TL;DR:

Options traders think it's extremely unlikely that the stock market will appreciate more than 30 or 40 percent over the next two to three years, as it has over the last year. So they will sell you the option to buy current indexes for 30 or 40% above their currently traded value for very cheap.
But slow takeoff, or expectations of one, would almost certainly cause the stock market to rise dramatically. Like many people, I think institutional market makers are basically not pricing this in.
To take advantage of this, instead of buying individual tech stocks, I allocate a sizable chunk of my portfolio to buying LEAPS (Long-term Equity AnticiPation Securities) at high strike prices and faraway expiration dates on these indexes. If a slow takeoff does happen, and public companies capture some of the increased productivity, I'll at least be duly compensated for it when [...]

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Outline:

(01:16) FAQ

(01:20) Does this strategy only make sense if you think visible slow takeoff will begin before 2027?

(02:23) Why not buy futures instead of options, if your thesis is about the next ten years rather than the next three?

(03:09) What is money going to be worth to you post-AGI anyways?

The original text contained 2 footnotes which were omitted from this narration.

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First published:
March 31st, 2024

Source:
https://www.lesswrong.com/posts/vvg6DmJSprDLNhW3v/my-simple-agi-investment-and-insurance-strategy

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“My simple AGI investment & insurance strategy” by lc

LessWrong (30+ Karma)