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Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpri

by mordae 4mo ago

Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpriced.

l23k4 4mo ago
Those poor pension funds, unable to make their own decisions. Forced to keep all of their money in $NDX forever. It must be terrible to be so utterly powerless.
- Pooge 4mo ago
  Pension funds use (you guessed it) index funds like your average passive investor. Sure we can hate pension funds but fuck the management of those indexes.
  - l23k4 4mo ago
    Pension funds are perfectly capable of switching to a different product if they don't want index funds that reflect the market. But they do want index funds that actually reflect the market, so they want these rule changes. The management of those indices is just doing exactly what the vast majority of their customers want.
    - Pooge 4mo ago
      What? Absolutely not. They are doing what the President is telling them to do. The customers of indexes are providers of funds (Vanguard, BlackRock, ...). In turn, people like you and me are clients of those providers. Indexes are changing the rules thanks to lobbies by the world's richest people so they can get even richer by dumping their overvalued stocks. If you are not a SpaceX investor, you are losing money. Including pension funds.
      - l23k4 4mo ago
        >What? Absolutely not. They are doing what the President is telling them to do. This is a paranoid delusion. These rules were never on particularly solid ground, it's only natural to see them gone when you have significant upcoming IPOs changing the structure of the market. It is the job of these indices to keep up with that.
        Pooge 4mo ago
        I'm sorry but you're very naive. The rules were changed because it was advantageous to SpaceX and the richest man on Earth. Those rules were implemented to protect the index from being skewed when an IPO happens because the IPO is exactly the moment where the stock may be overvalued and very volatile (compared to all the other stocks that are in the index). We especially don't know at IPO time if the company is changing the structure of the market because it's too soon. And in fact, we won't know for a couple more weeks or even years; but by that time the price will have stabilized. The index is supposed to be slow at rebalancing to minimize costs and make it practical for providers as well. And as I write this comment, I've just read that they cancelled the changes[1]. Which completely proves your last sentence wrong. [1]: https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-Consultation-on-Treatment-of-MegaCap-Companies-Results https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...
        l23k4 4mo ago
        >I'm sorry but you're very naive. The rules were changed because it was advantageous to SpaceX and the richest man on Earth. The rules were changed in the mid-90s because of a significant amount of big IPOs which did not have a reasonable path to profitability. That's not even close to the situation we're in right now. Both OpenAI and Anthropic are clearly solid businesses. > We especially don't know at IPO time if the company is changing the structure of the market because it's too soon. And in fact, we won't know for a couple more weeks or even years; but by that time the price will have stabilized. This is largely magical thinking. How many more weeks should I wait before $TSLA will stabilize? >And as I write this comment, I've just read that they cancelled the changes[1]. Which completely proves your last sentence wrong. Or maybe deranged Americans just turned this non-political issue into a political one, and S&P global thought this was not a hill worth literally getting shot in their office for? I don't know, that'd certainly be my primary concern in their place. Wouldn't it be yours?
- onel 4mo ago
  That's not how pension funds work though. Pension funds are extremely conservative. They invest on horizons spanning decades. They can't just make decisions from one month to the next. The very short time frame of an index accepting Tesla is the problem. It's like telling a train "quick, make a right here"
  - l23k4 4mo ago
    And how do you suppose these rules were originally introduced? Do you believe that the reasoning was particularly solid then, and is it directly applicable in the current situation?
    - onel 4mo ago
      Yes. These rules were introduced, because that's the purpose of pension funds. To invest in very long-term ideas and assets. That's their whole purpose. I'm not sure if we're debating here about the purpose of pension funds, or their strategy of investing in index funds. The first one doesn't change, the second one, maybe.
elp 4mo ago
I'm willing to bet that most funds will just change their reconstitution process to give themselves a much longer period to add new IPO stocks to their portfolios and end up avoiding most of the drama. On the other hand if they don't I'm making popcorn because the lawsuits and political fallout if / when this goes wrong is going to be epic.

by mordae 4mo ago

Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpriced.

l23k4 4mo ago

Those poor pension funds, unable to make their own decisions. Forced to keep all of their money in $NDX forever. It must be terrible to be so utterly powerless.

Pooge 4mo ago
Pension funds use (you guessed it) index funds like your average passive investor. Sure we can hate pension funds but fuck the management of those indexes.
- l23k4 4mo ago
  Pension funds are perfectly capable of switching to a different product if they don't want index funds that reflect the market. But they do want index funds that actually reflect the market, so they want these rule changes. The management of those indices is just doing exactly what the vast majority of their customers want.
  - Pooge 4mo ago
    What? Absolutely not. They are doing what the President is telling them to do. The customers of indexes are providers of funds (Vanguard, BlackRock, ...). In turn, people like you and me are clients of those providers. Indexes are changing the rules thanks to lobbies by the world's richest people so they can get even richer by dumping their overvalued stocks. If you are not a SpaceX investor, you are losing money. Including pension funds.
    - l23k4 4mo ago
      >What? Absolutely not. They are doing what the President is telling them to do. This is a paranoid delusion. These rules were never on particularly solid ground, it's only natural to see them gone when you have significant upcoming IPOs changing the structure of the market. It is the job of these indices to keep up with that.
      - Pooge 4mo ago
        I'm sorry but you're very naive. The rules were changed because it was advantageous to SpaceX and the richest man on Earth. Those rules were implemented to protect the index from being skewed when an IPO happens because the IPO is exactly the moment where the stock may be overvalued and very volatile (compared to all the other stocks that are in the index). We especially don't know at IPO time if the company is changing the structure of the market because it's too soon. And in fact, we won't know for a couple more weeks or even years; but by that time the price will have stabilized. The index is supposed to be slow at rebalancing to minimize costs and make it practical for providers as well. And as I write this comment, I've just read that they cancelled the changes[1]. Which completely proves your last sentence wrong. [1]: https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-Consultation-on-Treatment-of-MegaCap-Companies-Results https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...
        l23k4 4mo ago
        >I'm sorry but you're very naive. The rules were changed because it was advantageous to SpaceX and the richest man on Earth. The rules were changed in the mid-90s because of a significant amount of big IPOs which did not have a reasonable path to profitability. That's not even close to the situation we're in right now. Both OpenAI and Anthropic are clearly solid businesses. > We especially don't know at IPO time if the company is changing the structure of the market because it's too soon. And in fact, we won't know for a couple more weeks or even years; but by that time the price will have stabilized. This is largely magical thinking. How many more weeks should I wait before $TSLA will stabilize? >And as I write this comment, I've just read that they cancelled the changes[1]. Which completely proves your last sentence wrong. Or maybe deranged Americans just turned this non-political issue into a political one, and S&P global thought this was not a hill worth literally getting shot in their office for? I don't know, that'd certainly be my primary concern in their place. Wouldn't it be yours?
onel 4mo ago
That's not how pension funds work though. Pension funds are extremely conservative. They invest on horizons spanning decades. They can't just make decisions from one month to the next. The very short time frame of an index accepting Tesla is the problem. It's like telling a train "quick, make a right here"
- l23k4 4mo ago
  And how do you suppose these rules were originally introduced? Do you believe that the reasoning was particularly solid then, and is it directly applicable in the current situation?
  - onel 4mo ago
    Yes. These rules were introduced, because that's the purpose of pension funds. To invest in very long-term ideas and assets. That's their whole purpose. I'm not sure if we're debating here about the purpose of pension funds, or their strategy of investing in index funds. The first one doesn't change, the second one, maybe.

elp 4mo ago

I'm willing to bet that most funds will just change their reconstitution process to give themselves a much longer period to add new IPO stocks to their portfolios and end up avoiding most of the drama. On the other hand if they don't I'm making popcorn because the lawsuits and political fallout if / when this goes wrong is going to be epic.