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The Hateful Eight is 85% of S&P 500 Decline
- kingleopold 7mo agoI like how they keep making BS names to create their financial engineering BS marketing and narrative going. so it's The Hateful Eight now what for this year and next? It used to be, FAANG, MAG7,ZIRP this, ZIRP that, Gamestop reaching to their FT stories and every news reporting at same week and so many made up BS from finance engineers. Media is ready to lie to you and feed you BS, just waiting order(s) from finance dep.
- arcanemachiner 7mo agoUnlike Mag 7, Hateful 8 doesn't really strike me as a term of endearment...
- cramsession 7mo agoIt's totally crazy that Tesla gets included with real companies. It's a meme stock with a 323.88 price to earnings ratio. It has no business being in the S&P 500 and should quite frankly be delisted.
- seydor 7mo agospace datacenters will need tesla powerwalls. also, flying saucers are using tesla superchargers onow
- amazingamazing 7mo ago[flagged]
- zhengyi13 7mo ago... and the standard reply to this standard reply is "The market can remain irrational longer than you can remain solvent."
- bombcar 7mo agoThe problem is it's very easy to make a long-term bet the stock will go up (buy the stock) but it is very hard to make a long-term bet the stock will go down (you have to pick a date by which it occurs).
- zeroCalories 7mo agoIt's actually easy. Just sell and invest somewhere else.
- IAmBroom 7mo agoNot the same thing at all.
- solatic 7mo agoYou're correct, but your assertion needs a qualifier: it's hard for small investors to make a long-term bet that a stock will go down. Large investors do not need to purchase index funds, instead they can direct index and purchase the underlying stocks directly. If you're a small investor, the index funds offer diversification but without the ability to divest from individual stocks covered by the index; large investors that are direct indexing can just decide to exclude meme stocks and not buy them, and in so doing make a long-term bet that those stocks will underperform the rest of the index (and without needing to pick a specific date by which that underperformance will happen, unlike a short). There's an argument to be made that there should be a maximum share price (stocks that reach the maximum trigger an automatic stock split), and that stocks should be allowed to trade for fractions of a penny (after all, what really prevents this in a day and age where all trades are electronically settled? Nobody needs to cash out for literal copper pennies...). Much smaller individual share prices would make it more feasible for smaller investors to build direct indexing strategies.
- loeg 7mo agoIt is a crazy meme stock, but in terms of the S&P500, it's 2000x the size of the smallest S&P500 component.
- cramsession 7mo agoIs that market cap or earnings? The market cap is the meme part. If TSLA had the P/E ratio of MSFT, shares would be worth $24.
- loeg 7mo agoMarket cap. If it had the P/E of MSFT, it would still be 140x bigger than the smallest S&P500 component.
- deleted 7mo ago[deleted]
- jordanb 7mo agoElon is working on a scam to get SpaceX into the S&P after its IPO in violation of current rules: https://www.ft.com/content/59adbe42-ca30-47f3-9cda-5415945e9368 https://www.ft.com/content/59adbe42-ca30-47f3-9cda-5415945e9...
- malfist 7mo agoNasdaq announced today that their Fast Inclusion policy as official starting May 1st. 15 days of price discovery for SpaceX instead of 1 year for inclusion into indexes. Will be one of the largest wealth transfers from common people to the wealthy since it'll exploit all passive investments to provide exit liquidity for elon and his investors.
- darth_avocado 7mo agoMarkets can stay irrational longer than you can stay solvent. There are still plenty of people who still take everything Elon says as the truth in 2026. I know people who are otherwise very reasonable, immediately get defensive when presented with the mildest of the criticisms of Elon.
- johnnyanmac 7mo agoSinclair's quote rings especially true here. Threatens a person's money, no matter how irrational, and you'll get the most disciplined thinkers devolve into 4chan level tirades.
- tombert 7mo agoYeah, I don't understand Elon's plot armor, especially after the calling a cave diver a pedo. That's when I definitively stopped liking him, though I always thought that the Hyperloop seemed pretty dumb. I am not the first person to say this, but I guess I took a lot of what he said at face value because I don't really know anything about physics or rockets beyond a high school level. Then he started saying stuff about computers that were "slightly off" at best, and since I know a lot more about computers it made me realize he was kind of full of shit.
- steve_adams_86 7mo agoWorse yet, he doesn't seem to realize when he's full of shit. He's very confidently wrong. It makes me so curious to understand what his competencies actually are. Clearly he's not an idiot; he's got to be great at some things. I just can't tell what it would be anymore.
- tombert 7mo agoI actually think he might just be an idiot. I think a lot of people respond to people who are extremely confident, and whether or not they are "right" about anything is secondary. I mean we have a president who has almost never even completed an entire sentence, but he tells you how smart he is all the time and people just believe it.
- Bombthecat 7mo agoYou forgot spacex, which will be also added, fast track :)
- instalabsai 7mo agoI like to believe that this was the actual reason to acquire Twitter: it’s the meme engine that keeps Tesla/SpaceX valuation high.
- keeganpoppen 7mo agojust look how s&p 500 is defined. your answer is right there. there is no “does cramsession approve” proviso in there.
- ramesh31 7mo ago>It has no business being in the S&P 500 and should quite frankly be delisted S&P500 inclusion is a simple math calculation based on market cap. By definition, Tesla must be included until its value drops far enough to exclude it. That will probably never happen short of an apocalyptic event.
- loeg 7mo agoIt's not quite that simple -- there are other criteria. E.g., MSTR is not included in the index. And technically the committee overseeing it has some discretion. That said, I agree that TSLA easily meets the criteria for inclusion -- even if you assume a normal automaker P/E of ~5 instead of TSLA's meme-stock ~330.
- jackconsidine 7mo agoPoint taken but I think it's a bit of a fallacy to frame this way. The market can go up and down as can individual stocks; "85% of the decline" doesn't make sense because some stocks are going up. A book I read a few years ago put this more eloquently. Some governor said that 20,000 jobs were created last month and his state contributed half of them. Well, many states lost jobs and the state next door actually gained MORE jobs, so the "more than half" framing makes no sense
- themafia 7mo ago> The market can go up and down as can individual stocks Literally the main reason we even have indexes. > "85% of the decline" doesn't make sense 85% of the decline represented by the overall index. > so the "more than half" framing makes no sense It makes perfect sense. It's just misleading.
- cj 7mo agoI wouldn't say it's a fallacy. It's just an interesting way to look at the data. I think more people need to be talking about the fact that the S&P 500 has extreme concentration risks that didn't exist 15+ years ago (and the Chart of the Day demonstrates that). We're in uncharted territories re: market cap concentration.
- dangus 7mo agoIt becomes less interesting the more the “overweight” stocks correct. The extreme concentration risk lessens as these 8 stocks fall in value compared to the rest. I also don’t personally see the risk in the concentration. Risk of what? These companies are legitimately larger and doing more business than other firms. Pick a median consumer. Which company are they sending more profit to than companies like Apple or Amazon? 10 years ago the average consumer maybe bought an iPhone from Apple every 3 years, so they gave Apple less than $100 of pure profit dollars per year. Now that same consumer is giving Apple money for the iPhone, but also spending on services that they weren’t buying 10 years ago. If they’ve got an Apple One subscription they’re now sending Apple double or triple the profit they used to get. These companies are big because they sell more things and are more diversified than they were in the past. There’s no concentration risk. I’d actually argue that the concentration risk can be resolved overnight through antitrust regulation (e.g., force Apple and Amazon to split into multiple companies, as they already have obvious verticals that could stand alone).
- zhengyi13 7mo agoIt's been interesting to review my portfolio, such as it is, against this situation, and see that I'm down relatively little. Not because I've bet against anything per se, but I made a conscious decision years ago to diversify out of the SP500 ("VTSAX and chill!") into broader and exUS indices.
- loeg 7mo agoThe broader US market is only about 25% bigger than the S&P500, FWIW. (Or put another way, S&P500 is about 80% of all US equity.) They also trade in almost lockstep: https://totalrealreturns.com/n/VFIAX,VEXAX?start=2025-01-01 https://totalrealreturns.com/n/VFIAX,VEXAX?start=2025-01-01
- IAmBroom 7mo ago"Almost". This is specifically one of those points in stock history where it isn't true; the heavyweights of the S&P 500 are dragging it down while the smaller companies are less affected.
- loeg 7mo agoI brought a graph in my earlier comment! Even over the past year, they're highly correlated. (And the S&P500 is ahead over the period -- not the other 25%.)
- readthenotes1 7mo agoAren't most exUS stocks dominated by the US economy? Getting mostly out of hateful 8 hype isn't bad though when they're going down... https://investor.vanguard.com/investment-products/etfs/profile/veu https://investor.vanguard.com/investment-products/etfs/profi...
- SirMaster 7mo agoDo people really care that much about short term decline? The SP500 was around 5000 a year ago, and it's currently well over 6000.
- Uvix 7mo agoYes. Nobody looks at the long term anymore.
- SirMaster 7mo agoWeird, I look at my investments in timescales measured in years.
- johnnyanmac 7mo agoIf society could think past next quarter, we arguably wouldn't be in this mess to begin with.
- Balgair 7mo agothey just changed the reporting req to every 6 months too
- tcmart14 7mo agoIt depends. People can always say, "zoom out," but that only works if you plan to be long term invested. Really it's more of a, what is your investment horizon/window. If you were planning to reap what you sowed in the stock market right now, you'd maybe be screwed. But like myself, the money I put in (personal account), Im not looking to touch for at least 10 years. Although right now/near term, it's not clear if we will be going up anytime soon. We were already stalling for the better part of the last 6-7 months on growth. Now we are going down with potential macro events that may keep it going down or stall growth for a bit. But as I said, if you're putting in money today planning not to touch it in 10-20 years, don't sweat it. Until the recent events in the Middle East, my international ETF was out performing the S&P500 by quite a bit. Also consider there was a period it took the NASDAQ something like 15 years to recover from a crash after ATH. If your 20 and don't plan to touch it till your 60, whatever. But if you were 55 and looking to capitalize on it at 65, well, zoom out doesn't mean much to you.
- didip 7mo agoJust QQQ and chill. You get all of the hardware companies monster gains to offset the losses.
- aworks 7mo agoFYI: Larry Ellison's net worth is down $200 billion since September. (Hateful Eight = Mag 7 + Oracle). https://www.thebignewsletter.com/p/monopoly-round-up-the-iran-war-price https://www.thebignewsletter.com/p/monopoly-round-up-the-ira...
- paxys 7mo agoWonder how he'll survive on a mere $188 billion now.
- keeganpoppen 7mo agogive him a month or two and we’ll see how it’s going for him
- yunnpp 7mo agoHe's gonna have to flip burgers at McDonald's to make ends meet.
- deleted 7mo ago[deleted]
- datadrivenangel 7mo agoMisleading because it shows % of total decline as opposed to each ones decline. The bigger the company the more points they have to lose..., so Oracle for example losing 20 points may be a smaller % decline on their part than a samller company that looses less.
- kristianp 7mo agoWe might have to come up with a new name for the top stocks if SpaceX and Anthropic IPO this year. I noted that Musk might be getting ahead of any IPO fatigue that might be caused by the big 2 AI companies. Will OpenAI somehow stealth their way into a listing before those two? Also some of the recent declines will be due to the war.
- zitterbewegung 7mo agoStocks that were driving the market in gains for two years are now going down? Who would have thought that these stocks might have been overbought by people... S&P in general has been giving returns in the past ten years ~12%. Seems like more of the same to me.
- seydor 7mo agoWhere did that money go to ?
- IAmBroom 7mo agoDepending on your POV, some air was let out of the hype machine (inflated prices fell closer to reality), or the market withdrew its trust in actual value (devaluing it in real, instant dollars).
- anon84873628 7mo agoIt was never really there to begin with. The stock price is like the price on a restaurant menu. If you're the restaurant owner you don't make money just because you increase the prices on the menu. If you're a diner you don't spend money just by looking at menus in the window.
- eep_social 7mo agoUS dollars or equivalents mostly, money market funds, treasuries, sgov, etc
- fittingopposite 7mo agoGold and CHF
- alecco 7mo agoAll these, include the war and oil spike, and all the current liquidity dramas, will be historic rounding errors. Boomers already started to burn their $78 trillions in savings. And taxes will skyrocket for the rest to pay their fat unfunded pensions. Oh, and don't forget giving them subsidized/free healthcare. And a last FU, they collude to rise rent (they are the landlord class). But hey, they never forget to vote.
- smartcc 7mo ago[dead]