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S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

arstechnica.com

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Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#461

Post by gymbeaux »

latchkey wrote: post #343
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

Cerebras is a good example here. Largest IPO of 2026 and as of Friday, down 33% from their top and about $15 away from their initial price. CFO was at Bird (a SPAC flop) and CEO was previously charged by the SEC with a felony... for cooking the books. Everyone wants you to believe that a giant wafer is the future (and soon enough layers of wafers), but a P/E of $500, just doesn't make sense for a company selling AI f…

(P/E ratios aren’t expressed in dollars)

So a PE of 500 means it would take 500 years for the earnings of the company to equal the current market cap (price per share X number of shares). This implies absurd (almost certainly impossible) growth over the next 500 years. Of course anyone expecting to pull their investment out and spend it on retirement can’t be looking at a 500-year investment horizon. I suppose the 1% can, though. What the hell else are they going to spend their cash on?

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#462

Post by oakinnagbe »

matwood wrote: post #401
antasvara wrote: post #206

Earlier quoted context omitted.

The commenter is likely referring to the original S&P 90, which mandated a certain number of stocks in different sectors. At the time those numbers were 50 industrials, 20 utilities, and 15 railroads. The breakdown shifted as the economy changed until the 80's when they did away with sector quotas in favor of rules closer to today (basing allocation on market cap). Regardless, the S&P 500 also excludes a company like…

Thank you for explaining. People talk about the S&P rules like they are written in stone. There's so much emotion around these exact companies and not the structural shifts that may cause the S&P to adjust its rules. For example, for a time they banned dual class share companies, which would have banned Google from entering today (they were grandfathered on). A ban which they reversed 5ish years later. They have resi…

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Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#463

Post by mewse-hn »

Ekaros wrote: post #447

Is there any global indexes that include only companies which have been profitable in past? Say with same criteria of 1 quarter with 4 consecutive positive quarters overall? Might lose some gains, but probably also cut away lot of more risky bets.

Something that I don't think is taught enough is that it's very, very difficult to beat the market. If someone is asking you for money and promising that they'll beat the market, alarms should be ringing in your brain. A common ploy is to start up a dozen funds, let them run for five years, then pick the most successful one - look, our fund beats the market! Invest with us! Five years of returns, we're proven! It's a scam. Past performance does not indicate future returns.

This is to say that your idea isn't bad, it's just that if someone had a strategy to beat the market they'd be using it already, and other investors would be looking for a way to screw over that person and leave them holding the bag. That's why passive investments are diverse and fairly low risk - they should ideally track the whole market rather than trying to pick winners and losers. Index funds are good for this.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#464

Post by gymbeaux »

tim333 wrote: post #387
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

These things get checked pretty carefully by humans. They can get sued for fraud. But some of the future estimates can be swayed by hallucinations, both AI and Elon Musk etc. You can also game things a bit like Anthropic is showing better figures just now due to an introductory discount on getting compute from xAI. Those tend to fade out with time.

Sure but there’s no way Enron was the last Enron. Also keep in mind something can be “legal” and still misleading to shareholders. I’m sure there are loopholes, some of which may have been reintroduced by Republicans in the last 20 years.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#465

Post by zajio1am »

abustamam wrote: post #263
danielovichdk wrote: post #16

Stocks 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 environmenta…

> for example I invest in an ESG index for environmental, social, and governance, ie no weapons or drugs

So, no weapons for Ukraine?

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#466

Post by JumpCrisscross »

have_faith wrote: post #189
orwin wrote: post #130

Earlier quoted context omitted.

Which is unlikely considering their obligations. I'm a bit more optimistic about SpaceX (and anthropic to a lower degree), but if free models keep improving at the same rate as frontier models, their won't be any profit from AI.

What’s the time horizon do you think for free models matching today’s SOTA on average consumer hardware? I see people building 6k+ machines to run the best of them at the moment, which are behind SOTA by maybe 6 - 12 months or so right now.

> I see people building 6k+ machines to run the best of them at the moment, which are behind SOTA by maybe 6 - 12 months or so right now

SOTA in open source (frontier Kimi MOE) requires terabytes of RAM. At DDR5 prices, that's $40k alone. For HBM, higher. We're years away from consumer hardware matching the power and latency of e.g. Claude.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#468

Post by oarla »

zugi wrote: post #451
mattbrewsbytes wrote: post #274

Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out. I do wonder if any of these three companie…

> using AI to do their accounting and bookkeeping A friend gave AI access to his accounts to summarize his finances. On reviewing the AI-generated report, he spotted a $500 monthly loan payment that he didn't recognize. He asked AI where it came from, and AI admitted that it was a mistake. Perhaps in its training data, most people have a $500 loan payment, so AI just stuck one in there.

Probably it estimated future AI subscription costs.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#469

Post by [deleted] »

cj wrote: post #224
derf_ wrote: post #187

Earlier quoted context omitted.

> I found S&P 500 Equal Weight to be pretty attractive. The rebalancing required to maintain equal weights means constantly selling your winners and buying more of your losers. That creates volatility drag. Stock returns are highly skewed: only about 4% of stocks outperform the market, and are responsible for most of its gains. By keeping your allocation to those stocks small through constant rebalancing, you are mis…

If big tech ends up seeing a 40-50% draw down in the next 2-3 years, what ETF is best equipped to limit the blast radius?

[deleted]

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#470

Post by christina97 »

ralph84 wrote: post #467

Imagine Anthropic had gone public a year ago when it had a $61.5 billion valuation. Index fund investors would be up in arms demanding this change after missing out on the 15x run to $965 billion.

The point is that that’s a valuation on paper, made up by a small group of investors that have a strong incentive to have the number be high. Would the number have gone up like this if it were a public company?
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