>Forcing it into our retirement funds, 401ks and IRAs.
Not just forcing it into. Forcing the funds to fight for it betting the stock rice higher and higher in a runaway style - the effect created by limited float and high valuation as the funds tracking indexes would try to get the amount reflecting the proportion of the valuation of the company vs. the whole tracked index valuation, and with such huge valuation the limited float leads to the price rise (similar to the short squeeze) and the higher the price on the float the higher the valuation, rinse and repeat...
Some index funds are not obligated to perfectly replicate the index by buying shares, FXAIX (Fidelity S&P 500 mutual fund) has the option to use futures, swaps, options, and statistical sampling in addition to buying equity shares to try and replicate the returns of the index.
That's exactly what happened with Nortel in the dotcom crash. Everyone's pension and retirement tied up in a company that couldn't turn a profit and was, at its peak, 38% of the TSE300.
I don't think dominating an index to anywhere close to that degree is likely here, but I wouldn't be surprised to see some similar strategies being used. Changing the rules is already from the Nortel playbook: The Nortel Rule allowed index funds to have over 10% of their holdings in a single stock.
I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.
Sure, it'll only be ~2% of the index if it opens where they want to. But in the downside case where it meanders long enough for significant amounts of its stock to make it in to public hands and then goes to 10x revenue (i.e. down 90%) , you've allowed a company to engineer dramatic changes in index rules resulting in a transfer ~1% of S&P 500 market cap from index funder holders to its bagholders^W privileged insiders^W^W investors.
Yes a -1% day should be nothing to a long term holder. Yes they're buying the market; if the market is wrong they shouldn't really have any recourse. But one can also understand that a -1% day that accrues ~entirely to the benefit a small group, who appear to have engineered that outcome has much more emotional valence than a typical down down. It doesn't feel like a bad day on the market, it feels like a heist.
> I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance.
If a 1 to $1.5t IPO that was fast tracked onto the S&P500 and then hoovered up a bunch of index fund money becomes a dud, the organic rebalance is going to start with a full reassessment of if index funds and the S&P can be TRUSTED.
Its very possible it will be more than a blip, although to be fair if it isn't it's going to be the sort thing you aren't going to dodge.
Oil/Gas/Petroleum is essential for our economy to function, and the line between "ethical" and "not ethical" is a dial (one among many that all need to be tuned together), not a switch.
$PTL/Inspire does not adjudicate "dial" ethical issues, just switches -- company practices/policies that it views as black-and-white good/bad. "It would be ethical if you produced N% less" doesn't fit that category.
Most of the examples I provided are due to differing country codes; their site fails to recognize things like Alphabet trading on a Mexican stock exchange is still the same company:
https://finance.yahoo.com/quote/GOOGL.MX/
$GOOGL.MX scoring differently than other $GOOGL listings makes me extremely skeptical that humans are diligently creating these scores (finance professionals should've recognized that secondary listings like $GOOGL.MX don't need their own scoring)
Scores on different exchanges may be due to varying behavior by international subsidiaries -- MSFT in Australia may be doing something objectionable that MSFT US does not do, for example. I'm not sure though.
What I think is more likely is that it's a dumb oversight in the web app and/or data - maybe an intern stubbed out international stocks and it got pushed to production
Secondary listings allow entire companies to trade on multiple exchanges (not just corresponding subsidiaries)
So I agree that it was likely just a mistake to list multiple listings of the same companies, but the fact that they usually receive different scores proves their process isn't diligent:
* $GOOGL.MX is dinged for multiple non-Mexico-specific violations that the other listing isn't
I think the pipeline between (1) and (2) is probably tight within the company (probably a few big Excel spreadsheets) and the (2) side has a lot of brains.
But the (1) side needs to do more work on the pipeline between those spreadsheets and the Web, and maybe hire more/better software dev help for that. They'd do better to use Postgres as their source of truth.
If one wants to gamble on the grift, that is what options are for. Otherwise, we might as well start adding NFTs to the indexes if fundamentals do not matter. Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.
https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.")
> Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.
Yup. Coupling this change with "oh, and btw, we also want the option to be able to only put out annual or biannual earnings reports not quarterly" means "We want to offload even more risk."
In 2025 VOO returned 17.82% vs VOOG returned 22.11%. XMAG’s trailing 1-year return through late 2025 was around 9–15% depending on the measurement date, as the Mag 7 dragged badly in early 2025.
VOOG has returned 18.28%/yr over 10 years vs 15.63%/yr for VOO, a meaningful gap driven almost entirely by Mag 7 dominance. XMAG has no 10-year track record.
Certainly, you have done well over the last ~18-24 months if you have exposure to the AI investment exuberance (VOO), just as you did well if you had exposure to certain securities during ZIRP or the pandemic. "Past performance is no guarantee of future results."
Which you only know in hindsight, in the context of this performance benchmark. In that time frame, we had zero interest rate policy, a global pandemic, and now an AI bubble. "Will the conditions or events that led to my historical returns continue?" is a material component of forward looking exposure decisioning when investing.
There are many dubious companies in the S&P500. I don’t see the point in getting selectively heated about this one when everyone seems to be okay with the others.
That’s the way indexes roll. I don’t invest in indexes for this reason.
There is a separate structural issue with indexes that is being ignored here. Indexes were never really designed to accommodate companies going public so late with high revenue growth. A couple decades ago companies went public when they were so small that they could grow into the index. This reflects changes in the nature and structure of the capital markets, these new IPOs are just a manifestation of this reality.
Also given how the S&P weights, it'll have about as much sway as DoorDash.
Annoying they pushed it into the indexes, but like you said, we've also never had a company come out in the 1T range or even the x00B range. These indexes are supposed to represent the market and can't ignore a 1T market cap company for very long.
EDIT
One other thing to add, is that we still do not know what the stock will price at. It's already come down once, and as more information comes out it can continue to come down until it's finally priced the day before the first trading day.
>Forcing it into our retirement funds, 401ks and IRAs.
Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday?
I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500.
You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being added to it. I can't believe people are just running with this narrative as-if its logically consistent with what they believe. It's manipulation.
> Musk advisers have reached out to major index providers seeking ways to secure earlier inclusion in market benchmarks to lift shares
> Advisers for the company, which recently merged with xAI, have reached out to major index providers, including Nasdaq, to discuss how SpaceX and this year’s other hot startups might join key indexes sooner than normal, according to people familiar with the matter.
> SpaceX hopes to skirt traditional rules in an effort to bring liquidity to its shareholders sooner as part of its planned IPO. SpaceX advisers have sought index policy changes that would fast-track its entry into major indexes for the company and benefit other highly-valued private companies, the people said.
This is simply not _companies being added to SP500, etc._ as you say. This is forceful change of the rules so these companies can reap benefits and it optics is that funds are being _forced_ to buy in.
Right. You can not like the way it was added to SP500. But adding a stock to the SP500 is either forcing them to buy it in their 401k or not. Was Dell being added in 2024 forcing people to buy it?
This is an honest headline:
"SP500 Bends Rules to Include SPACEX in fund At Launch"
With the change to only five days of being publicly traded requirements, incentivising market makers to keep a high valuation becomes very cheap.
After five days the index funds have to buy at the last price making it final.
In other words even if the vast majority of the market believes it's worth much less, they can force a high price and force basically everyone to hold it via retirement funds.
You've been missing important parts of the articles, or perhaps the ones you've seen aren't very informative. The concern is that SpaceX reached out to the indexes to get the rules changed (https://www.reuters.com/business/nasdaq-proposes-fast-entry-...); under the old rules, they would have had to wait much longer before being added. This doesn't prove anything wrong, but it's pretty suspicious, because why should SpaceX care if they are or are not in some particular list of stocks?
And why did SpaceX want the rules changed? Because anyone holding those passive indexes (a huge percent of holdings) would be forced to either liquidate them or invest in SpaceX
Is there a relevant distinction you are trying to make, beyond "well, actually"? Call it something else then, like "enshittification of index funds" but it's still the same overall picture of getting money from people who otherwise wouldn't have invested in it
> For broad indexes like the S&P 500, it would be impractical or expensive for an investor to construct the right proportions in a portfolio. Index funds do the work by holding a representative sample of the securities. S&P 500 index funds, the most popular and oldest such funds in the U.S., mimic the moves of the stocks in the S&P 500, which covers about 80% of all U.S. equities by market cap.3
So while yes, people are parroting things they don't understand, so are you.
Patrick is my youtube finance news GOAT. Hilarious and deeply detailed videos on some of the craziest shit going on in finance. If you're interested in the nitty gritty details of portfolio management, he also has a bunch of lectures at the beginning of his channel pre-"content creator"-era that are like sitting in a university classroom. Very good stuff.
Unfortunately I have very little knowledge of the historical stock market and if this order of magnitude of bullshit valuation has ever occurred before.
Holy crap is that an amusing/depressing video. Assuming the financial shenanigans outlined in it are even partially accurate, how the heck is this getting allowed?
When it comes to dealing with the abuse of power by those who hold power, the question is not "who's allowing them to do this?", it's "who's going to stop them?".
> The irony is that this may be a $0 revenue user for Grafana Labs.
Why is that ironic? Since Mimir is open-source, $0 revenue users are expected. AFAIK, Grafana Labs relies heavily on go, typescript, and linux, without necessarily being their top financial contributor. They could have kept Mimir proprietary like Splunk, but whether that would have attracted the same level of adoption or community contribution is another matter.
It already exists, it’s their Bring Your Own Cloud offering.
It’s to retain customers that grew big enough on Grafana Cloud to justify having their own in-house team run the tools instead. So Grafana offers them a pricing where the Grafana engineers operate the platform within the customer’s cloud account. Very large customers get to keep not having to operate and build/hire for the expertise, and save some money.
Sure some companies are big enough to make it worth it and still want to run their own OSS observability stack, but it’s generally not going to be popular with executive decision-makers, so it likely will remain rare. And if they do run it, Grafana still benefits from their contributions to AGPL code.
On the low-spending end, OSS users not buying cloud would not really be a serious revenue concern. They just don’t spend enough. You use cloud if tou have super broad product usage, so you don’t have to run and maintain Grafana, Mimir, Loki, Tempo, Pyroscope, k6, etc. all yourself.
If you don’t want or need all that, you run Loki+Grafana yourself and enjoy.
You can also build a mesh network using standard wireguard. While manual configuration requires exchanging keys and settings between devices, many ansible playbooks can automate this process with minimal effort.
Exactly! For instance, we had pull-based monitoring 20 years ago (Zabbix et al), but we abandoned it because it scaled poorly, favoring push-based agents (for InfluxDB, KairosDB etc). Now Prometheus is all the rage, yet we’re hitting the exact same scaling walls these systems had before. In a few years, we’ll rediscover push agents and call them the best thing since sliced bread.
Yup, same way people are starting to realise/remember having your compute next to your data is a good idea (maybe lambdas/serverless are not so hot because they get in the way of this).
Spacetimedb, convex, etc are basically the revenge of stored procedure.
> Ask a twenty-two-year-old to connect to a remote server via SSH. Ask them to explain what DNS is at a conceptual level.
Modern IT has become a ubiquitous commodity, much like the car. You don't need to know how an engine works to drive; while that knowledge might make you more efficient, it isn't strictly necessary to get from A to B. Besides, most twenty-two-year-olds ten years ago didn't know how to use ssh, either.
However, if you want to call yourself an engineer (and work in the field), you must understand the underlying mechanics. IMHO if you want to defeat a competitor today, you don’t need industrial espionage - you just have to cut their internet and/or AI subscriptions. Modern vibe engineers would struggle to function.
> The man page is dead for most users. The RFC is unread by most developers who depend on the protocols it describes.
Well, those who are accustomed to using man pages still use them today. I find them far more accurate than whatever an AI might spit out at any given moment. As for RFCs, they were always read by a small population - either those implementing the protocols or the few of us who like to brag about obscure technical details.
> You can now write complete programs without understanding what a single line of them does... until something goes wrong in production at two in the morning and you are completely without tools to respond.
I’m not worried about this. When things go south, there will still be experts who will know how to fix them. But since those experts will be fewer and farther between, they will likely charge $1k/hr, and rightfully so. If you are in that field, more power to you! :D
Used computers for about 35 years before the first time I first tried to "connect to a remote server via SSH". Go figure.
DNS is a phone book, I think!
But yeah, maybe "bad examples" by the author.
The one that really confuses me is this, though:
> You’ve built a generation that can’t extract a zip file without a dedicated app and calls it innovation.
Sorry, what are you saying? Software exists to unzip files. It used to be a "dedicated app" like WinZip, 7zip, WinRAR, etc. Now it's built into Windows. Or you use the 'unzip' command in Linux.
> However, if you want to call yourself an engineer (and work in the field), you must understand the underlying mechanics. IMHO if you want to defeat a competitor today, you don’t need industrial espionage - you just have to cut their internet and/or AI subscriptions. Modern vibe engineers would struggle to function.
True, but on the other hand, when I started programming (hell, even before the whole LLM craze began) and you took away my internet/stackoverflow/google I would also drastically lose productivity. Especially in my more junior years, and later, of course I could still write code, but if I had to figure out how a certain library worked or why a certain error in the auth layer happened, without internet I would be nowhere.
Either read the source code if you have it, or read the docs and do your best. That's how it worked when I was learning to code as a middle schooler in the early 90s.
In grad school I worked on TinyOS, and my advisor told me to print out the source code and spend a week reading it until I knew how to make the changes I wanted.
When I worked at Google there was no external documentation to use, so if you couldn't find the docs, you better figure out how to read the source. They have very good code search there.
I dont think the average power user needs to understand DNS. Knowing just that it can be changed (and can fix things or break things and whatnot) is probably already plenty.
Connecting to SSH seems like something a "power user" should be able to learn but not necessarily know already (probably more likely they know what a VPN is)
AFAIK Stripe and Plaid support only a fraction of the countries that PayPal does. And PayPal is still a global brand - recognized by almost everyone, everywhere.
"I’m not a mechanical engineer, but I watched a five-minute YouTube video on how a diesel engine works, so I can tell you that mechanical engineering is a solved problem."
> it assumes companies that are replacing labor with LLMs are willing to pay as much as (or at least a significant fraction of) the labor costs they are replacing.
And it’s worth reiterating that most (all) of these LLM/AI providers are currently operating at significant losses. If they aim to become even modestly profitable, prices will have to increase substantially.
[1] https://www.youtube.com/watch?v=IHD8BDFYyGI
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