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"People" in this instance aren't always informed buyers. Sometimes they're buying an index fund because they don't have the time to research individual stocks
by alistairSH 3mo ago
"People" in this instance aren't always informed buyers. Sometimes they're buying an index fund because they don't have the time to research individual stocks and sometimes it's their pension investing.
The normal seasoning period is there for a reason. There is a massive downside to premature inclusion of a stock that is initially overvalued and then settles to a reasonable/sustainable value.
- jt2190 3mo ago> There is a massive downside to premature inclusion of a stock that is initially overvalued Define “massive”. SpaceX is only 1.2% of QQQ.
- diydsp 3mo ago[dead]
- idiotsecant 3mo agoCan I please have 1.2% of your total net worth
- fragmede 3mo agoSure, just give me SpaceX shares equivalent to 1.2%.
- idiotsecant 3mo agouh oh I think you lost the thread of metaphor there.
- fragmede 3mo agohow embarrassing! Look, your joke was "If it's only 1.2%, hey, that's not that much, just give it to me for free!" We don't have to believe SPCX is worth whatever it's trading at today, but that 1.2% isn't simply being given away. Under capitalism, money is exchanged for goods and services.
- necovek 3mo agoFWIW, I read their joke differently: you were the one who said "only 1.2%", and they turned that on you by asking for you to part ways with "only 1.2%" of your net worth. They are not questioning money exchange, they are questioning the "only" part, claiming this is significant.
- idiotsecant 3mo agoYes
- jt2190 3mo agoNo, but I will bet you that QQQ will not loose 1.2% of its value due only to SpaceX going to $0.
- JumpCrisscross 3mo ago> Sometimes they're buying an index fund because they don't have the time to research individual stocks and sometimes it's their pension investing Then they should buy a broad-market fund. The kinds in which new issues are a tiny fraction or, if it’s following something like the S&P 500, not included at all. Following the Nasdaq 100 and then complaining it has too many risky tech plays is a bit silly.
- alistairSH 3mo agoThen they should buy a broad-market fund. Like a Russell 1000 fund? Oh wait...
- JumpCrisscross 3mo ago> Like a Russell 1000 fund? Yes. A fund that doesn’t choose what is and isn’t a good investment. Total market means total market. If you don’t like that, the S&P 500 is bigger than those for a reason.
- kasey_junk 3mo agoThe reason you know the people complaining the most about this aren’t serious is that they don’t lead with crsp and vti. They did change their rules, they did it fairly specifically for spacex and it did drive inclusion in a major index fund (perhaps the biggest one). Now me personally, as a holder of vti I am good with the change and my included exposure to spacex. Further I think mostly complaining about the inclusion/exclusion of a single name in an index _defeats the point_. But for those decrying the shenanigans crsp and vti are the example to go with.
- JumpCrisscross 3mo ago> crsp To the extent there is potential bullshit, it is here.
- alistairSH 3mo agoExcept Russell did change their rules in 2026. Yes, in theory to more closely represent the state of the market.