From: Eliezer S. Yudkowsky (sentience@pobox.com)
Date: Thu Dec 30 1999 - 23:13:51 MST
Max More wrote:
>
> As John said, *some* stocks are ludicrously overvalued. Even with those,
> there can be reasonable disagreements about overvaluation. Market cap
> reflects the discounted current value of all future profits--a matter of
> judgment and perspective. No one really *knows* whether Amazon will never
> turn a profit or will more than justify it's market cap.
As I see it, there are two possible explanations for the current market
situation, which are not mutually exclusive.
The first explanation is that the rise of the Net has created the
ability for vast numbers of uninformed and inexperienced investors to
rush in and gamble their life savings on dot-coms, creating a stock
bubble similar to that existing at the end of the 1920s.
The second explanation is that America's surplus wealth level has
reached the point where peculiar phenomena begin to arise, money flowing
in ways that have nothing to do with the laws we understand. Enough of
this money happens to be creating new wealth that a self-sustaining
effect has arisen, a standing wave of money, which can continue indefinitely.
-
I don't view it as a branch of Singularitarianism, but I can describe
several different ways to set up locally efficient systems that have the
global effect of automatically discovering and exploiting
positive-feedback effects, i.e. opportunities to use wealth to create
more wealth. Even the ubiquitous use of probabilistic spreadsheets
(that is, this is what my company *could* produce given the following
range of resources), combined with enough openness to create global
computer simulations, would suffice.
(What intrigues me is whether (1) effects can be set up to maximize
productivity rather than wealth, whether (2) a productivity-maximizing
system can be set up which prevents the development or at least the
spread of poverty pockets, and - this *is* a Singularitarian issue - (3)
whether an economy can be developed that can deal with presumably
AI-born or nano-born "ultraproductivity" without leaving everyone
unemployed, or creating undesirable concentrations of power. I'm
willing to take a shot at (1) and (2), but I don't see any way to deal
with (3) as yet.)
But I don't see any of these New Economy effects at work; if anything
similar is happening, it's well hidden. Hence my doubts.
You are undoubtedly correct in that, having been predicting a crash
since 1994, an actual crash would not reflect any wisdom on my part.
> Eliezer, given your way of thinking, I'd suggest investing the mechanical
> investing screens, such as the ones on the MI board at the Motley Fool, or
> Jon Markman's at MSN Moneycentral. This is a great time for tech investing.
> It would be too bad for transhumanists to have a deep understanding of
> technological trends but to miss out on building wealth with that knowledge.
I'm not likely to be investing any time soon; remember, I *am* only twenty.
--
sentience@pobox.com Eliezer S. Yudkowsky
http://pobox.com/~sentience/beyond.html
Typing in Dvorak Programming with Patterns Writing in gender-neutral
Voting for Libertarians Heading for Singularity There Is A Better Way
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