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Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

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Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#741

Post by DanielHB »

f6v wrote: post #721
DanielHB wrote: post #682

Earlier quoted context omitted.

I don't know about your country, but in Sweden you can choose where part of your investment money (I think 40%) gets allocated. On top of that you can choose where 100% of your private pensions are allocated. Also some EU pension funds are already in the process of divesting from US markets...

> Also some EU pension funds are already in the process of divesting from US markets... And where will they go to?

I mean, the US public markets is about 49% of the worlds market so it is not like there aren't other options. Divesting doesn't mean moving everything out and pension funds also invest in non-public markets.

https://www.visualcapitalist.com/124-trillion-global-stock-m...

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#742

Post by cmrdporcupine »

testrun wrote: post #86
joegibbs wrote: post #75

Anthropic at $1t for an IPO vs Google at $23b in 2004 sounds insane but Google's revenue at the time was $2.7b while Anthropic's already at $47b, so a valuation at about 20x vs 10x revenue. Anthropic also has very high revenue growth (50x since 2024), it doesn't seems quite as insane as it could be.

That is revenue. What is the net profit?

I suspect the answer is: in the future after Moore's law somehow inevitably does its thing.

That has worked in the past for tech infrastructure, so there is clearly a gamble that it does that again here.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#744

Post by jmuguy »

mawadev wrote: post #727
jillesvangurp wrote: post #535

Maybe to counter some of the apparently widely expected doom and gloom: - bubbles are notoriously unpredictable and generally don't happen when they are loudly and widely proclaimed to happen any minute now. - large scale infrastructure spending tends to be really good for economies. These three companies are creating lots of jobs that are mostly related to construction, energy infrastructure, hardware spending, etc.…

I have no crystal ball, but I feel uneasy when they change basic rules about indizes right before these IPOs. There are a lot of retirements on the line just by this fact. Maybe big tech gambled too close to the sun and found a way out? Whether something pops or not, it leaves a bad taste in my mouth this can be done so easily, don't you think?

This is it entirely. I don't really care if the pessimists or optimists or somewhere in between ends up being correct. What possible reason is there to change the rules around the indexes unless these companies and their backers know that time in the market is going to expose that they're overvalued and they want to force someone else to be holding the bag when that happens.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#745

Post by root-parent »

augstein wrote: post #105

For SpaceX (and possible the others): Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. From https://x.com/Hedgeye/status/2060435253928604065 : "Rule changes for the SpaceX $SPCX IPO: Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5. This forces over $30 trillion in passive 401k a…

https://news.ycombinator.com/item?id=47613231

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#746

Post by rjh29 »

cj wrote: post #729
gitfan86 wrote: post #704

Earlier quoted context omitted.

This fundamentally misunderstand the point of an index. The fundamental reason S&P 500 exists is to let people buy the entire market ( the top 500 companies make up most of the entire market ). That is it. Period. They are not saying these 500 companies are going to be the most successful in 6 months or 10 years. At one point Enron was 0.6% of S&P500 because it was a large company, not because the directors at S&P500…

> The fundamental reason S&P 500 exists is to let people buy the entire market And why do people want to buy the entire market in the first place? They want to diversify and insulate themselves from a single company crashing their portfolio value. What are people afraid of right now? They're afraid of a single company crashing their portfolio value. Why are people afraid of their portfolio value crashing? Because the…

The problem is people equating S&P 500 with "set and forget" investment when that's never what it was. It's an index. You're not paying anyone to balance it with a particular risk profile.

There are indexes that invest equal amounts of money into all companies, so Nvidia doesn't dominate. Or you can pick low growth high dividend indexes to insulate against AI. Or just grab Vanguard LifeStrategy if you don't want to think.

The current situation is unusual. No index can handle all situations. Either adapt or use a fund that does the thinking for you, right?

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#747

Post by rjmunro »

kelnos wrote: post #468
bradleybuda wrote: post #371

Earlier quoted context omitted.

Not buy these index funds. If you don’t want to own the entire market, don’t buy funds that seek to own the entire market. Funds like ESGV which exclude companies with poor governance have existed for a very long time - I can’t find a clear answer as to whether or not it will buy SpaceX, but I’m sure you can find funds that cater to your desires.

The problem is I'm already in a S&P500-tracking ETF, for a decently large amount of money. Selling it off would be a big taxable event for me, something I don't want to do.

Could you use a prediction market (or Spread Betting in the UK) to hedge against your ETF loosing money during the period? If the ETF lost value, the hedge would gain it back and vice versa. You wouldn't need to sell the ETF and you'd only be liable for tax on gains from the prediction.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#748

Post by irishcoffee »

SlinkyOnStairs wrote: post #650
iLoveOncall wrote: post #481

Earlier quoted context omitted.

No, it's wrong. Amazon is worth $2.81T right now and only represents 4.03% of the S&P500. So a $1T share would represent less than 2% of the S&P500. This is significant for a single company, and 6% for 3 shit-tier companies (SpaceX, OpenAI and Anthropic) is even more significant, but we're far from "losing retirement if they go bust"-levels.

You're not modelling the contagion here. The problem is that while any single one isn't that big a share of the S&P 500, similar companies do make up a lot collectively. Excl some non-tech/AI firms: NVIDIA Corp NVDA 8.02% Apple Inc AAPL 6.53% Microsoft Corp MSFT 4.84% Amazon.com Inc AMZN 4.01% Broadcom Inc AVGO 3.36% Alphabet Inc GOOGL 3.32% Alphabet Inc GOOG 3.09% Meta Platforms Inc META 2.23% Micron Technology Inc…

I wish I could upvote this more. This is the point. Everything is so incestuous now that the problem isn't 2% here or 3% there, it'll be a catastrophe of epic proportions.

I do not want things to go kaboom, the CAPE index seems to indicate that what I want isn't relevant.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#749

Post by cj »

rjh29 wrote: post #746
cj wrote: post #729

Earlier quoted context omitted.

> The fundamental reason S&P 500 exists is to let people buy the entire market And why do people want to buy the entire market in the first place? They want to diversify and insulate themselves from a single company crashing their portfolio value. What are people afraid of right now? They're afraid of a single company crashing their portfolio value. Why are people afraid of their portfolio value crashing? Because the…

The problem is people equating S&P 500 with "set and forget" investment when that's never what it was. It's an index. You're not paying anyone to balance it with a particular risk profile. There are indexes that invest equal amounts of money into all companies, so Nvidia doesn't dominate. Or you can pick low growth high dividend indexes to insulate against AI. Or just grab Vanguard LifeStrategy if you don't want to t…

People use the dollar in business becaUse its a stable currency.

If the US does something to destabilize the dollar, will economists be running around saying “the dollar was never intended to be used for that purpose!”? No.

It doesn’t really matter if the index “wasn’t supposed” to be something it became. The problem is the same. The only difference is who you blame.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#750

Post by bigfishrunning »

Arn_Thor wrote: post #570
hliyan wrote: post #471

Earlier quoted context omitted.

I've been told the following (obviously negative) narrative. Can someone verify/refute some of these? I've put (?) next to questionable claims. 1. Twitter is purchased with debt 2. Debt is transferred to xAI via acquisition of X/Twitter 3. Debt is further transferred to SpaceX via acquisition of xAI 4. SpaceX IPO offered at extreme valuation 5. Index fund inclusion rules waived for SpaceX IPO: profitability requireme…

> 7. Index fund managers are not incentivized to exclude a SpaceX from their indexes. (?) Correction: index funds don't have a choice. They must follow the index, and so must buy the stock. side effect: they'll have to sell other stocks, pushing their prices and weighting in market cap weighted indexes down. > Passive investors are unable to rapidly respond to these types of changes because liquidating portfolios wil…

But surely the managers of those pension funds can see this happening, and will not likely take on the risk of shares that are that young, no? The index funds hands are tied, i agree, but passive retirement funds are largely managed by people who are motivated for them to succeed. If this were not the case, then pension funds could have been looted long ago...
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