X-Message-Number: 10830
Date: Tue, 24 Nov 1998 11:28:09 +0100
From:  (John de Rivaz)
Subject: Re: Trust-Funds

Thomas Nord <> wrote about trust funds.

The real difficulty I see is that most managed trust funds have the 
following disadvantages:

1. There are fees to pay to managers, which rise with the inflation rate for
   professional services (which is higher than average inflation)

2. There is a very non trivial fee to set them up if a trust is written just
   for one person to use.

3. Often it is difficult to direct the application of the funds to
   particular sectors which must rise if cryonics is to succeed.

4. Off the peg trusts can be cheaper to set up and run, but they often pay a
   miserable 3% or so as against much higher rates of growth acheivable by
   direct investment in well chosen technology equities. Over recent years  
   rates of return as high as 90% have been quoted. I have observed 50%,    
   and indeed the long term stock market average is 12.5%. 3% - PAH!

It has been said that it would be very difficult to direct a trust from a 
cryocapsule by demanding that the money be kept with the same companies. 
Someone doing this in the 1930s may have suggested General Motors, for 
example. This did do well for a time, but he would never have considered IBM 
or Intel, because they did not exist.

However there is an answer to this: Mutual Funds (or Unit Trusts in Europe). 
A unit trust can be devoted to a particular sector and the managers will do 
the best to maximise growth within that sector. Needless to say the best 
performers are technology trusts (or general growth trusts whose managers 
have by chance selected a lot of technology companies). If technology is to 
advance enough to make the reanimation of cryopreserved patient into good 
health possible, then such unit trusts or mutuals will grow phenomenally 
over periods of 60 to 100 years. If I am wrong, then no one investing in the 
hope of reanimation will ever know.

The high costs of running a reanimation or other specifically unusual trust 
are because society is structured so that people can claim these costs. In 
some countries, such people have to be members of gangs or cartels otherwise 
known as professions, but there must be some countries where this is not so. 
Other more reasonable costs could be due for the need to manage stocks. 
However a unit trust or mutual fund has this incorporated within it. The 
cost to individual unit holders for highly paid skilled management is quite 
small per unit held.

Bearing in mind that all the manager of a cryonics reanimation trust 
investing in unit trust or mutual funds has to do is to be there to fulfil a 
legal requirement - the actual work is done within the structure of the unit 
trust - it ought to be possible to get someone from within the cryonics 
community suitable qualified to volunteer his services for free.

We need a vehicle where people can put in say $1000 which will be earmarked 
as being his contribution to the reanimation fund if he is reanimated, and 
the whole reanimation fund is invested in a suitable unit trust or mutual 
fund. At the most conservative 12.5% $1000 would grow to over a million 
dollars in 60 years. I will leave it as an exercise for readers to work out 
what it would be at 30% per year (more likely if revivals do turn out to be 
possible.)

All existing ideas suffer from two problems that I see.

1. They result in funds being invested at around 3% or failing that in    
   yesterdays' stocks.
 
2. They are structured so that large initial deposits have to be made, eg
   $25k at least.

There is a very serious problem with item 1 in that assuming I am correct 
about technology growth, the money has to come for somewhere. That somewhere 
is a fall in value of "conventional" stocks, eg hospitality. Indeed the 
recent stock market turbulence has been seen as a fall in these stocks in 
favour of technology stocks. Intel and Microsoft, and the pharmaceutical 
majors, for example, fell very little. The market is recovering now with 
substantial rises in these aforementioned stocks pushing the index up, 
rather than recoveries in more conventional enterprises.

The problem with item 2 is that people investing all or most of their 
savings very correctly will seek professional advice. Any professional 
looking at reanimation funds will scratch his head and say he has to look 
into it. A few thousand dollars and perhaps a year or two later, he will 
advise his clients not to proceed. That is the safest option for him. If he 
says go ahead, and there is any problem, then he can be held accountable.

If on the other hand people can invest into a reanimation fund with a small 
part of their savings, then they can afford to take a chance based upon 
their understanding of the issues and their trust in the managers, and not 
go to a professional. In this case the managers will be fellow cryonicists. 
Unless the manager are not suspended, they will be held accountable, even if 
hundreds of years into the future.

I know I have written along these lines before. I hope that this time I have 
incorporated some of the objections raised and provided answers. Maybe this 
time there will also be objections, but one day this sort of "reanimation 
investment product" will appear, that I am sure of. 

-- 
Sincerely,     * Longevity Report:  http://www.longevb.demon.co.uk/lr.htm
John de Rivaz  * Fractal Report:    http://www.longevb.demon.co.uk/fr.htm
**************** Homepage:http://ourworld.compuserve.com/homepages/JohndeR
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        because giving information does not decrease your information.

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