LW - Grief is a fire sale by Nathan Young

Link to original article

Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Grief is a fire sale, published by Nathan Young on March 4, 2024 on LessWrong.
For me, grief is often about the future. It isn't about the loss of past times, since those were already gone. It is the loss of hope. It's missing the last train to a friends wedding or never being able to hear another of my grandfathers sarcastic quips.
In the moment of grief, it is the feeling of disorientation between a previous expected future and what the future looks like now. I can still feel anticipation for that set of worlds, but it is almost worthless. And it is agony, a phantom limb.
One of my closest friends and I no longer talk. I don't want to get into why, but we were friends for about 10 years and now we don't talk. This is one of the echoing sadnesses of my life, that the decades ahead of us are gone. The jokes, the hangouts, the closeness, they won't happen. It's a bit like a death.
Loss comes in waves. Many times I grieved that the world I expected wasn't going to take place. The neurons that fire to tell me to pass on an in-joke are useless, vestigial. I'll never see their siblings again. We won't talk about work. There was no single moment but at some point signals build and I notice how drastically the situation has shifted, that the things I've invested in are gone.
Grief is like a fire sale. It is the realisation that sacred goods have taken a severe price cut. And perhaps selling isn't the right analogy here but it's close. I was expecting to retire on that joy. But now it's gone. The subprime mortgage crisis of the soul.
Eventually I have to offload my grief. To acknowledge reality. Sometimes I don't want to hear that
Last year, I had a large fake money position that Sam Bankman Fried would plead guilty in his trial. I thought this because the vast majority of fraud cases end in a guilty plea. And several people I normally defer to had pointed this out. On base rates it seemed the market was too low (around 30%-50%) rather than where it ought to be (perhaps at 60% - 70%) taking into account SBF's idiosyncratic nature, . The goods were too cheap, so I amassed a large holding of "SBF PLEAD".
But later on I got to thinking, was I really looking at representative data. The data I had looked at was about all fraud cases. Was it true of the largest fraud cases? I began to research. This was a much muddier picture. To my recollection about half those cases didn't plead and those that did pleaded well before the trial. Suddenly it looked like the chance of SBF pleading was perhaps 20% or less. And the market was still at approximately 50%. I wasn't holding the golden goose.
I was holding a pile of crap.
This was a good decision, but I felt stupid
That was a grief moment for me. A small moment of fear and humiliation. I had to get rid of those shares and I hoped the market didn't tank before I did. The world as I saw it had changed and the shares I held due to my previous understanding were now worth much. And in this case it implied some sad things about my intelligence and my forecasting ability. Even in fake money, it was tough to take.
It was similar when FTX fell. I was, for me, a big SBF stan. I once said that he'd be in my top choices for king of the world (offhandedly). I wasn't utterly blind - I had heard some bad rumours and looked into them pretty extensively, I even made a market about it. But as the crash happened, I couldn't believe he would have defrauded the public on any scale near to the truth. I argued as much at length, to my shame1.
The day of the crash was, then, another fire sale. Near certainty to horror to fascination to grim determination. I updated hard and fast. I sold my ideological position. I wrote a piece which, early on, said FTX had likely behaved badly and was likely worth far less than before (the link shows an updated version). The re...