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were you trying to reply to someone else?
No, I'm saying they are hyping up some random podcast while saying sweet nothings. I really don't like empty hype. I want some actual content to posts that actually says something, not just links breathlessly encouraging me to go spend an hour listening.
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> sensible thing to do is to create a new index with the new rules It depends. Indices aren’t funds. They aren’t meant to balance investor interests. They’re meant to communicate some metric about the market. The S&P tells you how big companies are doing in an index optimized to balance representation against trading cost. So in 2005, float was taken into account for weighting (versus just market cap). This made sens…
an etf that tracks the S&P 500 is what then? This is a big win for many S&P 500 etf holders
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“ Historically, companies like SpaceX would have gone public earlier” Could woulda shoulda. Mate they didn’t. Moreover if they had, the existing investors would’ve got a shittier exit.
Yes, they did. In the wake of Enron, Sarbanes-Oxley was passed, for which the 2nd order effect was that companies take years and years longer to IPO. 10-17 years on average since 2010 (it used to be lower). (There are other reasons, it's not purely due to SOX. The existing investors don't have liquidity. I can't buy a house or pay my bills with shares I'm not allowed to sell. A better exit later is worthless if I sta…
Did mom and pop invest..? No they did not. The investors who did knew the long time horizon they were committing to.
They could’ve gone public earlier - they chose not to and venture capitalists were happy to keep supplying the funding.
Also lol @ using that act to explain why people take longer to ipo. Lest we forget how deep venture capital has become. Hahahha
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The S&P 500 may not be a fund itself, but Standard & Poor's is a business whose ability to sell services is correlated with the continued relevance of the S&P 500. It absolutely does balance interests - namely, its own - beyond simply being an academic vehicle for communication of a stable thesis. It seems entirely reasonable to say: "if we make a certain decision, we correlate both our reputation and a nontrivial po…
> absolutely does balance interests - namely, its own - beyond simply being an academic vehicle for communication of a stable thesis As a business, sure. As a committee, it’s still a deeply technical process. I can say with a lot of confidence that optics weren’t considered in any of this, possibly to a fault. > and a nontrivial portion of the U.S. economy This vastly overstates the amount of assets tied to the S&P 5…
How can you possibly know that? Do the people on that committee have a cast-iron tenure guarantee?
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They might but changing the rules for a highly controversial company would do more harm in lost trusts than gain for investors.
Exactly. There is this undercurrent of The End Times everywhere, that this is it. This is the end of ... everything that was. When in fact it is not the end times, and the people at those indexes want to exist longer than SpaceX.
The reality is something like 96% of public companies underperform treasuries.
ref: https://paretoinvestor.substack.com/p/why-96-of-stocks-are-d...
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except $4T is a made up number, a complete fantasy not rooted in any reality. it us more like $750bn (this is also made up number) :)
The 409a has a lot of words and numbers to justify a particular valuation. It's not made up from the ether based on nothing. You can disagree with their reasoning and come to a different number, but you need to show your work if you want anyone to give a shit about your made up number. How many satellites have you launched this year? What's the going rate for a kilogram to LEO? Who are the competitors and what do the…
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Nasdaq "solved" that problem by including a 5x float multiplier for stocks with less than 20% of shares available to the public...
That's misleading. Before the changes, the Nasdaq-100 index was total market cap-weighted not float-weighted. Once a company crossed 10% floated shares, the company was added to the index at full weight. Nasdaq's new system is a hybrid of float-weighted and cap-weighted. If a company has below 33.3% float, its weighting is 3x float. Above that, it's cap weighted. This allows a gradual fade-in of the company into the…
It won't matter for your portfolio. Your portfolio will keep growing.