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Wasn't this the result of the profit criterion, not an active decision?
by AlotOfReading 5y ago
Wasn't this the result of the profit criterion, not an active decision?
- NicoJuicy 5y agoCorrect. To be included in the S&P you need to be average quarterly profitable + your most recent quarter needs to be profitable.
- hartator 5y agoTSLA was matching the profit criterion for a while but was left out because it was too dependent on gov incentives. Which is fine but it is an active decision. As they are not making this kind of arbitrage for other companies relying on gov interventions and gov policies as well.
- stonogo 5y agoWhich companies?
- pvarangot 5y agoNot OP but maybe the defense contractors? Raytheon, Lockheed, General Dynamics and I think Teledyne are in the S&P 500.
- stonogo 5y agoCould be, but of those only Teledyne runs any real risk of losing profitability status as a result of scheduled ends of government incentives. I'm having a hard time finding out which companies OP could be referring to.
- ineedasername 5y agoTesla was relying on direct subsidies to customers for purchasing a Tesla. That's a little different than government contracts or massive tax breaks.
- Kranar 5y agoThe S&P 500 is selected by a committee vote, so every inclusion is an active decision. There are hundreds of large companies excluded from it for arbitrary reasons, including Dell, Snapchat, Square and literally hundreds of others.
- thaumasiotes 5y agoBut your grandparent comment isn't complaining about an inclusion. Exclusion is almost always a passive decision, as it was in this case.
- astrange 5y agoYes, the S&P 500 is an active index. Its ETFs are passive because they only track that index.