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> Maybe, most indexes do not have to follow the index. they just need to match the returns. This is a great technical point, and in a scenario where a constitu
by kybernetikos 4mo ago
> Maybe, most indexes do not have to follow the index. they just need to match the returns.
This is a great technical point, and in a scenario where a constituent has a lot of obvious correlations it might be relevant, but when you've got something that is effectively a meme stock with erratic leadership and a huge range in possible outcomes from bankrupt to most valuable company ever in the universe [claude tells me I should say 'idiosyncratic returns' instead of this rant], I don't see how you promise to match the performance of an index where it's a significant component except by buying it.
- nradov 4mo agoThey'll buy it, but they'll build a position gradually over months to approximately match the index. It won't be huge block buys on the IPO day.