucination to start. Still, I'll be paying more attention and trying to follow the "guideposts" more mindfully now. Also, an element of my hypnagogia has always been aural. Hearing music or voices. This can start as early as what you call "The Lava Lamp". Is this something you've experienced or seen written about?
I haven't noticed much in the way of aural hypnagogic hallucinations, but I haven't gone out of my way to look for them either. Sometimes they show up at the closest-to-sleep guideposts when the microdreams begin. I've got tinnitus, too, so that might overwhel