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https://akademikerpension.dk/ansvarlighed/ekskluderede-selsk...
Good to see it isn't necessarily the case.
The old man is a caricature of Jens Stoltenberg (who seems to be running the Norwegian economic machine rather well nowadays, controversial or not)
There is a huge difference between funding oil extraction that is happening anyway, and funding a company to start extracting oil.
However, this is the intersection of consequentialism, deontology, and virtue theory.
Which is exactly why you wouldn't put it in a company with a ridiculous valuation.
This is about valuation not ESG
> "but our job is to earn money and we can't do that if you hippies keep standing in the way with your morals"
What these clowns conveniently forget is that their job is not just "to make money" but to make money over a span of decades and centuries in the case of the sovereign funds. A long term investment fund that optimizes for the next quarter at the expense of the long term is a bad fund.
And so the ESG and woke "hippie bullshit" is nothing more than the basic capitalism of maximizing your gains by 2100 by not destroying the one planet all your companies are on.
Long term funds do not have the luxury of being passive owners. If they take no role in management, that role will instead by taken by whatever short-term owner walks in next. They don't care about the value by 2100, they just want the company to tear the copper out of it's own walls so they can sell with a profit by next quarter, retail even sooner.
ESG is just another phony way for someone to manipulate stock prices, because it's decided by some committee with arbitrary and opaque ways. And that's why no one takes it seriously any more.
If nothing else, at least these should be choice of users to let them choose based on their values and requirements.
Pensioners should get the same amount regardless of investments, as long as there is enough funding, which it seems there is for the moment.
Of course, if someone wants to risk their own money, they can invest in whatever they want. They can even sell their pension for a cash lump sum and invest that.
In turn you also want democratically elected politicians above that saying “yes, but the people want their money made ethically, so you can’t do that”.
The job of the police is arresting people who break the law, but similarly to your money manager, you really don't want them to do this regardless of anything else, there is more things to consider than just "do everything you can to arrest people", and hopefully the same for your money manager. But also, I might be too European to understand the true value of "money grow regardless of society cost at large".
In a good system both sides fight for their interests, and the outcome is some middle road compromise that optimizes for everyone's benefit.
Why are we pretending that fossil fuels dont provide an immense amount of value for humanity, and that its horrible to invest or support building out any fossil fuel production whatsoever.
Lets not do produce it ourselves, lets just instead outsource it to the gulfs and Russia…
How is this short therm value for people using them? They are drivers of the most fundamental stuff in our day to day lives. Either enabling billions of people cheap efficient transport, efficient agriculture producing cheap food, cheap and efficient global shipping of goods, a great portable and ajustable source of electricity.
I think as of now its a question on how much you are willing to sacrifice human welfare over preserving current nature/environment. Extreme weather has largely been solved for humans, the trend is still less death and starvation caused by extreme weather, we are immensely adaptable and resilient.
Im not sure our current pace of reducing emissions is that horrible. There are reasons to why it takes time. I might be too optimistic, but I think we will largely solve human issues. Nature as you point out, im worried about, although I know less about. And its hard to quantify what the value is for us.
Regarding "the most subsidized industry worldwide", this wikipedia article does not mention any tax revenue and taxation of these companies. Which are stil very often government cash cows and often pays much more taxes than other corporations. The subsidies are straight to citizen's gas tanks and heating bills.
"Subsidies are mainly on consumption,[3] such as a lower sales tax on natural gas for residential heating; or subsidies on production, such as tax breaks on exploration for oil."
In my country Norway for example, we have tax breaks on exploration to incentivize investment in exploration, but you have to take into account that these companies have an 80 corporate tax rate! In many petro states they are straight up nationalized companies.
There is also no value in this. If we owuldn't known about progress through oil and gas, who would say that we would be unable to get to the same point just a 100 years later?
No own would be hurt if we would have achieved this 100 years later but healthier.
It was also ignored on purpose. Oil companies knew very well, researchers knew. Apparently there were big demonstrations here in germany in the 70ties so our parents knew too.
Life came inbetween apparently.
And from a pure calculation point of view: Its actually very easy to switch over to renewable. As of today, we do have everything we need.
The only thing missing is people doing it.
And just to be clear: it would repay itself.
I think the right way to go about this is to tax consumption of fossil fuels in countries where we can afford it and use the money to subsidize green tech/industry.
Its more about being self sufficient. This is something that can easily be weaponized against us. E.g. Russia using Europes own money to finance their invasion of Ukraine.
Why are we pretending that slavery doesn't provide an immense amount of value for humanity, and that it's horrible to invest or support building out any slavery production whatsoever?
Lets not do produce it ourselves, lets just instead outsource it to Africa...
___________________________________
Snide comparisons aside, I'd just say that we can accept that fossil fuels played a gigantic and important role in getting us to where we are, and also acknowledge that we'll continue to need fossil fuels in the near future, but that does *not* mean that we need to accept that investment in even more expansion of the fossil fuel industry is a good idea.
The transition is moving ahead, it just takes time, and we need more technological breakthroughs and innovation. Trying to attack production instead of solving demand, can cause serious consequences, in which the poorest countries in the world would suffer the most.
A lot of this stuff is hard to stop and too cheap to effectively stop economically anyhow, the best solution is distance and preemptive strikes at staging areas.
Do we need Americans weapons? Unlikely and probably counter-productive long-term. Do we need European weapons? Hell yeah!
The amount of military spending europe has, is already higher than russia.
Russia clearly showed how incapable they are, they are not even able to present modern war technology at their freedom parade.
And china we don't fight china.
1) Saves our lives in Europe, by having access to better training and force multipliers.
2) Seeps into the economies of every country in the union through research spending.
Defence is unambiguously a good thing, it becomes a problem if you put an expansionist cunthead at the helm of it.
I'm not a huge fan of Elon Musk but Tesla is a company that produces electric cars (mostly in western countries with half-decent labour laws), it's not associated with any of those things.
I guess one could argue with some merit that the governance is bad enough to exclude it on that basis alone?
Its a gamble.
The current evaluation of Tesla is still higher than real car companies + robot companies + robot taxi companies.
https://www.europeanpensions.net/ep/Denmarks-Akademiker-Pens...
To be clear, this has already happened to some degree. See Paris prosecutors investigating him for the distribution of child pornography. But targeting companies he is affiliated with for his personal behavior violates the principle of the generality of law.
Then there's the autopilot misleading marketing, Cybertruck being glued together with spit glue and duct tape etc.
1 - https://en.wikipedia.org/wiki/Criticism_of_Tesla,_Inc.#Worki...
And where would Norway be without fossil fuels, exactly? That's basically the sole source of your nation's wealth.
As for Tesla and other companies led by Elon Musk... well, yeah, F that guy. But don't throw the proverbial baby out with the bathwater.
[1] https://www.finanshus.dk/wp-content/uploads/2023/02/Pensions...
Checking this shows that the top 2 performers in this graph lost more money (~8%) in 2008 than the bottom 2 (~2%)
You want some risk-adjusted return metric parameterized by average returns and also volatility.
Checking this shows that 12 years is longer than 1 year, and thus is a better metric.
(I have no relationship with Dimensional, nor do I invest in these funds - I just saw them mentioned in a YT video on this topic a few months ago: https://www.youtube.com/watch?v=mqIHa6URUPk )
There's a (rather short for his standards) video made by Paolo Coletti, professor of financial economy at Trento about dimensional performances.
It's in Italian, but both subtitles and Youtube's auto audio translation works fine.
He always includes data and google colabs so people can run tests and verify numbers themselves if they disagree.
https://www.youtube.com/watch?v=j_tBfYHh1J4
[1] https://fund-docs.vanguard.com/F0958.pdf
[2] https://www.msci.com/indexes/documents/methodology/2_MSCI_25...
[3] https://www.msci.com/documents/10199/6bafd9e3-0474-f03b-16bd...
[4] https://investor.vanguard.com/investment-products/etfs/profi...
[5] https://www.invesco.com/qqq-etf/en/about.html
[6] https://stockanalysis.com/etf/vgt/holdings/
[7] https://stockanalysis.com/etf/qqq/holdings/
The problem is that the NASDAQ 100 and most likely also S&P 500, change their rules to permit SpaceX to be added early without traditional time for price discovery. It happens jsut five trading days before the major index rebalance.
After float adjustment SpaceX could be 1% of NASDAQ and 0.7% of SP500, but after full tranche escalation that takes over 130 days, SpaceX weight can be over 3% of NASDAQ and almost 2% of SP500 if the market cap stays near $1.5T.
(I think the price will decrease, so the weight will be smaller)
This is just a ploy to get exit liqudity as brikym, said. SpaceX collects enough capital to pay Twitter acquisition loans and then some, but the IPO not major boost for SpaceX finances. The coming merger with Tesla is clearly in the plans (C stocks).
I didn't realize this. That's really scammy.
If, e.g., all those who opposed those industries had instead bought the industry stock, the people with those ideals opposed to those industries could have at the very least profited from the sale of the stock...which the company itself basically does not see direct benefit from (you are not buying the stock from the company or giving the company any money in most case)...and used/committed that money to even greater opposition. If a catalytic number of those had formed, they could have also even made real impact through shareholder initiatives and actions demanding changes by pressuring board members who rely on votes, etc.
It's one of those nonsensical, moralistic and ...sorry... foolish mindsets that common people have, the idea that simply by not participating the King will leave them be. The psychopathic narcissists in control will never leave you be, no matter how much you virtue signal by not buying their stock from someone else that is not the company or no matter how much you ask or how far you run and beg and ask to be left alone.
Frankly, although I am not certain that it was done intentionally, if I were a major mover and more powerful person, I would propose the very kind of moralizing, self-righteous campaign that has shot the commoners in their feet by getting them to simply check out and not participate in things the could have otherwise controlled a lot more.
So instead of people who actually care...but are clearly rather foolish...all/a disproportionate amount of control and power and money is left to those who do not have those qualms. Hence why none of this "excluding harmful industries" has affected anything whatsoever and we now have square mile measured AI data centers and tens of millions of low climate impact people being moved into high climate impact countries, and we have more war and death and addiction than humanity has seen in 90 years.
In case it is not yet clear to some of us, a stock is like if you went to some second hand/thrift store and bought a brand of clothing that was reviled for some reason or another, i.e., use of child sex slave labor, you giving a thrift store money to wear the second hand clothing not only does not benefit the reviled company, but just alone wearing second hand clothing will likely have more a positive impact than guying some other company's clothing that will later turn out to have used regular child labor.
This is incorrect and, frankly, ridiculous especially in light of your own scoffing at the "foolishness" of others.
The secondary market value for company stock has a direct impact on current and sustained operations in areas including, but not limited to:
- the ability to sell debt and the interest rates at which it can be sold
- the ability to attract and retain executive "talent" with stock compensation
- the ability to attract - or ward off - takeovers and buyouts from other firms
- the ability to expand operations, or development, through follow-up offerings
Your observation of this basic truth (that company shares purchased by at-large market participants don't yield funds directly to the firm) is, of course, correct.
However it is not as profound a factor as you think it is.
You want an ESG fund
Also I dont see how weapons companies are harmful. Unless you're so naive to think defense is not a thing any person or country has to worry about in 2026
You have the market deciding and the rules changing in the same paragraph and nothing's bothering you. I genuinely envy your peace of mind, my friend. Some of us are truly blessed.
Just be honest with yourself. The only reason you and others have an issue is because of politics. You don't like Musk for whatever reason and now you're very opinionated about the internal workings of index selection, when prior to reading about it in the NYT or something, you had no idea.
You don't care about the arcane byzantine process, you think rocket man is bad. I feel bad for people that get so easy manipulated. It's a hell of a way to live your life, waking up and reading corporate media to tell you what you should be angry about today
The pension fund is the customer here. The market is already deciding. You're free to invest your own money as you see fit. The pension fund's money is not yours to decide what to do with.
https://www.ft.com/content/a401b0c0-fcc0-4bae-9f57-e8d5c0957...
[0] https://www.profgmedia.com/p/spacex-stasy
So much wealth is tied up in pensions and it’s folly to let it all go to supporting the U.S. and eschew local investment altogether.
I’m not patriotic enough to spaff my compound interest opportunity on a bunch of dying tobacco, oil, & mineral extraction companies to put any of it to work in the FTSE250.
Elon's visions border on self parody. If I told you that humanoid robots were going to be digging tunnels for the Boring Company you'd have to stop and think if I was pulling your leg.
Yet.
To be clear, I don't support SpaceX specifically, but the amount of resources available to us from beyond our planet are quite literally infinite, only bounded by our ability to move fast enough to get it.
Comets that routinely pass by our planet have rare-earth metals in quantities that we don't even have on the planet at all. Hell, that's where our rare earth metals came from in the first place. Getting access to 100 million tonnes of platinum could totally change how we use the metal, right now it's most effective use is probably within catalytic converters to reduce emissions from cars.
Helium-3 and Deuterium in high quantities can be used as clean fusion fuel, basically clean atomic energy.
I struggle to see how these can't be lucrative in the long term.
How many decades ago were people hyping space manufacturing? Where are the space factories? Where are the profits?
The actual distortion field is around Starlink. Which is the main product and the only one that's (nominally) profitable. It's the one all the hype centers around. xAI is barely even notable in the AI space.
This also makes it possible to judge the size of the distortion field, as Starlink is just an ISP, for which we have accurate valuations. And for what it concerns shareholders, a strictly worse one than a conventional ISP. Space infra is much more expenive than putting some glass in the ground, once.
Comcast is a behemoth of a company doing far more than just ISP. Worth a "mere" $90 billion. Charter Communications is a similarly sized "pure" telecom. Worth $20 billion.
Both of the above ISP companies have roughly 30 million subscribers. Starlink has 10 million. Yet they want $2 trillion at IPO.
A 20x to 100x overvaluation. And what do you get beyond an ISP?
* A private aerospace company that's not doing notably better than the space divisions of old aerospace. (Remember: Starlink is already accounted for so doesn't count here)
* An AI company that has so little demand it's currently handing a bunch of compute to Anthropic for such a deep discount the latter has claimed to become profitable.
* Twitter. Which is worth either $33b if you count Elon's internal buyout valuation, or $10b if you count realistic valuations.
While there is some hype around "The future of space!", the reality is that the long term growth for that is fairly dead in the current geopolitical climate. Nobody's saying it out loud yet but US Aerospace is being replaced. Fewer and fewer US launches will be bought. The EU is even building their own Starlink equivalent.
A significant portion of their valuation is based on this. The spacex private stock price moved significantly based on this data center narrative.
> And for what it concerns shareholders, a strictly worse one than a conventional ISP.
This is ignorance. There is absolutely zero meaningful competition to Starlink in the maritime, aviation, and remote internet markets. 150mbps down with <80ms latency isn’t impressive in a city but it’s mind blowing on an airplane 1000 miles from land.
> The EU is even building their own Starlink equivalent.
No they aren’t. The only somewhat credible competitor so far is Amazon Kuiper(Leo) and they are still nascent.
You also forgot starshield.
In your world, you only see and interpret SpaceX's existing products. You then see SpaceX's eye-watering valuation, and then are confused where this comes from.
Meanwhile, people who understand SpaceX's product line, and the implications these products in five or ten years, can analyze the situation more accurately.
I can tell you are in the unaware group, since you don't mention nor analyze two of SpaceX's world-changing products (Starship and Starlink Mobile).
In his FCC filling he also mentions DCs:
https://docs.fcc.gov/public/attachments/DA-26-113A1.pdf
And yes its absolutly wild.
His Scifi ideas are probably a min of 100 years too early.
And while he doesn't even need his own compute (renting out colossus 1 and 2), he thinks we will send server racks full of expensive hardware into space in no time.
Why?
Because his Space-X Trillion evaluation doesn't make sense if he doens't has payload for Starship.
So how much payload do we send to space? Actually not that much, starlink itself is the biggest change by far. So he builds Starship which he needs for starlink v3 but what then? Yeah Datacenter in space...
That or the good ol’ « dump it on retail » scheme
All this might not make sense in a standard business sense. Real profits might be decades away, who knows. Anyway, people are willing to throw their money at it, because they think it's important.
If they succeed in the long term, it'll easily be the most valuable company on Earth.
SpaceX is growing quite slowly. You could argue that Starship is likely to somewhat accelerate growth.
Starlink is doing well but also growing somewhat slow.
A more rational valuation would be 900b-1000b.
The rest is Musk and FOMO.
Most shareholders don't really care about the company they have shares in.
Yes, eventually, the humans have to sober up, and stock market valuations return to approximately what the economic theories say they should be. But the dangers of betting on that "eventually" are very well known: https://quoteinvestigator.com/2011/08/09/remain-solvent/
Musk, Thiel, Bezos etc. none of these guys have ever said they want to move there.
But, if the index funds don't then there are going to be quite a few shares dumped to make room for the SpaceX share. This could be interesting.
Edit: glad to see vanguard VT tracks FTSE which isn’t impacted. The amount of overvalued spacex stock in VT will be minimal down the line as they use the amount of publicly available shares to calculate the weight in the index, which is the more sensible way to do it, Musk’s scam not withstanding.
Elon is rigging the stock market and getting index funds to invest in companies that are over-valued and thus not stable.
https://m.youtube.com/watch?v=sYA-z0Y8WRQ
https://www.kiplinger.com/investing/what-the-nasdaqs-new-fas...
Buuut if Anthropic does the same and lists on the Nasdaq then I might reconsider.
What’s holding you back? And what alternative investments are you considering?
I recently did homework to decide whether to double down on VOO (S&P 500 index) or to diversify via VXUS (ex-US index), and concluded VOO is better for my risk-adjusted ROI outlook and time horizon.
This just being an incomplete list or is there another reason you name the last two but not Google?
Yes their compute costs are astronomical, but that can be managed down over time by more efficiency or mild enshittification that doesn’t create too much churn.
Because no part of this statement is accurate. They’d like investors to believe it’s very rare but they have multiple strong competitors, most of whom have much better financials, and the entire sector is worried that the open models are going to effectively cap rates below what they need to pay off their massive investments. Lastly, they’re not universally must-have in software development which is one of the domains best suited for LLMs but most corporate work lacks similar correctness oracles and we’re already seeing major corporate customers reconsider the cost/benefit ratio.
None of that means they’re doomed but a lot of stars need to align for them to keep their valuation up. They don’t need to go out of business for investors to lose money buying in at the peak.
It’s pretty depressing to be honest. I don’t know how I could work in any of these military industry companies.
I think you're right that e.g. Anthropic wouldn't be on the block list, because: It's an IT company, and I suspect that even Palantir might make the cut. It is fairly annoying, because my pension fund won't invest in Rheinmetall, SAAB or Kongberg, which I think they should, but they will probably invest in Anthropic, OpenAI, and SpaceX, which I don't really like.
Also, when you buy into an index fund, you are not funding the companies that the index tracks. That’s a misunderstanding of how the markets and index funds work.
You'd sing a different song quite quickly once the threat stops being abstract as you don't get to free-ride on the security a defense industry provides.
They're valued like software companies, but they have terrible margins compared to software. Investors haven't figured out how to value these companies.
What difference with Microsoft, amazon and google? They all heavily support the military.
It really does look bad: low float multiplier rule (that will overweight SpaceX) introduced very recently, fast inclusion mechanism, insiders being allowed to sell faster than usual etc.
It all looks like an orchestrated dump into passive investors/pension funds/other ETF holders.
Investing in IPOs is a terrible strategy historically. Here we have several mega IPOs incoming with rules being re-designed just for them to be included faster in your "passive" portfolio.
Musk is a prominent Trump/MAGA supporter, and Trump has threatened to annex Greenland by force. SpaceX is part of Trump's Golden Dome project, and one of the reasons that Trump wants Greenland is to site ICBM detection and interceptor systems.
Nothing is stopping the US from deploying those in Greenland right now.
The only reason Trump wants Greenland is he's not all there -- Greenland looks big on the map so he's fixated on it.
That would require the (politically unlikely) agreement of the Danish government. See article 2 of the relevant treaty [1]:
"...establishing and/or operating such defense areas as the two Governments, on the basis of NATO defense plans, may from time to time agree to be necessary..."
> The only reason Trump wants Greenland is he's not all there -- Greenland looks big on the map so he's fixated on it.
I agree that that is part of it, but there is more to it than that.
[1] https://avalon.law.yale.edu/20th_century/den001.asp
E.g. https://www.bbc.com/news/articles/cx21669452lo
Even sovereign funds (example Norway) are invested in American tech, funds, and indexes.
It is interesting to think about (from the perspective of an immigrant to Norway) how I moved my life’s savings from the US to Norway.
I’m now fully invested into Norway (real estate, savings, and retirement).
My understand is that Norwegians (and the nordics) have historically looked up to the US as a world leader.
I think that is no longer true and maybe this decision by Denmark is a data point of how the Nordics are changing?
It kind of feels like we all have been caught holding the bag (US reserve currency) and now we have to carefully unwind our position.
I’ve lost my point. Maybe my goal here is to just contribute to this discussion to distract from the exhaustion.
But this has definitely changed for me now. The idea of crossing the border and having to flip a coin is the border control guy a nice guy or not is not appealing as a diabetic who needs his phone to be with him untampered and who doesn't want to sit in a cell somewhere for days/weeks because they posted a funny meme of a person you can't joke about. Or who just witnesses this absolute inequality happening, and who witnesses the leaders of this country coming to my country and giving their support for parties who want me to not marry and who doesn't want to see me existing.
I am just tired. And sad. I wish I could get our relationship back with the US but I don't know... Even if we backtrack from here, get back to the "olden times", it will take a moment until I can enjoy US again.
P.S. Conan is still a treasure!
That is nothing new. It's how it's been forever. And not only arriving in the USA, but also Canada, Germany and other places.
I waited hours in Newark even before the current joke of a government. The risk of being in a jail without my phone which has a life-saving app to manage my diabetes is a risk I am not going to take.
Strategically modifying one’s pension fund choices to prevent having sub-prime companies bundled into a possible success is not a sign of anything. The Nordic nations will attempt to stay allied to the US because survival depends on it. They are much closer to the frontier and Western Europe’s ability and desire to protect them is substantially weaker.
In the event of a fall of NATO far western countries like Spain or Portugal will likely free-ride by virtue of their geography. The Finns get no such benefit.
No, this is just standard pension fund governance.
What are your thoughts on the general consensus of Nordics views and opinions about the US?
As a Dane, I would say yes. Especially among boomers there was always a genuine appreciation of the US and its role as guardian of a rules-based international order and western civilization more generally.
I think that sentiment has gone, even as younger generations have increasingly incorporated English words, music, TV and more into their own, but you seldom hear the same genuine trust in the US as a force for good.
Personally if anyone cares my take is that our economic problems are basically structural and geometric at this point. DC is a circus of people tasked with solving them and with the general competence the process selects for, the problems are in a practical sense unsolvable. So instead we get the tribal war spectacle over who holds the pen. Meanwhile the problems sit on the desk with a blank in the answer space.
How is this even debatable.
How is this even debatable.
Even if the Star Trek utopian future materialises, it is very likely to be a long time from now.
1. SpaceX has competitors. Most are making reusable rockets.
2. SpaceX has no moat.
3. The concept of money itself might change dramatical by the time SpaceX becomes a multi-planetary mega corporation. Investing now may not return returns in any meaningful sense.
And Starlink is a pretty big deal, particularly in a time of conflict where undersea cables are very vulnerable.
If Elon hadn't shifted so far to the right, these threads would be near-universally praising SpaceX despite Starship's struggles.
Starship is meant to answer all those questions about design intent and financial viability and then some. It could readily turn out to be an example of second system syndrome.
A symptom of his fickle nature and erratic behavior, as well as general poor impulse control, all of which rightfully make people skittish with their money and question his judgment.
He had period where he though he can become hero for the democrats due to green cars. It did not worked, neither democrats nor left accepted him as unconditional hero.
The racism, the villingness to cause harm to get more power for himself were there whole time. He was far right the whole time, just became more extreme and open when it stopped being disadvantage.
Especially now that every failure results in a massive wave of negative publicity
It doesn't matter if it's successful or not. Their space business is worth virtually nothing on paper and the funding structures and profit/loss accounts are scary.
The unfortunate thing is, a lot of people have no idea this rule change has gone into effect, and that they're about to get fleeced by a bunch of professional investors.
https://www.kiplinger.com/investing/what-the-nasdaqs-new-fas...
It's legalized theft, and the victims are people least able to defend themselves from it. Most people have no idea what's in their retirement accounts, or track very closely what's being tracked by the index funds they've been told for decades was the safest way to invest in the stock market for non-pros.
Their skepticism seems pretty valid to me
In other words, look one level deeper and you'll see it's not the S&P500 that's overvalued. It's you and me and 100 million other people desperately attempting to make sure young people pay for them for 20-30 years when they're old.
And then you calculate it out ... and see it's not happening. No matter what the number on the account says.
I don't think it is similar therefore.
Imagine in 2010 if investors had real transparency into how much money YouTube or Maps was losing, along with the governance structures to enforce their concerns.
You’re calling it “political motivation” as some sort of blind hate or vendetta out of principle, cutting off the nose to spite the face. But you can no longer separate Musk from politics and aggression towards Denmark.
The pension fund’s assessment looks entirely valid, objective and justifiable to me. But for anyone who personally favors Musk and his political views any dismissal will look politically motivated. It’s easy to cry foul. In this light your shallow dismissal might be just as politically motivated.
If you believe SpaceX is overvalued or do not like the way it is being handled by the big index funds, again, use direct indexing.
akademikerpension is pretty decent fund, it is about 50/50 asset allocation, losing out by only .9% per year compare to a US equity/bond portfolio. Better than many active funds:
https://www.finanshus.dk/wp-content/uploads/2023/02/Pensions... https://testfol.io/?s=h8azNZvMICk
You do not like the valuation ? What should a company that launches 98% of the world's non government tonnage to space (80% if you include the Chinese government) be valued at ? The only company that has figured out how to very reliably launch at a sustained and rapid pace ? Pioneered and is perfecting rocket reuseability ? The only thing we can can say with a degree of certainty is that $2T is either very overvalued or very undervalued. If you believe that space will become a huge part of our economy in the future, and believe that SpaceX will play a significant role, $2T is cheap. Dirt cheap. The only way to prosper is to be bold.
For all those who come here to say that they do not like Elon or that the valuation is ridiculous, or that SpaceX will not succeed, that is perfectly fine - you are just a few clicks away from making it happen. Sell your assets and buy a direct indexing product, simply buy the stocks you want, buy ex-US, or any other number of options you can do on your phone with a few clicks. Less clicks than it takes to virtue signal on this forum.
The TAM of that is under $10 billion. So even owning that entire market shouldn't get you anywhere near a trillion. Then factor in the development cost of starship which has been going on forever and still hasn't even made it to orbit.
Even the IPO filing isn't claiming the value comes from the rockets but from data centers in space which seems questionable. The real cash cow right now is Starlink but they aren't leaning into that heavily because those numbers also indicate that revenue growth might be stalling out.
If you just look at the pure numbers the case is very weak. No reason to change the inclusion rules. In fact I'd argue they never should change the inclusion rules. Let the market find a price first. Index funds are supposed to be boring and track the market. Including any recent IPO just adds chaos beyond simply tracking the overall market. It's trivial to buy some SpaceX if one wants and unlike selling your entire fund holding either doesn't trigger a taxable event at all or it's a much smaller one if you cannot avoid it.
Google when it ipo'd about 20 years ago had a market cap of $23B. It is now close to $5T. Even if it went over 10x overvalued at $230B when it ipo'd, it would still have been a good investment. That is because the internet became a large part of our economy, and Google is a major player.
If you really want to compare the two, Google had a market cap/revenue of $2B/$2.7B, SpaceX is currently $1.8T/$20B, or about 10x the ratio of Google back then.
Yeah, very pricey. Crazy ? Not sure. Do I like the valuation ? No. Would I buy more SpaceX than what will be in my equity ETF ? No. But I am not unhappy that I will own a piece when it comes out. Do I like the change in rules ? Absolutely not, but that is just the way it is. The market, over time, is, and always be a lot smarter than I am.
Many people have appreciated gains locked into their indexing products such that changing is very expensive.
The biggest issue is not SpaceX/Elon per se, but indexes bending over backwards for him and changing their indexing rules to fleece index investors.
Most IPOs perform badly, to the point where the SP500 excludes all of them for a year, and I think that is actually appropriate for an indexing product. Though they're looking to change that and their float weighting for Elon.
Though after doing some digging I am not personally meaningfully impacted since Vanguard uses CRSP, which is float weighted, so only 0.1% of that is going to be SpaceX and I can live with that.
I short the stock on the actual financials if I was exposed to it (and it was actually possible), but it's a small float and there are apparently tonnes of Elon fanboys propping up Tesla beyond belief already so I expect this to be one of the hardest to predict stocks/IPOs.
As far as the appreciated gains go, I agree with you. However, there is a strong correlation between someones wealth and how much they have in taxable. For most people, especially those that are not wealthy, their equity investments are heavily weighted to retirement accounts,so I look at this as more a rich persons proble.