7 ms·

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

by dstroot 4mo ago

toomuchtodo 4mo ago
The best you can do is avoid the exposure with changes to your portfolio composition while everyone else gets grifted. It's regrettable.
- andsoitis 4mo ago
  I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.
  - toomuchtodo 4mo ago
    If one wants to gamble on the grift, that is what options are for. Otherwise, we might as well start adding NFTs to the indexes if fundamentals do not matter. Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech. https://www.defianceetfs.com/xmag/ https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.") https://www.aboutschwab.com/mss/story/how-investing-and-gambling-are-not-the-same https://www.aboutschwab.com/mss/story/how-investing-and-gamb... ("Investing and gambling can both be fun. But they are not the same.") (none of this is investing advice, educational purposes only)
    - andsoitis 4mo ago
      In 2025 VOO returned 17.82% vs VOOG returned 22.11%. XMAG’s trailing 1-year return through late 2025 was around 9–15% depending on the measurement date, as the Mag 7 dragged badly in early 2025. VOOG has returned 18.28%/yr over 10 years vs 15.63%/yr for VOO, a meaningful gap driven almost entirely by Mag 7 dominance. XMAG has no 10-year track record.
      - toomuchtodo 4mo ago
        Certainly, you have done well over the last ~18-24 months if you have exposure to the AI investment exuberance (VOO), just as you did well if you had exposure to certain securities during ZIRP or the pandemic. "Past performance is no guarantee of future results."
        andsoitis 4mo ago
        Since its September 2010 inception, VOO is up +816% in nominal total return, or +15.1%/yr annualized. The 10-year total return is 327%, and the 15-year average annual return is 14.4%. Hard to beat.
        toomuchtodo 4mo ago
        Which you only know in hindsight, in the context of this performance benchmark. In that time frame, we had zero interest rate policy, a global pandemic, and now an AI bubble. "Will the conditions or events that led to my historical returns continue?" is a material component of forward looking exposure decisioning when investing.
    - FireBeyond 4mo ago
      > Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech. Yup. Coupling this change with "oh, and btw, we also want the option to be able to only put out annual or biannual earnings reports not quarterly" means "We want to offload even more risk."
  - TimTheTinker 4mo ago
    Nothing wrong with finding a low-cost large cap ETF that matches your investing preferences.
    - gruez 4mo ago
      So basically the whole ESG craze from a few years ago?
      - TimTheTinker 4mo ago
        Sure, or there are faith based ones now - I personally invest in PTL
        myroon5 4mo ago
        $PTL "screens" for: * air quality * environmental risk * GHG emissions * ecological impact * product sustainability https://www.inspireetf.com/screening https://www.inspireetf.com/screening yet weights ExxonMobil, the 21st largest company: https://companiesmarketcap.com/ https://companiesmarketcap.com/ as by far their 2nd largest holding: https://www.inspireetf.com/etf/ptl https://www.inspireetf.com/etf/ptl
        TimTheTinker 4mo ago
        Oil/Gas/Petroleum is essential for our economy to function, and the line between "ethical" and "not ethical" is a dial (one among many that all need to be tuned together), not a switch. $PTL/Inspire does not adjudicate "dial" ethical issues, just switches -- company practices/policies that it views as black-and-white good/bad. "It would be ethical if you produced N% less" doesn't fit that category.
        myroon5 4mo ago
        Guess who organized decades-long misinformation campaigns to make them as essential as they currently are: https://wikipedia.org/wiki/ExxonMobil_climate_change_denial https://wikipedia.org/wiki/ExxonMobil_climate_change_denial Regardless, most companies I checked have multiple different ratings because that site can't even do basic data cleaning: https://inspireinsight.com/AAPL/US https://inspireinsight.com/AAPL/US https://inspireinsight.com/AAPL/PT https://inspireinsight.com/AAPL/PT https://inspireinsight.com/GOOGL/GT https://inspireinsight.com/GOOGL/GT https://inspireinsight.com/GOOGL/MX https://inspireinsight.com/GOOGL/MX https://inspireinsight.com/MSFT/AU https://inspireinsight.com/MSFT/AU https://inspireinsight.com/MSFT/US https://inspireinsight.com/MSFT/US https://inspireinsight.com/AVGO/US https://inspireinsight.com/AVGO/US https://inspireinsight.com/0YXG/GB https://inspireinsight.com/0YXG/GB https://inspireinsight.com/TSM/US https://inspireinsight.com/TSM/US https://inspireinsight.com/5425/TW https://inspireinsight.com/5425/TW https://inspireinsight.com/LUBEREF/SA https://inspireinsight.com/LUBEREF/SA https://inspireinsight.com/2223/SA https://inspireinsight.com/2223/SA so even they disagree with their own ratings ;)
  - Eji1700 4mo ago
    > I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If a 1 to $1.5t IPO that was fast tracked onto the S&P500 and then hoovered up a bunch of index fund money becomes a dud, the organic rebalance is going to start with a full reassessment of if index funds and the S&P can be TRUSTED. Its very possible it will be more than a blip, although to be fair if it isn't it's going to be the sort thing you aren't going to dodge.
  - kristjansson 4mo ago
    Sure, it'll only be ~2% of the index if it opens where they want to. But in the downside case where it meanders long enough for significant amounts of its stock to make it in to public hands and then goes to 10x revenue (i.e. down 90%) , you've allowed a company to engineer dramatic changes in index rules resulting in a transfer ~1% of S&P 500 market cap from index funder holders to its bagholders^W privileged insiders^W^W investors. Yes a -1% day should be nothing to a long term holder. Yes they're buying the market; if the market is wrong they shouldn't really have any recourse. But one can also understand that a -1% day that accrues ~entirely to the benefit a small group, who appear to have engineered that outcome has much more emotional valence than a typical down down. It doesn't feel like a bad day on the market, it feels like a heist.
- jandrewrogers 4mo ago
  There are many dubious companies in the S&P500. I don’t see the point in getting selectively heated about this one when everyone seems to be okay with the others. That’s the way indexes roll. I don’t invest in indexes for this reason. There is a separate structural issue with indexes that is being ignored here. Indexes were never really designed to accommodate companies going public so late with high revenue growth. A couple decades ago companies went public when they were so small that they could grow into the index. This reflects changes in the nature and structure of the capital markets, these new IPOs are just a manifestation of this reality.
  - trismus 4mo ago
    [dead]
  - matwood 4mo ago
    Also given how the S&P weights, it'll have about as much sway as DoorDash. Annoying they pushed it into the indexes, but like you said, we've also never had a company come out in the 1T range or even the x00B range. These indexes are supposed to represent the market and can't ignore a 1T market cap company for very long. EDIT One other thing to add, is that we still do not know what the stock will price at. It's already come down once, and as more information comes out it can continue to come down until it's finally priced the day before the first trading day.
trhway 4mo ago
>Forcing it into our retirement funds, 401ks and IRAs. Not just forcing it into. Forcing the funds to fight for it betting the stock rice higher and higher in a runaway style - the effect created by limited float and high valuation as the funds tracking indexes would try to get the amount reflecting the proportion of the valuation of the company vs. the whole tracked index valuation, and with such huge valuation the limited float leads to the price rise (similar to the short squeeze) and the higher the price on the float the higher the valuation, rinse and repeat...
- deleted 4mo ago
  [deleted]
- a3c9 4mo ago
  That's exactly what happened with Nortel in the dotcom crash. Everyone's pension and retirement tied up in a company that couldn't turn a profit and was, at its peak, 38% of the TSE300. I don't think dominating an index to anywhere close to that degree is likely here, but I wouldn't be surprised to see some similar strategies being used. Changing the rules is already from the Nortel playbook: The Nortel Rule allowed index funds to have over 10% of their holdings in a single stock.
- quickthrowman 4mo ago
  Some index funds are not obligated to perfectly replicate the index by buying shares, FXAIX (Fidelity S&P 500 mutual fund) has the option to use futures, swaps, options, and statistical sampling in addition to buying equity shares to try and replicate the returns of the index.
nonethewiser 4mo ago
>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being added to it. I can't believe people are just running with this narrative as-if its logically consistent with what they believe. It's manipulation.
- anonymars 4mo ago
  > Apple? Dell? Workday? How long after their IPOs were they added to the appropriate indexes? Did the rules change specifically for them?
  - nonethewiser 4mo ago
    But thats an issue with the inclusion rules. The question is if adding a stock to the fund constitutes forcing people to buy it.
    - anonymars 4mo ago
      And why did SpaceX want the rules changed? Because anyone holding those passive indexes (a huge percent of holdings) would be forced to either liquidate them or invest in SpaceX Is there a relevant distinction you are trying to make, beyond "well, actually"? Call it something else then, like "enshittification of index funds" but it's still the same overall picture of getting money from people who otherwise wouldn't have invested in it
- SpicyLemonZest 4mo ago
  You've been missing important parts of the articles, or perhaps the ones you've seen aren't very informative. The concern is that SpaceX reached out to the indexes to get the rules changed (https://www.reuters.com/business/nasdaq-proposes-fast-entry-rule-speed-up-inclusion-large-new-listings-2026-02-04/ https://www.reuters.com/business/nasdaq-proposes-fast-entry-...); under the old rules, they would have had to wait much longer before being added. This doesn't prove anything wrong, but it's pretty suspicious, because why should SpaceX care if they are or are not in some particular list of stocks?
fragmede 4mo ago
There's a variety of ETFs that won't include it by default. Now convince all the retirees you know to switch their retirement account over to those...

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

by dstroot 4mo ago

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

toomuchtodo 4mo ago

The best you can do is avoid the exposure with changes to your portfolio composition while everyone else gets grifted. It's regrettable.

andsoitis 4mo ago
I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.
- toomuchtodo 4mo ago
  If one wants to gamble on the grift, that is what options are for. Otherwise, we might as well start adding NFTs to the indexes if fundamentals do not matter. Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech. https://www.defianceetfs.com/xmag/ https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.") https://www.aboutschwab.com/mss/story/how-investing-and-gambling-are-not-the-same https://www.aboutschwab.com/mss/story/how-investing-and-gamb... ("Investing and gambling can both be fun. But they are not the same.") (none of this is investing advice, educational purposes only)
  - andsoitis 4mo ago
    In 2025 VOO returned 17.82% vs VOOG returned 22.11%. XMAG’s trailing 1-year return through late 2025 was around 9–15% depending on the measurement date, as the Mag 7 dragged badly in early 2025. VOOG has returned 18.28%/yr over 10 years vs 15.63%/yr for VOO, a meaningful gap driven almost entirely by Mag 7 dominance. XMAG has no 10-year track record.
    - toomuchtodo 4mo ago
      Certainly, you have done well over the last ~18-24 months if you have exposure to the AI investment exuberance (VOO), just as you did well if you had exposure to certain securities during ZIRP or the pandemic. "Past performance is no guarantee of future results."
      - andsoitis 4mo ago
        Since its September 2010 inception, VOO is up +816% in nominal total return, or +15.1%/yr annualized. The 10-year total return is 327%, and the 15-year average annual return is 14.4%. Hard to beat.
        toomuchtodo 4mo ago
        Which you only know in hindsight, in the context of this performance benchmark. In that time frame, we had zero interest rate policy, a global pandemic, and now an AI bubble. "Will the conditions or events that led to my historical returns continue?" is a material component of forward looking exposure decisioning when investing.
  - FireBeyond 4mo ago
    > Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech. Yup. Coupling this change with "oh, and btw, we also want the option to be able to only put out annual or biannual earnings reports not quarterly" means "We want to offload even more risk."
- TimTheTinker 4mo ago
  Nothing wrong with finding a low-cost large cap ETF that matches your investing preferences.
  - gruez 4mo ago
    So basically the whole ESG craze from a few years ago?
    - TimTheTinker 4mo ago
      Sure, or there are faith based ones now - I personally invest in PTL
      - myroon5 4mo ago
        $PTL "screens" for: * air quality * environmental risk * GHG emissions * ecological impact * product sustainability https://www.inspireetf.com/screening https://www.inspireetf.com/screening yet weights ExxonMobil, the 21st largest company: https://companiesmarketcap.com/ https://companiesmarketcap.com/ as by far their 2nd largest holding: https://www.inspireetf.com/etf/ptl https://www.inspireetf.com/etf/ptl
        TimTheTinker 4mo ago
        Oil/Gas/Petroleum is essential for our economy to function, and the line between "ethical" and "not ethical" is a dial (one among many that all need to be tuned together), not a switch. $PTL/Inspire does not adjudicate "dial" ethical issues, just switches -- company practices/policies that it views as black-and-white good/bad. "It would be ethical if you produced N% less" doesn't fit that category.
        myroon5 4mo ago
        Guess who organized decades-long misinformation campaigns to make them as essential as they currently are: https://wikipedia.org/wiki/ExxonMobil_climate_change_denial https://wikipedia.org/wiki/ExxonMobil_climate_change_denial Regardless, most companies I checked have multiple different ratings because that site can't even do basic data cleaning: https://inspireinsight.com/AAPL/US https://inspireinsight.com/AAPL/US https://inspireinsight.com/AAPL/PT https://inspireinsight.com/AAPL/PT https://inspireinsight.com/GOOGL/GT https://inspireinsight.com/GOOGL/GT https://inspireinsight.com/GOOGL/MX https://inspireinsight.com/GOOGL/MX https://inspireinsight.com/MSFT/AU https://inspireinsight.com/MSFT/AU https://inspireinsight.com/MSFT/US https://inspireinsight.com/MSFT/US https://inspireinsight.com/AVGO/US https://inspireinsight.com/AVGO/US https://inspireinsight.com/0YXG/GB https://inspireinsight.com/0YXG/GB https://inspireinsight.com/TSM/US https://inspireinsight.com/TSM/US https://inspireinsight.com/5425/TW https://inspireinsight.com/5425/TW https://inspireinsight.com/LUBEREF/SA https://inspireinsight.com/LUBEREF/SA https://inspireinsight.com/2223/SA https://inspireinsight.com/2223/SA so even they disagree with their own ratings ;)
- Eji1700 4mo ago
  > I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If a 1 to $1.5t IPO that was fast tracked onto the S&P500 and then hoovered up a bunch of index fund money becomes a dud, the organic rebalance is going to start with a full reassessment of if index funds and the S&P can be TRUSTED. Its very possible it will be more than a blip, although to be fair if it isn't it's going to be the sort thing you aren't going to dodge.
- kristjansson 4mo ago
  Sure, it'll only be ~2% of the index if it opens where they want to. But in the downside case where it meanders long enough for significant amounts of its stock to make it in to public hands and then goes to 10x revenue (i.e. down 90%) , you've allowed a company to engineer dramatic changes in index rules resulting in a transfer ~1% of S&P 500 market cap from index funder holders to its bagholders^W privileged insiders^W^W investors. Yes a -1% day should be nothing to a long term holder. Yes they're buying the market; if the market is wrong they shouldn't really have any recourse. But one can also understand that a -1% day that accrues ~entirely to the benefit a small group, who appear to have engineered that outcome has much more emotional valence than a typical down down. It doesn't feel like a bad day on the market, it feels like a heist.
jandrewrogers 4mo ago
There are many dubious companies in the S&P500. I don’t see the point in getting selectively heated about this one when everyone seems to be okay with the others. That’s the way indexes roll. I don’t invest in indexes for this reason. There is a separate structural issue with indexes that is being ignored here. Indexes were never really designed to accommodate companies going public so late with high revenue growth. A couple decades ago companies went public when they were so small that they could grow into the index. This reflects changes in the nature and structure of the capital markets, these new IPOs are just a manifestation of this reality.
- trismus 4mo ago
  [dead]
- matwood 4mo ago
  Also given how the S&P weights, it'll have about as much sway as DoorDash. Annoying they pushed it into the indexes, but like you said, we've also never had a company come out in the 1T range or even the x00B range. These indexes are supposed to represent the market and can't ignore a 1T market cap company for very long. EDIT One other thing to add, is that we still do not know what the stock will price at. It's already come down once, and as more information comes out it can continue to come down until it's finally priced the day before the first trading day.

trhway 4mo ago

>Forcing it into our retirement funds, 401ks and IRAs. Not just forcing it into. Forcing the funds to fight for it betting the stock rice higher and higher in a runaway style - the effect created by limited float and high valuation as the funds tracking indexes would try to get the amount reflecting the proportion of the valuation of the company vs. the whole tracked index valuation, and with such huge valuation the limited float leads to the price rise (similar to the short squeeze) and the higher the price on the float the higher the valuation, rinse and repeat...

deleted 4mo ago
[deleted]
a3c9 4mo ago
That's exactly what happened with Nortel in the dotcom crash. Everyone's pension and retirement tied up in a company that couldn't turn a profit and was, at its peak, 38% of the TSE300. I don't think dominating an index to anywhere close to that degree is likely here, but I wouldn't be surprised to see some similar strategies being used. Changing the rules is already from the Nortel playbook: The Nortel Rule allowed index funds to have over 10% of their holdings in a single stock.
quickthrowman 4mo ago
Some index funds are not obligated to perfectly replicate the index by buying shares, FXAIX (Fidelity S&P 500 mutual fund) has the option to use futures, swaps, options, and statistical sampling in addition to buying equity shares to try and replicate the returns of the index.

nonethewiser 4mo ago

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being added to it. I can't believe people are just running with this narrative as-if its logically consistent with what they believe. It's manipulation.

anonymars 4mo ago
> Apple? Dell? Workday? How long after their IPOs were they added to the appropriate indexes? Did the rules change specifically for them?
- nonethewiser 4mo ago
  But thats an issue with the inclusion rules. The question is if adding a stock to the fund constitutes forcing people to buy it.
  - anonymars 4mo ago
    And why did SpaceX want the rules changed? Because anyone holding those passive indexes (a huge percent of holdings) would be forced to either liquidate them or invest in SpaceX Is there a relevant distinction you are trying to make, beyond "well, actually"? Call it something else then, like "enshittification of index funds" but it's still the same overall picture of getting money from people who otherwise wouldn't have invested in it
SpicyLemonZest 4mo ago
You've been missing important parts of the articles, or perhaps the ones you've seen aren't very informative. The concern is that SpaceX reached out to the indexes to get the rules changed (https://www.reuters.com/business/nasdaq-proposes-fast-entry-rule-speed-up-inclusion-large-new-listings-2026-02-04/ https://www.reuters.com/business/nasdaq-proposes-fast-entry-...); under the old rules, they would have had to wait much longer before being added. This doesn't prove anything wrong, but it's pretty suspicious, because why should SpaceX care if they are or are not in some particular list of stocks?

fragmede 4mo ago

There's a variety of ETFs that won't include it by default. Now convince all the retirees you know to switch their retirement account over to those...