Comment by marsten
15 hours ago
In many ways investing in a very late IPO like SpaceX, Anthropic, or OpenAI is the worst of all worlds for the public investor.
On the one hand you'll never see a 100x return – that's been captured by private equity. But there's still a lot of long-term risk because these companies haven't proven they can deliver free cash flow to justify their valuations. Investing in SpaceX or Anthropic at $1T valuation is very different from investing in Apple or Nvidia.
And think about it.. Because they're so large, Index funds are buying at most 1 year after going public.
The average investor has been lulled into feeling the index is riskless.
I suggest everyone to find a video online by their choice of podcaster interviewing Mike Green to learn more
It’s not riskless, it’s just the benchmark that all active investors and their associated podcasters have to beat.
Active investors usually fall into the same fallacy where people all rate themselves as above average. Mathematically speaking a large portion of active investors have to do worse than average and simply stating FUD about averages won’t change that