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stubish 2 hours ago [-]
This seems a sensible thing to do. If you change the rules on how things end up on your index, you force everyone using that index to reevaluate it. Your index is now perceived as more volatile (and probably is), and all the finance people need to reevaluate the risk of their index funds and decide if it is now 'growth', 'high growth' or whatever bucket it belongs in based on the new risk profile. And then all the portfolios need to be rebalanced. Which all takes time, more time than was being proposed. The sensible thing to do is to create a new index with the new rules.
JumpCrisscross 42 minutes ago [-]
> sensible thing to do is to create a new index with the new rules
It depends. Indices aren’t funds. They aren’t meant to balance investor interests. They’re meant to communicate some metric about the market.
The S&P tells you how big companies are doing in an index optimized to balance representation against trading cost. So in 2005, float was taken into account for weighting (versus just market cap). This made sense. Also, since the start, the S&P 500 has been a committee-based index. Not rule based. This has made it successful; if you want stable and unchanging, you never went for the S&P 500.
bicepjai 42 minutes ago [-]
Glad there are some grown ups in US leadership
ak217 11 minutes ago [-]
So relieved to see this!
d--b 3 minutes ago [-]
Note that Nasdaq and Russel did put in place fast entry rules. S&P is the only one that didn’t.
Good. I'm surprised, though, that the usual fanboys/stans aren't converging on this to protest how unfair the S&P is.
xenospn 4 hours ago [-]
Good.
JumpCrisscross 3 hours ago [-]
The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli, stop following them.
What's the urgency to bend the rules? It is not like SpaceX is banned for good. It will be included as soon as it meets the requirements.
JumpCrisscross 40 minutes ago [-]
> What's the urgency to bend the rules?
If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund.
Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders makes sense; as it turns out, I think both NASDAQ and S&P decided correctly.
1 minutes ago [-]
WarmWash 13 minutes ago [-]
Yeah, but is SpaceX actually worth $1T or does Elon just think that because of how Tesla investors value Tesla?
queuebert 3 minutes ago [-]
Historically a $1T market cap with a PE of 20.0 would be achievable with a $50B/yr profit. That seems easily achievable eventually for SpaceX, as it has actual hardware and services and IP.
AceJohnny2 13 minutes ago [-]
> You’re investing in an actively-managed fund.
I see others are listening to the Money Stuff podcast ;)
harshalizee 28 minutes ago [-]
Not really. The underlying rules for Nasdaq has changed.
The preexisting ruleset was used by investors to gauge their portfolio balance.
Now investors have to revaluate their portfolio based on the new ruleset as their fundamental risks have changed.
thatswrong0 8 minutes ago [-]
Yeah, the rules have kind of made the passive investment active. I don't understand OPs point at all. I don't understand why we suddenly change the rules and rush things, and OP has provided 0 justification for that.
stubish 2 hours ago [-]
What was the common misconception?
JumpCrisscross 2 hours ago [-]
> What was the common misconception?
That the rule change was a done deal. The pitch was some shadowy financial cabal forcing everyone’s retirement savings into SpaceX (which would not have been true even if S&P voted to include, but that’s a separate topic).
The top comment and most of its subthreads are run-of-the-mill alarmism.
throw0101a 1 hours ago [-]
> The top comment and most of its subthreads are run-of-the-mill alarmism.
Most assets don’t follow those funds. And NASDAQ 100 is explicitly tech focused, I support them making the change.
The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500.
The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees by switching target funds.
why_at 1 hours ago [-]
It seems to me like there's a fair amount to be concerned about, I wouldn't consider myself an expert on finance by any means so if you have some explanation of why it's not that bad I'd love to hear it.
Two other indices changed their rules to allow these companies specifically. Pensions and retirement funds rely on these indices to have continual, stable growth. Often the people whose money is being invested don't even have control over its allocation into these funds.
Coupled with the precarious state of the economy due to all the money already flowing through AI, changing the rules to throw retirement fund money into brand new extremely highly valued stocks with P/E ratios in the hundreds seems like a recipe for disaster. It reminds me of subprime mortgages.
JumpCrisscross 1 hours ago [-]
> Two other indices changed their rules to allow these companies specifically
One of which is the NASDAQ 100, marketed for decades as a tech-focused index.
> Pensions and retirement funds rely on these indices to have continual, stable growth
Pensions build their own benchmarks. About 10 to 20% of retirement assets follow these indices directly for a variety of purposes. The S&P 500 aims for continuous large-cap growth, but that isn’t true for most indices, which seek to replicate something random.
> changing the rules to throw retirement fund money into brand new extremely highly valued stocks with P/E ratios in the hundreds seems like a recipe for disaster
The NASDAQ 100 has seen practically no net outflows due to this decision. And most retirement assets don’t blindly follow any index, let alone any single one. I opposed the rule changes at S&P. But the catastrophising was made for clicks and views. Not to inform anyone.
Like, anyone who actually acted on that brouhaha changed out of an index that isn’t going include SpaceX, incurring transaction fees and potentially tax hits (for non-retirement accounts) in the process, and probably cycling into a higher-fee fund.
bonsai_spool 42 seconds ago [-]
> marketed for decades
So why change? You're not building a case for why this change is needed. Is there even another Nasdaq 100 company like SpaceX? Probably not because it would be an obvious point of discussion. So now we need to add a new 'thing' to our definition of tech, then change our funds to adopt our new definition. To what end, with this haste?
> The NASDAQ 100 has seen practically no net outflows
Is it a fund or just an index? If an index, what are you monitoring when you cite 'no outflows'?
FireBeyond 5 minutes ago [-]
I mean S&P had actually drawn up a lot of the changes, regulations, and paperwork for entrants, so it wasn't a done deal, but they absolutely were considering it, and it was a very real "risk".
BoiledCabbage 1 hours ago [-]
>> What was the common misconception?
> That the rule change was a done deal.
What are you talking about? The rule has already been changed in the NASDAQ. That makes it a done deal.
Anything changed can always be undone, but to be clear it has already happened. That makes it a done deal.
JumpCrisscross 54 minutes ago [-]
The S&P change was taken as a done deal. Search that page for S&P. The indices that flipped are less relevant than many individual active managers.
aeternum 3 hours ago [-]
Yes, I think given that misinfo this was probably the right decision by S&P, everyone would be saying I told you so and screaming about providing exit liquidity.
My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.
nothercastle 30 minutes ago [-]
They might but changing the rules for a highly controversial company would do more harm in lost trusts than gain for investors.
JumpCrisscross 3 hours ago [-]
> given that misinfo this was probably the right decision by S&P
The misinformation was almost certainly not taken into account, and it shouldn’t have been.
> everyone would be saying I told you so and screaming
Influencers will scream regardless. It’s what they’re paid to do. The NASDAQ 100 made these changes and is doing just fine.
> will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs
There are lots of indices. S&P largely targets those built around mature companies. If you want a total-market index, those exist and tend to rapidly incorporate IPOs.
insane_dreamer 1 hours ago [-]
S&P wasn't fait accompli, but the NASDAQ 100 was
JumpCrisscross 1 hours ago [-]
> S&P wasn't fait accompli, but the NASDAQ 100 was
Sure. Nobody was properly making this distinction in social media, including on HN. Particularly with respect to the differences in scale and purpose between the NASDAQ 100 and S&P 500.
dogwalker5000 14 minutes ago [-]
The fact that a fast track was even considered is controversial IMHO. People flipping out, especially if their retirement is tied up with those indices, is to be expected. No one wants to be a bag holder for billionaire insiders.
It depends. Indices aren’t funds. They aren’t meant to balance investor interests. They’re meant to communicate some metric about the market.
The S&P tells you how big companies are doing in an index optimized to balance representation against trading cost. So in 2005, float was taken into account for weighting (versus just market cap). This made sense. Also, since the start, the S&P 500 has been a committee-based index. Not rule based. This has made it successful; if you want stable and unchanging, you never went for the S&P 500.
https://www.nasdaq.com/articles/new-fast-tracks-account-olde...
* https://archive.is/15pOn
* https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...
(It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055.)
If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund.
Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders makes sense; as it turns out, I think both NASDAQ and S&P decided correctly.
I see others are listening to the Money Stuff podcast ;)
The preexisting ruleset was used by investors to gauge their portfolio balance.
Now investors have to revaluate their portfolio based on the new ruleset as their fundamental risks have changed.
That the rule change was a done deal. The pitch was some shadowy financial cabal forcing everyone’s retirement savings into SpaceX (which would not have been true even if S&P voted to include, but that’s a separate topic).
The top comment and most of its subthreads are run-of-the-mill alarmism.
Worth considering:
* https://en.wikipedia.org/wiki/Prevention_paradox
And the rules for the NASDAQ 100 were changed, as were MSCI and CRSP:
* https://www.schwab.com/learn/story/some-indexes-accelerate-e...
The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500.
The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees by switching target funds.
Two other indices changed their rules to allow these companies specifically. Pensions and retirement funds rely on these indices to have continual, stable growth. Often the people whose money is being invested don't even have control over its allocation into these funds.
Coupled with the precarious state of the economy due to all the money already flowing through AI, changing the rules to throw retirement fund money into brand new extremely highly valued stocks with P/E ratios in the hundreds seems like a recipe for disaster. It reminds me of subprime mortgages.
One of which is the NASDAQ 100, marketed for decades as a tech-focused index.
> Pensions and retirement funds rely on these indices to have continual, stable growth
Pensions build their own benchmarks. About 10 to 20% of retirement assets follow these indices directly for a variety of purposes. The S&P 500 aims for continuous large-cap growth, but that isn’t true for most indices, which seek to replicate something random.
> changing the rules to throw retirement fund money into brand new extremely highly valued stocks with P/E ratios in the hundreds seems like a recipe for disaster
The NASDAQ 100 has seen practically no net outflows due to this decision. And most retirement assets don’t blindly follow any index, let alone any single one. I opposed the rule changes at S&P. But the catastrophising was made for clicks and views. Not to inform anyone.
Like, anyone who actually acted on that brouhaha changed out of an index that isn’t going include SpaceX, incurring transaction fees and potentially tax hits (for non-retirement accounts) in the process, and probably cycling into a higher-fee fund.
So why change? You're not building a case for why this change is needed. Is there even another Nasdaq 100 company like SpaceX? Probably not because it would be an obvious point of discussion. So now we need to add a new 'thing' to our definition of tech, then change our funds to adopt our new definition. To what end, with this haste?
> The NASDAQ 100 has seen practically no net outflows
Is it a fund or just an index? If an index, what are you monitoring when you cite 'no outflows'?
> That the rule change was a done deal.
What are you talking about? The rule has already been changed in the NASDAQ. That makes it a done deal.
Anything changed can always be undone, but to be clear it has already happened. That makes it a done deal.
My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.
The misinformation was almost certainly not taken into account, and it shouldn’t have been.
> everyone would be saying I told you so and screaming
Influencers will scream regardless. It’s what they’re paid to do. The NASDAQ 100 made these changes and is doing just fine.
> will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs
There are lots of indices. S&P largely targets those built around mature companies. If you want a total-market index, those exist and tend to rapidly incorporate IPOs.
Sure. Nobody was properly making this distinction in social media, including on HN. Particularly with respect to the differences in scale and purpose between the NASDAQ 100 and S&P 500.