Look, if it makes you feel better, I'm happy to state that I thought the SpaceX IPO price was too high and that it is probably still too high. But in the long run, it might turn out to be a great investment.
I believe that the Anthropic IPO price will be too high, but also in the long run it might turn out to be a great investment.
The most important thing I believe is that this is what I signed up for when I bought lots and lots of VTI. And that I can change to a different set of investments pretty much instantly for 9 hours a day, 5 days a week. With no tax hit because it's in my retirement account.
There is a difference between SoaceX and Anthropic. The former is objectively ahead of competitors by many years while Anthropic is at best by few months and pressure from open weights models is increasing.
So even if one believes in AI the rational choice is to invest into hardware that AI companies needs (GPUs, gas turbines, batteries, solar panels)
The Russell indices, and other indices like the CRSP total market index, might include newly public companies like SpaceX, but the relative weight of them in the index will be float-adjusted, so a company like SpaceX that has kept a lot of its shares locked up will be underrepresented in the index compared to a more established public company.
To be clear, while the CRSP fast tracked SpaceX’s admission to their total market index, that policy (which states that if a security's total market cap is larger than the breakpoint of the CRSP US Small Cap Index, it is can be added after 5 days of trading) has been in place for at least a decade. Unlike SpaceX’s admission to the Nasdaq, this did not represent a change in policy.
CRSP adjusted their methodology prior to SpaceX IPO being announced. It's part of a larger discussion about what the purpose of an index is and how people invest. Vanguard is not out to screw people's retirement up (quite the opposite really). Anyone is welcome to be part of the discussion, but it's hard to get anyone to take you seriously if you only come out of the woodwork when something "bad" is about to happen.
> you saying you know exact number affected by index drama, and it is small? What is that?
I'm not doing it again for Anthropic. The finance/crypto influencers have clearly found a pitch that entertains.
For SpaceX, $5bn of U.S. funds and $9bn globally were "forced" to buy [1]. Out of $200bn total buying over the first three days [2] and like $45 trillion of index assets in America alone [3].
No, that's the upper end of what it could possibly be. It's what would happen if every manager in the first days after the IPO immediately bought the share. Most indices don't work that way, they rebalance over time, in part to avoid this sort of crowding. (They also have latitude to accept and reject index specifics, e.g. around buying new issues.) Managing tracking error against transaction cost is the whole business of passive management.
Also, let's use $17bn in forced buying–globally–and $12bn domestically. That's just not enough to move anything. It's also a vanishing percentage of total index assets. You're again talking about 0.04% of index assets going to what remains a multi-trillion dollar asset.
How? Which index 8x'd its SpaceX weight because float went up?
> the question is that its bunch of dudes dipped into unqualified investors savings
Unqualified investors? What are you referring to?
There are people who really want this to be a massive scam. And sure, you could argue that like two idiots who didn't know how indices work got duped. But you can't argue it was massive, either in capital-markets scales or even within the scale of the IPO.
Instead what I've seen is a bunch of financial influencers blowing a curiosity out of proportion and then doubling down with misinformation while a bunch of people traded into and out of indices for no particular reason.
there is increase in productivity of both types of employees: good actors who want to deliver on quality of work, and bad actors, who now 20x weaponized in generating all kind of slop. Catching second type is now very nontrivial problem.
OI isn’t more “actual” than EPS. I remember back when Yahoo traded for less than cash and liquids [1] because investors didn’t trust management not to blow it on stupid shit.
Yes. But framing one as “actual” implies it conveys broad, ground truths better than the other metrics. It does not. The ground-truth metrics would be forward ROA and ROIC.
> The ground-truth metrics would be forward ROA and ROIC.
that's not ground truth in environment when landscape (AI) dramatically changes every quarter, and investments are uncertain bets with huge win potential.
Your ground truth metrics are: 1. How healthy core business: operating income. 2. How aggressively company reinvest: net - operating income.
Its just interesting how wall street views ant and google as the same caliber companies, even google has way more stronger baseline and ant is way more under the water.
They can't juice, because advertisers are now good in calculating conversion rate, roas, cpa, etc, so they would shift budgets to other channels like overnight if see Google underperforming.
There's a reason why GSP (Generalized Second Price) auctions are called "truthful auctions", and that's because they elicit the true value as the bid from the advertiser (in theory).
So (in theory) advertisers will lower their bids if they're not getting the desired value from the clicks; and over time some will migrate budgets to other channels (like "influencers"? shudder ...).
I don't think so. First price auctions are not truthful, and advertisers hate them. But there are 50 shades of gray between a second price auction and a first price auction.... if you get my drift.
Of course the big spenders on Google with the multi-million dollars advertising budgets won't just change their spending behaviour over night. That takes time - like anything in big corporations.
Sort of. It really does depend on the company and how they're set up. Like, brands using agencies or more non DR advertising only update on marketing mix models which are much slower.
what channel actually provides most of these ad buys that would satisfy their ad dollars?
Google has been sued for being a monopoly, and it's not because they're just really good. It's because there's basically no other market that hits any of the dollar costs.
Ad tech started it's migration to first party auctions before 2020 including Google. This is old news in ad tech. Not sure about the correlations the X poster is making.
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