Fast entry rules are terrible.
There is an old adage IPO - It's Probably Overpriced.
Warren Buffet explained why: It's the issuer who chooses the price and time to enter the market. They will pick circumstances that suits them best. The chances that an IPO is a better deal than multiple other companies available in the auction market at that time which didn't get to choose the timing is close to 0 and it's not worth thinking about it - just don't buy IPOs ever.
I don't care about profitability, sustainability, ESG scores or anything like that. If the market is pricing unprofitable company at hundred of billions maybe there is a good reason for it. I do care about market having time to evaluate the company so index funds buy at fair prices. For this you need time and enough float and volume. Time being the main factor.
> Fast entry rules are terrible
> just don't buy IPOs ever
Of late the markets have become a casino. There is a large retail population that bets on options. Betting on IPOs is just another opportunity for such folks. By bending the rules Elon and others are trying to make it a more favorable bet for retail ensuring a near-term pop.
Kudos to S&P for standing up and sticking it to the man. And, woe to JP Morgan, Morgan Stanley etc for pushing overpriced paper, and on nasdaq etc for bending rules. This will be remembered later as the peak (my opinion).
Maybe agentic PRs made it to production and performance cratered.
On a serious note I feel the same. Google is slow these days and the slowest and least reliable service of them all is Gemini. Sometimes I don't even know if it hang already (no error messages) or if it's still "thinking".
You are giving up equity premium for the time till everything settles. You will also not know when that is. It's going to be more like a long term ticking bomb that may take years to detonate.
Yeah it's years because they will slowly unload it to entities that are forced to buy (and as they do those entities will be forced to buy more).
If you have money invested in those ETFs I think you may want to pay a bit more attention rather than making sarcastic comments unless you want to end up with 5%+ of your portfolio being invested in hopium by the end of 2028.
The threat is to end up with the bag, not that the bag explodes this month or the next.
> Yeah it's years because they will slowly unload it to entities that are forced to buy
I get your logic, but why all the handwringing over the short time frame for inclusion in these funds (days instead of a year)? None of that should be relevant if it's going to take so long to play out.
> unless you want to end up with 5%+ of your portfolio being invested in hopium by the end of 2028.
OK so, going back to the original question: the play is what? Move into bonds around IPO time and move back in when everything craters?
>>I get your logic, but why all the handwringing over the short time frame for inclusion in these funds (days instead of a year)? None of that should be relevant if it's going to take so long to play out.
It matters at what price the forced buying starts.
>>OK so, going back to the original question: the play is what? Move into bonds around IPO time and move back in when everything craters?
It's hard to say what's the play is because:
1)For many people making any kind of "play" triggers a tax event
2)It's not clear what ETFs to choose as currently there aren't many good options.
Imo one decent choice out of available ones are ETFs based on MSCI World Quality Factor index. It's not ideal because it still excludes companies like Berkshire Hathaway (because of accounting rules) but it avoids many suspicious companies (like MSTR) as well as mega IPOs. Unfortunately those are more costly (0.3% instead of like 0.05%). If you are in EU you and want world wide exposure you still need something for emerging markets (EU based ETFs based on that methodology exclude emerging markets).
You can also become an active investor but that's a job and I don't think many people want to take on it.
The main problem with going with bonds is that you are giving up equity premium and you still need to time the market for a comeback and that's very difficult.
It is a liquidity event for Elon Musk, and people like Elon Musk. What they do with it, hard to say. But, the forced buying by institutional investors will push the price of SpaceX upward based on nothing. SpaceX revenue was $15.8 billion last year, and its profit was negative $2.4 billion, its AI business is an also-ran, Twitter has declined to a fraction of its value before the acquisition.
There's no there there, so anything that props up the valuation of SpaceX puts money in scammers pockets at the expense of everyone else exposed to the stock.
>>If people really don't want SpaceX in their S&P 500 tracking ETF, we should see a S&P-ex SpaceX in short order.
"People" don't know much about finance to put it mildly.
ETFs are created by market demand. Even "factors" ETFs are often based on completely irrational things like dividends, P/E ratios and other meaningless metrics. This happens because people are easily seduced by narratives ("solid dividend paying stocks", "low P/E ratio - good returns") which are plainly wrong but tempting to an average person.
Most people realized they don't know anything about finance and would like to pay someone (their fund manager) to make responsible decisions and expose them to wide market while avoiding blatant manipulations. Unfortunately the incentives are misaligned here. The managers' incentives are somewhere else. They are not paid by long term performance of their fund and they are disproportionally penalized for taking contrarian decisions.
People being force feed those mega IPOs losing money on them is bad for others as well - there will be less wealth for productive investments and more in hands of "players" (or scammers if you want to call it out). There might be a crash. Trust in financial market will plummet and hostile regulation might arise which other market participants will pay for even though they are not to blame.
I will not have exposure to those mega IPOs but I am in privileged position because:
-My understanding of financial markets is much better than that of an average person.
-I have quite a bit of time to follow all of it and react in time
-I pay 0% capital gain tax and use a broker with nearly 0 fees which allows me to rotate for free (almost)
-I know where and how to move my money so I don't lose advantages of wide market exposure
It took me a lot of effort to set it all up like that. An average person falls short on all of the above and is not in position to avoid donating part of their pension fund to Musk and Altman though. It is still bad for me for reasons mentioned above.
The issue is raised a lot but there is less and less time and I don't think it will hit mainstream before IPO is done and pension funds/passive investors will be forced to buy it.
It really does look bad: low float multiplier rule (that will overweight SpaceX) introduced very recently, fast inclusion mechanism, insiders being allowed to sell faster than usual etc.
It all looks like an orchestrated dump into passive investors/pension funds/other ETF holders.
Investing in IPOs is a terrible strategy historically. Here we have several mega IPOs incoming with rules being re-designed just for them to be included faster in your "passive" portfolio.
It will overweight SpaceX less than the old rule which was binary and weighed at 100% as soon as the float passed 10%. Which based on rolling lockout periods will probably be in the fall.
Yep. He mentioned recently in his JetBrains interview he wants Zig to be a language for the next 50 years. Rushing 1.0 for the sake of signaling to the wider industry today would be actively harmful to that goal.
Too bad it will not be adopted for anything serious in the next 50 years. There is no reasonable value proposition from a business standpoint for picking zig over rust. It is already the reality in much of the tech industry that Rust is filling the space previously occupied by C++. The fact that there now exists a safe low level language is legitimately a paradigm shift. It doesn't matter how many shiny cool things zig adds, being unsafe means it a technology stuck in the past.
Only if you doing something thousands of people has done before.
Anything new, even very simple and you are on your own and Python is 100x slower than naive C implementation on many tasks.
Last little project I remember is writing a solver for a puzzle game my friend published. Python just doesn't work at all for such tasks.
I think you are wrong about speed of those libraries as well. In my experience naive code designed for a specific task beats highly sophisticated general code and it doesn't take a rocket scientist to get huge speed-ups over some well established fast library.
For me ads on Instagram are often spot-on, same with Facebook although I don't check that too often.
Google search always seemed completely off, I don't remember seeing one helpful ad here (helpful being defined as an ad of something I might be interested in buying).
I don't care about profitability, sustainability, ESG scores or anything like that. If the market is pricing unprofitable company at hundred of billions maybe there is a good reason for it. I do care about market having time to evaluate the company so index funds buy at fair prices. For this you need time and enough float and volume. Time being the main factor.
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