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.
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.
> 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.
Yes, which is why the news that S&P isn't changing their rules is kind of notable. Vanguard's S&P 500, $VOO, just hit US$ 1 trillion AUM; the next biggest, $IVV, is just over $800B; $SPY is just under $800B.
As they should have. The rules were in flight with a layover time measured in days on assets that are managed on the timescale of years. There was a legitimate reason to act urgently. It's easy to make claims in hindsight but the information on hand it was 100% the right call to protect your investments.
This is not misinformation. Misinformation is saying the proposed rule change and their proximity to trillion dollar IPOs introduced no risk. Please do not spread such misinformation.
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.
> 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.
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'?
So you are happy with this outcome, but also so upset at the people that evangelized your preferred policy position that you think HN readers should cut them from the information diet?
Seems most likely that the public outcry actually influenced this outcome, so I don't see why the nuances of alarmism about it (imminent decision vs fait accomplit) should nix an entire information source.
> you are happy with this outcome, but also so upset at the people that evangelized your preferred policy position that you think HN readers should cut them from the information diet?
I'm fine with this outcome. I genuinely don't care about HN readers' opinions on this. I posted the original consultation to HN to crickets [1]. It's abundantly clear that people want to use this as a useless vector for griping.
> most likely that the public outcry actually influenced this outcome
Nope. Lots of reasons to show how and why that is the case. From personal connections to the timeline of the decision making. But I'm sure that's how the same YouTube commentors who misled the first time will spin it to great effect...
> I don't see why the nuances of alarmism about it (imminent decision vs fait accomplit) should nix an entire information source
Because they're bad information sources. They're terrific entertainment. And if you recognise that, keep subscribing. But this is in line with the numpties who listen to All In like it's the gospel.
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".
> 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.
> 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...
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.
> 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.
Yes, which is why the news that S&P isn't changing their rules is kind of notable. Vanguard's S&P 500, $VOO, just hit US$ 1 trillion AUM; the next biggest, $IVV, is just over $800B; $SPY is just under $800B.
* https://etfdb.com/compare/market-cap/
* https://www.tradingview.com/markets/etfs/funds-largest/
That's about USD 2.5T.
As they should have. The rules were in flight with a layover time measured in days on assets that are managed on the timescale of years. There was a legitimate reason to act urgently. It's easy to make claims in hindsight but the information on hand it was 100% the right call to protect your investments.
This is not misinformation. Misinformation is saying the proposed rule change and their proximity to trillion dollar IPOs introduced no risk. Please do not spread such misinformation.
VTI uses crsp and is very large
Fourth largest, after three S&P 500 ETFs:
* https://etfdb.com/compare/market-cap/
and I think they have a non-ETF branch as a mutual fund that is larger
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.
> 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.
> 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'?
> So why change? You're not building a case for why this change is needed
It has changed loads of times. Nobody noticed any time. Including this one. (Look at flows into and out of related funds.)
> Is there even another Nasdaq 100 company like SpaceX?
Right now? No. Including SpaceX. By the end of the year? Probably a few.
> Is it a fund or just an index? If an index, what are you monitoring when you cite 'no outflows'?
Covered assets. Indices license their indices. Funds pay that royalty.
> I opposed the rule changes at S&P
So you are happy with this outcome, but also so upset at the people that evangelized your preferred policy position that you think HN readers should cut them from the information diet?
Seems most likely that the public outcry actually influenced this outcome, so I don't see why the nuances of alarmism about it (imminent decision vs fait accomplit) should nix an entire information source.
> you are happy with this outcome, but also so upset at the people that evangelized your preferred policy position that you think HN readers should cut them from the information diet?
I'm fine with this outcome. I genuinely don't care about HN readers' opinions on this. I posted the original consultation to HN to crickets [1]. It's abundantly clear that people want to use this as a useless vector for griping.
> most likely that the public outcry actually influenced this outcome
Nope. Lots of reasons to show how and why that is the case. From personal connections to the timeline of the decision making. But I'm sure that's how the same YouTube commentors who misled the first time will spin it to great effect...
> I don't see why the nuances of alarmism about it (imminent decision vs fait accomplit) should nix an entire information source
Because they're bad information sources. They're terrific entertainment. And if you recognise that, keep subscribing. But this is in line with the numpties who listen to All In like it's the gospel.
[1] https://news.ycombinator.com/item?id=48054324
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".
>> 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.
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.