811–820 of 1001 posts
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This should be a 5 alarm fire. It reminds me of nothing more than organized crime rackets that targeted control of union retirement funds
This should trigger all of us to be spinning up lawsuits. This whole thing is an absurd grift.
On what grounds? What tort have you suffered?
If you want change (and who wouldn't?) you need to talk to your representatives, not the courts.
Is there an index fund that intentionally only focuses on actually profitable companies? It would actually be nice to hedge some funds into non speculative assets.
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.…
Thats not true. For the dotcom bubble people loudly and widely proclaimed them for a couple years until the narrative changed to "I guess this time is different?" ... and then it popped.
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This should be a 5 alarm fire. It reminds me of nothing more than organized crime rackets that targeted control of union retirement funds
>This should be a 5 alarm fire. Only for people that get their news from reddit. Initial public offerings whose market capitalizations rank within the Nasdaq 100’s top members will normally be eligible to be included after 15 days of trading, Nasdaq said in a statement. The timeline is shortened from at least three months currently. “Industry professionals, including asset managers and institutional passive portfolio…
This is why non partisan financial institutes like the FED and consumer protection groups like the CPB are important and we should have them as non corrupt and robust as possible.
Because it just doesn’t seem wise to trust asset managers with these kinds of things without a lot of evidence and transparency. The 2008 crisis should have taught all of us that much.
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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.
I've recently learned a new finance term, "float", and I want to check if this makes a difference to this discussion? https://en.wikipedia.org/wiki/Public_float I hear S&P 500 is weighted on float rather than on market cap, while Nasdaq 100 is based on market cap.
> most share indices weight firms in proportion to the value only of shares they have released for public trading (the “free float”). For SpaceX, this means just the $75bn or so of stock it intends to issue in June—so its initial weight in the S&P 500 will be around 0.1%. The NASDAQ 100 is an exception, and has changed its rules to weight companies at up to three times their free float, in an apparent effort to woo Mr Musk. Even so, SpaceX’s probable initial weight in this $40trn index will still only be around 0.5%.
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> then they have to deal with their index funds, ETFs, mutual funds, pensions, 401ks, etc buying up overpriced stocks Only about a third of American stocks are held by passive capital [1]. Out of that, index funds are about 16%, and most of those in America reference the S&P 500, which has not yet announced whether it is changing its rules. [1] https://alexchinco.com/double-what-you-think-it-is.pdf
Sure, but it's the Americans that can least afford to be stood up as exit liquidity that have the most exposure here relative to their net worth. The ultra wealthy are going to be heavily overrepresented in the active basket. Meanwhile the folks lower down on the income scale are more likely to have their money in passive funds.
Do you have evidence to substantiate this claim? My brief research has shown the wealthier the investor, the likelier they are to use a passive strategy.
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Because they lobbied for a rule change to get fast tracked to an index forcing passive investors to buy it at IPO price instead of being included after market value corrections.
This is completely wrong. Passive funds don't buy at IPO price. They buy after the inclusion rebalance which happens weeks later, at whatever price the market has already set. Plus the S&P500 rule change hasn't even happened yet, it's unclear if the rules in the current form will go through.
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> Are you actually optimistic? Not particularly. When I posted the request for comment to HN it got crickets [1]. Not enough people care about this. And the "safe" option has kind of shifted with the other index providers having moved first. That said, there were a lot of proposals and I'm not expecting all of them to be adopted. [1] https://news.ycombinator.com/item?id=48054324
There's no obviously correct answer here.
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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…
Right, if they've advertised as an S&P 500 index fund, they have to robotically follow the S&P 500, stupid inclusions and all. Changing that strategy would require ... a lengthy process involving input from shareholders.
However, someone can still start e.g. a "classic S&P 500" fund that follows the old rules for inclusion, and I suspect we'll see that in response to these recent decision.
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…