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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?

#901

Post by Arn_Thor »

SilasX wrote: post #819
Arn_Thor wrote: post #570

Earlier quoted context omitted.

> 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…

>Correction: index funds don't have a choice. They must follow the index, and so must buy the stock. 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 incl…

I'd be in line to buy today!

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

#902

Post by dragonwriter »

PaulDavisThe1st wrote: post #869
HWR_14 wrote: post #852

Earlier quoted context omitted.

6. Pension funds tend not to exclusively hold index funds. Individual retail investors do in their 401ks or personally. Pension funds tend to be fairly sophisticated and can easily insulate themselves from SpaceX/OpenAI/Anthropic if they want either by owning index funds and shorting the other companies or by not purchasing the stock. Also, pension funds are immune to (9) as taxes are handled differently for them. 7.…

> can easily insulate themselves from SpaceX/OpenAI/Anthropic if they want either by owning index funds > ETF managers that track an index aren't allowed to put discretion into what they buy. I detect a contradiction here.

Pensions are not ETFs, they are very different purchasers of securities. Pension funds are sometimes referred to as relatively passive investors, but even to the extent that there may be a sense where that is accurate, they are not the same kind of passive as ETFs. They do actively make decisions about what to invest in and alter those with changing curcumstances, and they do at times actively engage with the governance of the firms that they directly invest in (and they definitely engage about the governance structures, in part to manage risk and minimize the need to engage with governance details.)

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

#903

Post by [deleted] »

andrepd wrote: post #873
0xbadcafebee wrote: post #784

Earlier quoted context omitted.

Here are some options for pre-tax retirement funds (ex. 401k): 1. Exchange your market-cap funds for S&P 500. Afaict, even with their own rules changing, they will wait up to 6 months (as opposed to 12) to let SpaceX in. This is the simplest solution that buys you time without losing other gains in the market, assuming your existing funds were broad market-cap funds. The idea here is to wait for ~5 months and see if…

Thanks, but if wanted to ask chatgpt we would

[deleted]

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

#904

Post by tristanj »

Zigurd wrote: post #878
tristanj wrote: post #823

Earlier quoted context omitted.

Several issues: 1) The short lifespan is intentional. There is no reason to keep satellites beyond a few years because older satellites quickly become obsolete. The first generation Starlink sats are now 4 generations old, and are practically ancient at this point. SpaceX wants older satellites to fail, so they can be replaced by updated ones. 2) SpaceX could easily increase the lifespan of Starlink satellites to 10-…

Instead of using a DeLorean, you asked FSD to drive you to a future where all of Elon's promises come true. By what decade will starship have 100 ton proven payload, and be reusable without lots of expensive refurbishment? One thing that isn't going to happen is to magically extend the life of low Earth orbit satellites. You can have low latency, which you need for a telephone network, or you can have long lived sate…

Queries:

1) Why does Starship need to launch a 100-ton "proven" payload? Starship has already demonstrated it can launch dozens of Starlink v3 satellites into space.

2) Starship already has the heaviest payload and lowest cost-to-orbit of any launch vehicle ever, at $400/kg to orbit in its current fully expendable configuration. Why does it need to "be reusable without lots of expensive refurbishment" to show it's a success?

Even $400/kg to orbit is largely exaggerated; it assumes Starships are hand built and not mass manufactured, and also assumes no booster reuse, which was already demonstrated.

3) What do you define as "low latency, which you need for a telephone network"? The conference app Zoom requires below 150 ms latency, and recommends below 50ms latency. Starlink latency at its current altitude (~500km) typically ranges between 25 ms and 45 ms. Future satellites will orbit at ~330km, which will reduce latency further.

4) Why are "low latency" and "long lived satellites" mutually exclusive? My understanding is this is a adding enough propellant to a satellite, will make it long lived.

5) How can I get a small site with wireless backhaul for $10k? The lowest costs I see online are $20-30k.

6) You do realize the cheapest cellular backhaul sites at that price point are powered by Starlink? I.e. it's cellular equipment attached to a starlink terminal.

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

#905

Post by 383toast »

wrsh07 wrote: post #862
testrun wrote: post #86

Earlier quoted context omitted.

That is revenue. What is the net profit?

Net profit is the wrong metric for high growth companies. You want the unit economics. If the unit economics look great (my understanding is they're at least fine-to-good), then they should not be taking profit because it is very much in their interest to do capex to grow their capacity so that they can continue to grow. It's a knife's edge because if they invest too aggressively it could lead to bankruptcy, but so f…

unit economics aren't great for anthropic are they

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

#906

Post by 0xbadcafebee »

andrepd wrote: post #873
0xbadcafebee wrote: post #784

Earlier quoted context omitted.

Here are some options for pre-tax retirement funds (ex. 401k): 1. Exchange your market-cap funds for S&P 500. Afaict, even with their own rules changing, they will wait up to 6 months (as opposed to 12) to let SpaceX in. This is the simplest solution that buys you time without losing other gains in the market, assuming your existing funds were broad market-cap funds. The idea here is to wait for ~5 months and see if…

Thanks, but if wanted to ask chatgpt we would

1) You didn't ask 2) The guy who asked didn't say "make sure you don't use any tools to research answers to my questions, I only want unverified human ignorance", in which case I wouldn't have replied 3) The advice is free, you're free to ignore it

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

#907

Post by mtoner23 »

chii wrote: post #436
FriedPickles wrote: post #384

Earlier quoted context omitted.

The money still comes from somewhere. In this case, those index funds will be forced to trim holdings of other companies. So it's cannibalizing other parts of the stock market.

which, if true, would make an arbitrage opportunity for a fund that explicitly excludes these high valuation targets but buys those trimmed companies (because for trimming to have happened, they must've been sold unwillingly and thus must be under-priced).

A fundamental misunderstanding of index funds and what an arbitrage is

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

#908

Post by kybernetikos »

bluGill wrote: post #680
Arn_Thor wrote: post #570

Earlier quoted context omitted.

> 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…

> Correction: index funds don't have a choice. They must follow the index, and so must buy the stock. Maybe, most indexes do not have to follow the index. they just need to match the returns. An index fund manager has choice of what stocks to buy. However an index fund doesn't have enough managers to make many choices and so they normally buy just what is in the index. However all index fund managers know they are la…

> Maybe, most indexes do not have to follow the index. they just need to match the returns.

This is a great technical point, and in a scenario where a constituent has a lot of obvious correlations it might be relevant, but when you've got something that is effectively a meme stock with erratic leadership and a huge range in possible outcomes from bankrupt to most valuable company ever in the universe [claude tells me I should say 'idiosyncratic returns' instead of this rant], I don't see how you promise to match the performance of an index where it's a significant component except by buying it.

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

#909

Post by supertroop »

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…

I’m an index investor. I still need to sell to see the gains. So that’s a tax penalty. What am I missing?

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

#910

Post by supertroop »

wrsh07 wrote: post #766
mawadev wrote: post #727

Earlier quoted context omitted.

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?

> There are a lot of retirements on the line just by this fact 1) I would expect anyone close to retirement to have a fairly balanced portfolio. 2) if they don't include SpaceX and the stock does >10x in the next year, they'll end up doing terribly on the benchmarks. SpaceX is big, but if they invest early, it won't be a ridiculous % of the portfolio. Even if one overpays by 2x, since it's under .1% of the total port…

No cfpa would claim #1. At retirement you are not balanced, you are in low risk funds or bonds.
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