In the short term the market is a popularity machine but in the long term it is a weighing machine.
This has not been the case for a long time.
What do you suppose is BTC's correct valuation? How about TSLA?
> This has not been the case for a long time.
I think this comes down to a disagreement about what "long term" means. In finance, I would suggest a _lower_ bound on long term is 10 years. More comfortably, I'd suggest something like 20-30 years. This is long enough to ride out most depressions, and it is still fits within a persons working life-time. It also roughly matches the scale at which people should be planning for retirement and long-term care (imagine if you started your retirement planning just 10 years from retirement, it would be very difficult). So I think neither BTC's not TSLA's hype has reached long-term yet. They have been around long enough to meet some of these timelines, but the excessive hype really hasn't been so long -- maybe 5 years or so.
If the market can’t actually detect crooks and charlatans until long after they have stolen investors money, its ability to be “correct” is worthless.
There are MAJOR rule changes made to allow them to do this (90 day wait-time reduced to 5 days, financial stability requirements lowered or removed), which is why automated rules like that were created ("oh, if they make it to X, they were already vetted for Y, Z").
A lot of people are throwing a lot of trust and reputation on the bonfire to make this happen.
OTOH, the changes may expose them to SpaceX before they could reasonably rebalance their holdings, even if they were to stop buying the affected indexes immediately.
Michael Burry says neither SpaceX nor Anthropic is worth $1T
What I object to is all the rule changes by NASDAQ to essentially fix the IPO so massive pension funds and index funds are forced to invest in it. There have been multiple submissions about this but in short small floats are normally prohibited for index inclusion (not anymore), the trading days required for price discovery have been dropped to almost zero, the voting share structure would be an issue, the insider lockouts have been fixed and on it goes.
There should be extra scrutiny for a trillion dollar company.
SpaceX does have the Falcon 9, which is the completely dominant launch platform and first-stage reusability gives it an almost unbeatable advantage. Starlink has a lot of potential if satellite handsets can get small and cheap enough to compete with 5G effectively. Obital data centers are bullshit. Starship is going to be a significant drain on finances and the program as a whole faces significant headwinds.
The big problem is xAI. It's a significant drain on SpaceX (costing allegedly $1B+/month). SpaceX would be a better company without it. But it's only there to rescue Elon from his disastrous Twitter purchase and the xAI investors from Elon's first bailout (of himself).
There's almost no point in trying to figure out what a valuation should be because in many cases, nobody cares. Tesla is the posterchild for that.
I looked into the how the rule-changing works. NASDAQ is what's called a Self-Regulating Organization ("SRO") in the legislation so it has a lot of power. Were it a government agency, it would be more difficult. Technically, the SEC has to approve all rule changes by SROs but in this administration in particular, that's just going to be a rubber stamp. By the way here's a speech the head of the SEC previously gave about deregulation of capital markets [1].
I was also curious if Loper Bright had changed anything here but it appears not. The sstatuory language here is clear rather than intentionally or unintentionally ambiguous.
So the funds can technically challenge any such rules. They have standing. But the bar is difficult and I don't see it happening.
But if this goes badly, what I think you'll see is changes in governance by pension funds that'll be reflected by Vanguard and Blackrock, which is "index-like" funds that have stricter governance with rules closer to what was the case before these rule changes were rammed through. I could be wrong. I hope I'm not.
[1]: https://corpgov.law.harvard.edu/2026/04/22/speech-by-chair-a...
I think we're still a ways away from CEOs admitting that AI actually can't cut the cost of human capital in half.
On the contrary, I think it certainly can. In the sense that productivity per person can be doubled. You could fire half your workforce and do nearly the same output.
Trouble is, everyone who does that will get outcompeted by everyone who didn't fore their workforce, and instead doubled their output.
We've seen it before with factories and computerization.
SpaceX is on a whole new level of bullshit. I think all these guys know how to do is double down. If the hype isn't working, its not stupid and big enough, so you start talking about transhumanism and singularity and other BS in your SEC filings.
Index funds track an index mechanically. If you run an S&P 500 fund, you have to mirror the S&P 500. If a company gets added to the index, every fund tracking the index must buy it to match the index -- there is no discretion. Pension funds hold a lot of index funds.
So the causal chain is that pension funds track indexes, indexes have to buy the companies in the index, SpaceX got a fast path to the indexes. SpaceX will launch and pension funds will buy the stock, presumably propping up the stock price.
It would take a lot for pension funds to undo this and would be the opposite of index investing.
Pensions have strong and weird investment rules, and you have no control over what they do other than law. This makes them generally a worse investment (but if you live longer than average they are great anyway) so a 401k is better for most.
The original “revenue thesis” was that SpaceX, with landing orbital rocket boosters, can undercut all competitors and essentially have a monopoly on payload-to-orbit, and that their lower prices would massive increase the market.
Seems a fine business.
But then a couple years ago they say “actually with this brand new technological edge we can spin up a monopoly on an entirely NEW industry, Space Internet” and within a short timeframe they’ve got billions in revenue off this entirely new service.
It’s hard to predict the future but if Starlink is the last “new space industry” that spacex has borderline-exclusive access to, I’ll be shocked.
The valuation is speculative, yes, but they have such an incredible cost advantage in a nascent space that id be hard pressed to bet against them.
It’s reminiscent of everyone claiming Uber could never succeed, citing the size of the existing taxi market. TAM can change radically when costs move down orders of magnitude, in ways that are hard to predict.
https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.")
https://www.aboutschwab.com/mss/story/how-investing-and-gamb... ("Investing and gambling can both be fun. But they are not the same.")
(none of this is investing advice, educational purposes only)
VOOG has returned 18.28%/yr over 10 years vs 15.63%/yr for VOO, a meaningful gap driven almost entirely by Mag 7 dominance. XMAG has no 10-year track record.
That’s the way indexes roll. I don’t invest in indexes for this reason.
There is a separate structural issue with indexes that is being ignored here. Indexes were never really designed to accommodate companies going public so late with high revenue growth. A couple decades ago companies went public when they were so small that they could grow into the index. This reflects changes in the nature and structure of the capital markets, these new IPOs are just a manifestation of this reality.
Not just forcing it into. Forcing the funds to fight for it betting the stock rice higher and higher in a runaway style - the effect created by limited float and high valuation as the funds tracking indexes would try to get the amount reflecting the proportion of the valuation of the company vs. the whole tracked index valuation, and with such huge valuation the limited float leads to the price rise (similar to the short squeeze) and the higher the price on the float the higher the valuation, rinse and repeat...
Unfortunately I have very little knowledge of the historical stock market and if this order of magnitude of bullshit valuation has ever occurred before.
When it comes to dealing with the abuse of power by those who hold power, the question is not "who's allowing them to do this?", it's "who's going to stop them?".
>> In space no one can hear you scam
I think the most likely scenario is that there eventually will be changes, but if not enough people squeal now, then it won't be until after a bunch of people lose their savings either because of this or some follow on scam that finds a way to take advantage of passive money.
artwr•1h ago
downrightmike•1h ago
gordonhart•1h ago
datsci_est_2015•46m ago
ianburrell•31m ago
People also don't talk about different orbits. We can use higher low earth orbits if lower orbits are blocked.
Also, it is possible to clean up debris. The low cost launch means lower cost cleanup. My understanding is that big objects are most dangerous cause they would cause a lot of debris.
bagels•43m ago