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S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
261–270 of 524 posts
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#262I wonder if Elon would now reconsider IPO.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#263Stocks and money. It's so boring. I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano. Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
Stocks and money should be boring for most people. I'm not a financial adviser and this isn't financial advice but I believe no one with a net worth less than $2m should ever buy an individual stock. Invest in a target date retirement fund for your 401k. Same for Roth Ira. If you have more money to invest after that, invest in an index that aligns with you values (for example I invest in an ESG index for environmental, social, and governance, ie no weapons or drugs). I've kept my money boring for over ten years and my boring investments have over tripled in value. I consider it a point of pride that I don't know what the DOW is at or how much NVIDIA is trading at right now.
It always boggles my mind when someone who is middle to maybe upper middle class tries to time the market or buys/sells stocks in reaction to random news like this. At best you're going to be up maybe 50% on this trade, and you're going to pay commission to your broker, and may even need to pay taxes. At worst you're going to be down a lot and still pay the broker.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#264Earlier quoted context omitted.
My personal photography blogging business has a market cap of a trillion dollars too. I have 1 trillion shares, and I sold 1 to a mate for a dollar. Total company revenue is like 50 bucks a month and profits are nil. Can I be in the S&P 500 too?
Anthropic has raised $130B. It's a bit more than selling a share to your mate for $1.
Is it when X is clearly engaging in creative financial engineering with a goal of maximizing their value.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#265Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
I’ve moved my S&P 500 investments to the Equal Weight index to reduce my exposure to AI. Quite aside from SpaceX, I think the large-cap tech companies are making some uncomfortably large bets on AI and any major upset could cause a domino effect. But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20%…
> As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me.
If the SEC was doing it's job, there would sanctions or jail time for those numbers.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#266Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted. Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
> the same passive strategy they always have You'll be shocked to know they have changed the inclusion rules a number of times. I suspect if in 12 months these megacaps are still megacaps, they will revisit the profitability rules. It's hard to have an index with 500 of the largest, most significant companies leaving out companies with trillion dollar market caps.
Seasoning and profitability rules are why S&P does not have as steep of a drawdown or as long as a recovery as Nasdaq over the last 30 years of market performance.
The S&P recovered from Dotcom bottom in ~7 years while the Nasdaq-100 took 15 years. Likewise Nasdaq took 3.5 years and the AI hype to recover back to its COVID highs in 2024 while S&P had the same recovery in about 2 years.
This is the downside to Nasdaq having higher returns in tech bull markets.
So the indices have a very different volatility profile by design, we should be happy to have the choice rather than have them all converge to the same product.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#267Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
They weight by free float so it would been something like 0.3%. Hardly the end of the world
Me losing $500 to Musk’s clever idea is still me losing money. It isn’t like this is a normal market event.
If it is not the end of the world, cover my losses.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#268Earlier quoted context omitted.
> They weight by free float so it would been something like 0.3%. Hardly the end of the world That's one way to look at it. At a personal level, it's a small sliver and if it were to drop, its influence on your balance isn't much. So that's true. Another way to look at it is that with ~200 million people owning index funds, all their funds balances together, even a tiny fraction of a percent is a massive amount of mo…
Are you sure he doesn't need it? People are saying SpaceX has six months to bankruptcy.
Such is life.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#269Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
> I was planning to move to an equal weight index but this gives me a little more time to evaluate options. S&P requires 4 consecutive profitable quarters, amongst other requirements, so if one of the new mega caps like SpaceX or Anthropic or OpenAI get included, you’d probably want to get the benefit of their performance. Put differently, if one previously specifically picked an index fund that is not equal weighted…
> you’d probably want to get the benefit of their performance.
What performance? None of these companies have established "performance" and they are all still burning money in a race to be the industry leader.
There is no evidence these companies can be profitable without some kind of significant hardware advance.
Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
#270Earlier quoted context omitted.
> "Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet." Amazon wasn't profitable because it reinvested earnings into growth, while SpaceX is funding it's growth by taking on very significant levels of debt (which will take a big chunk of future earnings just to service). These aren't comparable from a risk perspective.
> Amazon wasn't profitable because it reinvested earnings into growth Was this obvious early on?
Yes, every time there was discussion about Amazon not being profitable it was discussed.