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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

#131

Post by keernan »

nradov wrote: post #130
keernan wrote: post #125

Earlier quoted context omitted.

If Musk's pressure had succeeded and the S&P and CRSP had changed their index rules, then the major indexes would have been legally obligated to buy SpaceX at the IPO price - or presumably higher because their own mass purchases would have driven the price even higher. That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands. Edit: My reference to the SEC is th…

You seem to be confused about how index funds work. Hypothetically even if $SPCX was added to the S&P500, funds that track that index wouldn't be legally required to purchase it at the IPO price. Have you ever even read a fund prospectus or do you believe the uninformed nonsense you read online? The way it actually works is that when a stock is added to an index the index funds gradually build a position using a seri…

Mutual funds and ETFs set forth a prospectus that is a legal document binding them by law to comply with how they operate. While an etf is free to create its own index, that is not the way the market works. Vanguard, Fidelity, iShares, BlackRock and the other major players, state in their prospectus what index the ETF will follow - such as the CRSP US Total Market Index to use one example from Vanguard's VTI etf.

That means Vanguard VTI tracks the stocks that are contained in the CRSP US Total Market Index. So, if CRSP adds a new holding to its US Total Market Index, Vanguard VTI is legally bound by its prospectus to add that stock to VTI and to do so in a manner that assures VTI returns track the CRSP US Total Market Index returns as closely as possible (meaning they own every stock CRSP does and in the same proportion that CRSP does).

This is not just a 'good idea'. It is legally binding upon Vanguard by virtue of the VTI prospectus.

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

#132

Post by HWR_14 »

redox99 wrote: post #31
HWR_14 wrote: post #24

Earlier quoted context omitted.

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.

There is no way that Elon Musk wants to be leasing out compute. He'd rather be using that compute to power Grok.

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

#133

Post by ozozozd »

lesuorac wrote: post #127
bdangubic wrote: post #9

Earlier quoted context omitted.

except if you self-employed. I have maxed the shit out of my 401k (i401k, self-managed) and after 3 decade career have more saved than I can spend in 8 lifetimes

Well don't know your life but I suspect for a lot of people then it would've been more advantageous to not max out the 401k and retire pre-55 and spend the non-401k funds until 55. This largely being my gripe about the Trump accounts in that you're allocating funds into them that can't be touched without penalties until like 50 years later. And for most people this probably isn't even a benefit because you can lifeti…

I don’t follow why retiring pre-55 is a good idea. Can you elaborate?

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

#134

Post by overlord1109 »

keernan wrote: post #125
nradov wrote: post #94

Earlier quoted context omitted.

I don't understand your comment. The SEC doesn't control IPO prices. No one was forced to buy $SPCX at the IPO price.

If Musk's pressure had succeeded and the S&P and CRSP had changed their index rules, then the major indexes would have been legally obligated to buy SpaceX at the IPO price - or presumably higher because their own mass purchases would have driven the price even higher. That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands. Edit: My reference to the SEC is th…

> CRSP had changed their index rules

CRSP did change their rule earlier in Feb, where they added a clause that later allowed SPCX to be included, despite having Source: https://www.crsp.org/crsp-market-indexes-changes-to-float-sh...

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

#135

Post by [deleted] »

testaburger wrote: post #73
ggm wrote: post #14

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests…

Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are…

[deleted]

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

#136

Post by tialaramex »

keernan wrote: post #125
nradov wrote: post #94

Earlier quoted context omitted.

I don't understand your comment. The SEC doesn't control IPO prices. No one was forced to buy $SPCX at the IPO price.

If Musk's pressure had succeeded and the S&P and CRSP had changed their index rules, then the major indexes would have been legally obligated to buy SpaceX at the IPO price - or presumably higher because their own mass purchases would have driven the price even higher. That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands. Edit: My reference to the SEC is th…

> cow tail to his pressure and demands.

The idea you wanted is "kowtow" not "cow tail". The "kowtow" is a Chinese gesture of submission to power, in practice it might be a large formal gesture like European bowing, but it can be something much more subtle, like the knuckle tap in the tea ceremony, the observer knows what is signified. The submission to power rather than a particular gesture is what's retained in English.

"Cow tail" does exist as an actual idea in baseball, as a particular type of long swing which is said to resemble how cows twitch their tails but here that doesn't make sense.

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

#137

Post by mattmaroon »

keernan wrote: post #131
nradov wrote: post #130

Earlier quoted context omitted.

You seem to be confused about how index funds work. Hypothetically even if $SPCX was added to the S&P500, funds that track that index wouldn't be legally required to purchase it at the IPO price. Have you ever even read a fund prospectus or do you believe the uninformed nonsense you read online? The way it actually works is that when a stock is added to an index the index funds gradually build a position using a seri…

Mutual funds and ETFs set forth a prospectus that is a legal document binding them by law to comply with how they operate. While an etf is free to create its own index, that is not the way the market works. Vanguard, Fidelity, iShares, BlackRock and the other major players, state in their prospectus what index the ETF will follow - such as the CRSP US Total Market Index to use one example from Vanguard's VTI etf. Tha…

The way you don’t actually address the points people make or even seem to understand them, but rather just keep restating what was already said, makes you a pretty good proxy for the exact view I was talking about, so thanks!

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

#138

Post by mattmaroon »

Retric wrote: post #25
pclmulqdq wrote: post #20

Earlier quoted context omitted.

We all said that about Tesla for years, and a lot of people got burned on the trade. This time may be different, but it also may not be.

Tesla’s numbers looked vastly more reasonable. “In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.” Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to…

Tesla’s P/E ratio is currently 365. They have less than 1% market share, and declining, weak profits, products that seem to be suffering from weak updates and brand harm due to Elon’s politics, and competitors outpacing them from all sides.

Toyota’s P/E is under ten. They’ll make more money selling cars this quarter than TSLA will in ten years.

TSLA prices have never been within an order of magnitude of reasonable. They’ve been publicly traded for so long that some of the people legally driving them weren’t born when they IPOed. They’re not a startup and haven’t been in a while.

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

#139

Post by diydsp »

testaburger wrote: post #73
ggm wrote: post #14

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests…

Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are…

Vast majority?

The combined market cap of those four companies is maybe $500-600 billion combined. The total S&P 500 market cap is roughly $45-50 trillion.

So defense contractors represent maybe 1-1.5% of a typical index fund portfolio.

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

#140

Post by Gud »

overfeed wrote: post #98
testaburger wrote: post #73

Earlier quoted context omitted.

Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are…

> the Ukraine war in Ukraine's favor once starlink locked down access I think this is coincidental correlation. In the same period drone warfare was evolving until it reached some stalemate with an optic-fiber strewn killzone where none of the belligerents have an upper hand, and Ukraine's ballistic missile industry picked up pace, allowing Ukraine to hit far into Russia without relying on American long-range munitio…

Many of the long range drones use starlink terminals.

The deep attacks inside Russia would be significantly more difficult without starlink.

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