461–470 of 542 posts
Earlier quoted context omitted.
why go that far? herbalife moto is probably "we're a pyramid scheme scam" and they are 45% vs sp500 25% for last 12mo. you'd better of investing scam500 than sp500 nowadays.
Crime pays. But when you go that far, why stop at investing in scams? Surely you can make money faster by robbing old ladies at knifepoint?
Although it’s good they stood by their rules, elsewhere Reuters points out > S&P Global said it would modify entry rules for its broader S&P Total Market Index and Dow Jones U.S. Total Stock Market Index, creating a pathway for SpaceX to join those less widely followed indexes. So not really as principled as it seems https://www.reuters.com/business/finance/sp-global-keeps-fas...
Earlier quoted context omitted.
"Because the index needs accuracy.", and I would argue that include price accuracy not just inclusion accuracy. The S&P is a benchmark that is designed to reflect a subset of the market, and giving only some companies early access to the benchmark changes the benchmark. So if you want a benchmark that's designed to include all the big stocks regardless of age, profitability, etc then go make a new benchmark. The only…
"go make a new benchmark" completely ignores how this works in practice. Benchmarks are only useful because everyone uses the same one, you can't swap it out. The S&P 500 benchmark is used as a comparison for trillions of dollars of mutual funds, index funds, and institutional mandates. The further the S&P 500 strays from reflecting the actual market, the more useless it becomes. Also the S&P criteria have been revis…
Here I once again agree with you in part, and disagree in part.
The S&P 500 should reflect the actual market. That is, the actual market of publicly-traded companies with legal requirements for transparent accounting and reasonable expectations of future positive cash flows.
As you wrote yourself (https://news.ycombinator.com/item?id=48408363), "These [mega-cap IPO] companies will likely never meet S&P profitability inclusion criteria for the next 5 years."
At this point in time, I don't think it's reasonable to expect future positive cash flows from SpaceX or Anthropic. There are indeed some reasons to suspect that there won't be future positive cash flows from them.
Earlier quoted context omitted.
"The inclusion criteria prioritizes companies that extract their cashflow into profit", in almost all cases, yes. But if you want to buy into these newer stocks there are various high growth indices you can buy, no one is stopping you. If you want to buy into only one or two of those stocks then you can. It's a free market for stocks and it's a free market for indices. There's no regulation that says the S&P has to i…
The issue is a contradiction with what S&P 500 claims to do vs what they actually do. S&P 500 claims to be the "best single gauge of U.S. large-cap equities". But if they exclude high-growth no-profit large-cap equities such as (Anthropic, OpenAI, SpaceX) from their index, then S&P is doing a poor job at what they claim to benchmark. It's not not an insignificant oversight. The valuations of (Anthropic, OpenAI, Space…
Right...
> But if they exclude high-growth no-profit large-cap equities such as (Anthropic, OpenAI, SpaceX) from their index, then S&P is doing a poor job at what they claim to benchmark.
So it comes down to a difference of opinion between Standard and Poor's and tristanj. Go make the Tristanj500, include these companies, and make the same claim - "the actual best single gauge of U.S. large-cap equities". No one's stopping you.
Earlier quoted context omitted.
You can add stocks whenever you put money in. Whether that's because you got your paycheck or a dividend or some other income is kind of irrelevant. And you can remove stocks when you take money out. But you probably shouldn't start selling one stock to buy another just because their prices moved, unless you have information that lets you time the market.
But then you wind up with a portfolio that isn't balanced and isn't tracking like an index fund. An index fund doesn't simply buy a flat amount of stock and hold it, they buy stock in proportion to the relative weight of the exchange. Which is always moving
Earlier quoted context omitted.
Also worth noting that other index providers are less principled. > Nasdaq changed its rules recently so SpaceX can join the Nasdaq 100 Index, a cohort of the largest non-financial companies listed on its exchange, in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days
if i had to short 1 of the 3, it would be OpenAI
Earlier quoted context omitted.
The latter has not been proven and the former is pretty normal for business. We will see how it plays out in the court and markets.
The second law of thermodynamics hasn't been proven either, but I'm fairly confident in it. ;-)
Earlier quoted context omitted.
> If a significant percentage of the market is excluded from the index because they don't meet index inclusion criteria, then then index stops being a useful benchmark. So what's the reason for fast entry specifically? If it's a significant portion of the market and will remain so, it doesn't need an accelerated entry. A benchmark should be conservative about new entrants so that it doesn't turn from a market benchma…
> So what's the reason for fast entry specifically? Inclusion in as many indexes as possible is basically the definition of "too big to fail." It's the ultimate de-risk to know that if you fuck up badly enough the government will just give you everyone's money.
Earlier quoted context omitted.
It doesn't conflate anything. The inclusion rules weren't given to us by God, they were created by humans because they thought, rightfully, that people will be interested in that as a product ("prefer"). As the market changes, the product can be adjusted. Lastly, there's no such a thing as a real "market proxy", except the whole market. If you scope any subset of it, you're making some inclusion and exclusion rules.
The S&P 500 is primarily a benchmark index, not a list of approved stocks to invest your 401k into. The GP is conflating the two. GP is claiming there's a subset of stocks that people don't want to invest in, and these should not be included in the S&P 500. Sure. But, per the S&P website, the S&P500 was created as a benchmark of U.S. large-cap equities. On their website, S&P advertises it as "the best single gauge of…
This particular piece is incorrect. S&P has preexisting rules to pick and choose which large-cap equities to follow. They had a discussion about whether to drop those rules in order to become a more accurate benchmark, and they chose to stick with what they had been doing.
Regardless of what they say they were doing (or what they’re trying to do), the fact that they changed nothing means that what they had been doing is the same as what they are doing now, ie, picking and choosing stocks at the risk of diminishing their benchmark capabilities.
Earlier quoted context omitted.
Your question is still not what you're asking. Passive funds do nothing but follow indexes, so what you're really asking is "have value indexes ever beaten the general sp500 index?". And the answer is yes, e.g. both the S&P 500 Value Index and S&P 500 Pure Value Index have beaten the S&P 500 historically. Small Cap indexes, have also *significantly* outperformed the S&P 500 from 1927 till today (a compounded 13.1% an…
No you’re just assuming what I am asking. You have proven my point so thank you. No examples and lots of buts and exceptions. We are probably talking around each other to some degree but that’s ok!
I gave you numbers and names of indexes that have historically beaten the S&P 500 index in the value category.
All of those have one or more ETFs that replicate that index.
There's an extensive amount of scientific literature talking about the outperformance of value and small caps to the broader market, starting from Nobel price winning Eugene Fama.