All of Annapurna's Comments + Replies

Perhaps you are right: Creating a financial system for e-tulips was dumb in the first place. 

But that discussion goes beyond the scope of this post. The fact of the matter is the financial system for crypto was created, and a major player crashed, and people not well versed in finance and crypto are somewhat interested in how it happened. 

I think it's directly relevant to what you wrote in the "What Happens Now" and "What Happens to Crypto" section, which I take to be the point that the rest of the post is kinda building up to. These sections seem to be written with some assumptions which I think are unwarranted and, at least, untrue in my opinion. Comparisons with Enron, Lehman, etc -> Assumption: There was some real value here that customers put in, that was lost/destroyed/stolen by fraud. I think this assumption is not true for other crypto assets, only for the USD that people put in. "In reality I think it is good that these bad actors get flushed out." -> Assumption: there are good actors, i.e. that after bad actors get "flushed out" there will be a significant number of non-flushed actors "the engineers working on figuring out ways that the technology can have utility are still working on the space." -> Assumption: crypto can have significant utility and thus has value "I hope that this saga leads to more due diligence . . . . when it [comes] to internal accounting controls and good governance [at crypto firms]. . . ." -> Assumption: It is possible for there to be crypto firms that have good internal accounting controls, good governance, and be well capitalized. IMO, doing due diligence on a crypto firm is like entering a cat in the dog show - sure you can list all the ways it does or does not conform to breed standards (pointy ears, upright tail, etc) but fundamentally the problem is that it's a cat. "People will always say that this is a story about crypto. In reality, this is a story about lending." -> No, I think it's a story about crypto.

Isn't the most accurate source of information about the world Wikipedia?

And it works fairly well?

Anyways, great post. Watching the pitchforks come out against this whole ordeal is kind of comical, and I am excited to see how this Culture Battle over Musk-owned private Twitter plays out. 

Excellent comment.

What I fear is being left out of certain social outings because I don't drink and you out it succinctly.

We are the minority but I think our minority is not so small.

I also agree with you that the AA framing turns me off. I wonder when western society will stop seeing people who don't drink as someone who used to have a problem?

I found the perfect hedge: 

I bet $5,000 to win $33,500 that the following Metaculus question resolves YES… 

Bet is voided if resolution is ambiguous. 

Nicely done

Yeah this sucks, and I have no idea how to fix it. 

But if you want top notch information of what's happening at the front lines in SF, follow this twitter account:

Zvi, are you betting your beliefs on Polymarket?

Have you seen the flip of the record cases market in the last three days?

A few ways to hedge that were floating in my head:

Long natural gas futures

Long Brent oil futures

Buy VIX calls

Buy DXY calls

Buy VGK puts

If you use the platform, just link your polymarket address and people can peer to peer you tips at no cost.

Hey Zvi, do you accept tips through Polymarket?

I did not know such a feature existed, say more? You can subscribe to the substack ( or use my Patreon ( if you'd like to contribute. Also considering turning on Twitter tips, which I think would have relatively low fees.

Zvi you got one of your markets:

Nice. Working on getting more. Hopefully it will get more volume once it gets more eyes.

Re: effectiveness of Paxlovid vs Omicron:

Thanks for this. But had to copy and paste. Hopefully LW makes this a hyperlink- []

It stays in the contract until a new mint (called it mint B) happens. Then the 30 day clock begins again. If no new mints happen in those 30 days, then mint B takes 50% of that 50% remaining. 

Well maybe I'm missing something, but the game theory doesn't seem that interesting to me. And calling it a 'return on investment' seems a bit generous for what is really just a game of blockchain chicken. In fact, it might be as crazy as a dollar auction where people might end up bidding more than what half the accumulated contract is worth due to sunk cost fallacy or other irrational behaviors. Either way, you're not really buying anything of value here: you're just betting that the auction gets so little attention that you can walk away with free money, or else you're financing someone else's eventual bad decisionmaking (possibly your own). You say "which in theory should increase the value of every minted NFT so far", but I don't see how. What additional value is added to a previously purchased NFT by someone purchasing the next one? If anything, each incremental minting makes the previous one worthless (unless you ascribe some inherent value to owning an arbitrary NFT). In fact, every NFT in this game is a badge of shame except the one that that wins the pot, and even that one could be shameful if it cost more than the pot was worth. It seems especially insidious that the game perpetuates itself by trying to get people to restart the bidding war again with the other half of the prize pool. You didn't say whether the price of minting resets after half the pool gets claimed, but either way it's terrible: either the price resets and make the next bidding war even more furious and ties up even more people/funds, or it doesn't and makes it more likely that the other half just sits there unclaimed forever because it costs more to mint the bid than you'd see in return, but I don't see how this ever ends well for anyone. On the other hand, one could view this game as punishing greed at a meta level: at first it looks like you get a free 242x return, but at best you realize you've only thrown away $500; at worst you end up much deeper in the hole you tried to dig yo

I assumed that, or derivatives of those commodities. 

Thank you. 

I am inferring that your investing portfolio is 100% in equities and equity derivatives, and it seems that quite a bit of it is in high beta stuff. 

So you combine high beta with derivatives (leverage), and you get a great combination of risk that in the 22 months that you've invested paid off quite handsomely. 

Congratulations, your ability / willingness to bear risk combined with timing has worked. I hope we get to see future updates on your strategy. 

"uranium, copper, lithium, oil" These are commodities, not equities (unless OP meant invested in companies in those industries?)

Can we get a snapshot of your portfolio? 

I am interested in seeing what you hold / held to assess your risk adjusted return. 

You started investing at a time where virtually all real assets beat their mean averages substantially. It was quite difficult to lose money investing in capital markets if you bought in January 2020 and held until today. 

I currently have ~100 positions spread across: uranium, copper, lithium, oil, fertilizer, shipping, Nvidia Google Microsoft Baidu (hedge against short AI timeline), a basket of SPAC/deSPAC commons&warrants (which I bought after the SPAC sector became severely depressed), individual "value stocks" and "special situations" in various other sectors. Most of these were entered within the last few months, and my portfolio looked pretty different before that, but I can't really talk about what I was doing before without risking de-anonymizing myself.

Did you just call me an NPC?

Polymarket is prediction a 65% chance of a cases trend reversal starting on November 10:

That is, a growth in case rate.(79% now)

Has anyone found a good explanation as to why cases decline so rapidly in places where the Delta variant took over? 

Has anyone found a good explanation as to why cases decline so rapidly in places where the Delta variant took over? 

Any reason why not use your reasoning and expertise to put skin in the game? Polymarket has a couple of markets such as this one:

It's certainly not the most efficient market (e.g. there's been no update in the past few days which is clearly wrong), but I think it would be more a distraction than it's worth. Maybe after my apartment closes I can look into such things more seriously.

Zvi, what do you think of this market, given the rise in the delta variant?

No seems like the right side. That requires 3 additional 50% drops within 75 days. Not impossible it happens, but if I had easy liquidity there putting in 2k-3k seems reasonable here. After that the odds get distorted a lot.

Whoa, I always read it as Metacalculus. Editing on both thanks for the heads up.

Previous suggestion on LessWrong suggests that savy uses of PolyMarket don't do that. They would create a Yes/No share pair and then sell the No for a few of 2% of $0.09.

This is true. Polymarket has a couple of tricks to save on fees. 

I don't think that's the case. Having access to an accurate probability about whether the Olympics will tell local hotels about how important it is to have a lot of beds available. It will tell AirBnB whether it makes sense to run ad campaings to get people to rent out their homes for hosting tourists that come for the Olympics. 

I agree with you. Didn't really think of this to be honest!

The problem with doing it on the Ethereum network is gas fees. Even with super low gas fees (~$3), this strategy would cost over$100 to implement. 

I agree that doing this on Polygon / Matic is not ideal, as it is a sidechain / quasi L2 solution that sacrifices decentralization for speed and cost, but for illustration purposes, it works. 

It takes ~40 mins to bridge Ethereum from the Matic network to the Ethereum mainnet, 

ah yes, the proof of stake bridge is faster. i guess it depends if you're running this strategy with size. e.g. for over $100,000, 10% returns means you'd earn back gas fees in ~3 days.

This write up is a good complement to this post:

I am excited to go to the US in July to get my shot. 

Where I live, my age group will be eligible sometime in September. Might as well make a vacation out getting vaccinated. 

What do you say about the behavior of those of us who had COVID 6 months ago or after?

Not necessarily. You can have people believe that EMH works in US equities or US Treasuries but not say, US corps. 

But most people in finance that I encountered throughout my career believed that EMH did not worked in any market. 

1Gerald Monroe2y
Another comment: does EMH guarantee market correctness now? Time matters. If you think about it - in fact this takes the shape of a proof: actors in the market with a strategy that is more correct will over time accumulate more assets versus their competitors. Therefore, more of the assets used to buy the security will belong to "well informed, rational actors" and the price will converge over time to the one that "well informed, rational actors" collectively agree on. If this were untrue, it would require over an infinite timescale for irrational, poorly informed actors to statistically win and this is against the definition of (rational, information) It's a convergence.But this doesn't mean it wouldn't take 500 years to eventually stabilize, or that like all control systems, it won't have random fluctuations and overcorrections. Example : classic PID control, where the system does converge on the target value, with an expected average value of the target even if it's over/under damped. Put this way it's hard to understand a world where EMH could be wrong eternally. With that said, in near term views, traders can act to converge the market towards efficient prices, making a profit in the doing. It's just a finite gradient to exploit - every new trader that is using the best available strategy is lowering the profits that can be achieved by the other traders using a similar strategy.

I studied and worked in finance and I don't think I ever met someone who truly believed that the EMH was the absolute truth. 

1Gerald Monroe2y
There are plenty of plausible arguments against various formulations of it. However your statement is somewhat problematic: if someone is in finance, they would have to literally believe that their own actions are pointless in order to conclude that "EMH is the absolute truth". Few people have the lack of ego to properly consider that hypothesis.

Thank you for your response!


I have made some changes to the original post regarding your nitpicks. I agree with them. 

I also appreciate your in depth breakdown of all of my sections, I think the community here will appreciate your detail follow up / counters to my post. 

I am trying to think of a way to edit my post so that it is more clear that I use USTs and risk free rate interchangeably. 

Solid primer. It is hard to really simplify this subject but I think you did a decent job.

I think so too. I found this to be a useful introduction to lots of interesting things at exactly my preferred level of technical detail. I even like the level of technical level of your links.
Thanks! I literally didn't know how any of these things worked a week ago so I'm glad if more knowledgeable people approve.

I remember how much it irritated my advanced investment finance professors that variance and volatility were used interchangeably. 

But even in the whitepaper the CBOE uses the term volatility. Considering the simplistic nature of the post, I will add a footnote to make the definition more clear. 

Thank you. 

Regarding prediction markets, have you seen this piece by Vitalik?

I had. Somehow I read it as someone who Vitalik motivated to do this, rather than Vitalik himself, presumably Vitalik doesn't care about 50k but it makes sense he'd care in theory anyway. My takeaway was that there's a lot of things to be nervous about when betting even on an event that already happened, and that this was a pure supply-and-demand issue where people who knew the election outcome still had to overcome several risks and make it all worth doing, and you wouldn't do that in these ways for less than ~10-15% return minimum, and the other side had people who believed false things and were thus price insensitive. If anything the failure to see more divergence in markets due to these issues is the thing that needs explaining. If I'd had access to FTX I would have considered doing some of this trade, perhaps quite a lot in dollar terms if liquidity was there, but no way I'm going to get involved in several layers of smart contracts in order to collect this little of a payoff. I don't trust it.

I came in here to say leverage. There are options outside of margin lending that are interesting to explore, such as: 

Investment Loan (Although the rate is similar to that of a margin loan)

Home Equity Line of Credit (Cheaper than the above)

Borrowing to re-investing and pledging your assets as collateral has been used for decades by wealthy investors to increase their return. 

Box spreads. [] That's still margin though. Leveraged ETFs. Leverage is very important for maximizing returns, but too much is counterproductive. Sometimes even 1x is too much, or even 10x is not enough. The right amount is the Kelly fraction and it depends on the payoff distribution of your strategy, which you can only estimate. This is mostly what I was getting at in How to Lose a Fair Game []

Yeah I didn't write about the gamma squeeze because I wanted to keep the length of the post short. But you bring up an excellent point. 

I agree with you, but that goes beyond the scope of my intention when writing this post. This post was meant to be as elementary as possible. 

I saw it and sent it to my Canadian friends. They really appreciated your update. 

While I concur with your conclusion, I fear that if mainstream media presents the results like you did in this post, it will create a perverse incentive. 

I posted the UK press release in my social media and immediately folks started saying that they should try to catch it in order to get immunity. 

That seems to me like a reasonable response to the incentives they currently face.

Is it possible to make this a standalone post? This is fantastic information. 

Prompted by your comment, when I wrote more stuff last night, I made it standalone: COVID CANADA JAN25: LOW & SLOW [HTTPS://WWW.LESSWRONG.COM/POSTS/DF6BZTFRG83Q9HJGB/COVID-CANADA-JAN25-LOW-AND-SLOW]

Agreed on both comments. Hopefully the pre-print is more clear

Interesting report on reinfections came out today. 

"PHE scientists working on the study have concluded naturally acquired immunity as a result of past infections provide 83% protection against reinfection, compared to people who have not had the disease before. This appears to last at least for 5 months from first becoming sick."

2 of the 44 reinfections are 'possible' reinfections and the other two are only 'probable.' So my presumption here is that we had zero cases of reinfections that caused serious illness, since none of them were even confirmed. So...
Which, because you only get five (or ten) words [], shows up on the headlines as "Past Covid infection gives 5 months of immunity, study suggests". I expect many will read just the headline, and start to claim that it is known [] that past Covid infection gives exactly 5 months of immunity, and this will become the commonly remembered message going forward.

Great answer. Thank you. 

I hadn't really thought about Trump resigning, but I don't believe the odds of that happening are anywhere near 20%. 

The question of self-pardon being upheld vs the likelihood that he can resign and get Pence to pardon him is key. 20% seems high, but he's notoriously hard to predict.

Great post as usual. 

I just want to update you that my sister got the first jab in UAE on Tuesday. She's in her late 20s and works from home. Literally last in any vaccine priority list. 

She walked in first thing in the morning, walked out in less than 20 minutes. She will be back on the 26th for her second shot. 

Do you mean the final graph? The black line shows the mean of previous crashes, not 2020; I'm just superimposing 2020 dates on this to show how prices historically continued to rise from this point and so might do so this time. (The fact that prices have already recovered in 2020 may seem like a sign of 'returning to normal', but according to the EMH prices have no memory so it shouldn't reduce the chance of them continuing to rise.) I've reworded the post to clarify.
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