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Americans express unease over SpaceX's influence on retirement savings

theguardian.com

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Re: Americans express unease over SpaceX's influence on retirement savings

#31

Post by redox99 »

HWR_14 wrote: post #24
mattmaroon wrote: post #2

Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.…

They probably won't be on the S&P for years, because of profitability requirements.

If they can keep google and anthropic deals, they're already profitable.

Re: Americans express unease over SpaceX's influence on retirement savings

#32

Post by saturn8601 »

nullstyle wrote: post #22
Retric wrote: post #7

Earlier quoted context omitted.

Without rapid purchasing by indexes SpaceX’s stock would likely to tank as ever more people would be able to sell over the first year. It’s a 24 year old company with a current high flying stock price based on very questionable numbers.

With several large bets on the table with starship that have yet to play out. Remember mars by 2024? I think that was around the time they started accepting deposits on tesla semi.

They shipped the Semi though. Yes the situation is bad but its not vaporware. Musk had to scam the markets to survive in late 2017/2018

Re: Americans express unease over SpaceX's influence on retirement savings

#33

Post by dehrmann »

Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.

Re: Americans express unease over SpaceX's influence on retirement savings

#34

Post by whiplash451 »

anotherhue wrote: post #3

What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice. Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.

You can buy the companies making up the index instead of the index itself.

It was proven to be a good strategy on the SP500 [1, 2]

With 500 companies, it's work. But you can probably approximate it with a top 100.

[1] https://rodneywhitecenter.wharton.upenn.edu/wp-content/uploa...

[2] https://www.tandfonline.com/doi/full/10.1080/0015198X.2023.2...

Re: Americans express unease over SpaceX's influence on retirement savings

#35

Post by nrmitchi »

loeg wrote: post #19
ribosometronome wrote: post #12

Earlier quoted context omitted.

Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.

The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.

This may be true (I'm sure it is, but I haven't verified) but the large majority of people do not know this, which is why hearing "my retirement account is going to be forced to by a bunch of spacex at a $2.5T valuation" makes them.... uneasy.

Re: Americans express unease over SpaceX's influence on retirement savings

#36

Post by mschuster91 »

mattmaroon wrote: post #2

Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.…

> It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag.

A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.

> It’s not like it wasn’t going to end up in every index in a year.

Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.

Re: Americans express unease over SpaceX's influence on retirement savings

#37

Post by mschuster91 »

loeg wrote: post #19
ribosometronome wrote: post #12

Earlier quoted context omitted.

Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.

The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.

Oh there are ETFs that track Nasdaq 100.

Re: Americans express unease over SpaceX's influence on retirement savings

#38

Post by wetpaws »

dehrmann wrote: post #33

Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.

[dead]

Re: Americans express unease over SpaceX's influence on retirement savings

#39

Post by skizm »

dehrmann wrote: post #33

Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.

To the same point I also don't want the index itself picking and choosing which companies to apply which rules to.

Re: Americans express unease over SpaceX's influence on retirement savings

#40

Post by sethops1 »

dehrmann wrote: post #33

Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.

Okay then why is SPCX going to be weighted 3x its actual float in the Nasdaq? A rule made just for SPCX.
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