Comment by JumpCrisscross
18 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.
> 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