[worik]

I said and I mean "huge", as in "very big"

Passive index investing was once the best strategy, perhaps is still. But in the face of such apparent malfeasance perhaps no longer

The big pension funds do have governors, they are mostly diligent and can change course

that will mitigate but not eliminate the downsides to this nonsense

[l23k4]

> But in the face of such apparent malfeasance perhaps no longer

Do you have any sources to share in support of this claim of malfeasance?

[worik]

> Do you have any sources to share in support of this claim of malfeasance?

Not here, this is a casual discussion not a scientific seminar.

But use Occam's Razor and modern history

Point 1. Corruption has penetrated the highest echelons of USAnian politics. The president is unabashed in his corruption and has corrupted (is corrupting) the financial regulators (I follow Molly White who has been particularly good on this)

Point 2. Space-X is valuing itself at an astonishing value that is not anchored in its business activities. This has been covered a lot in comments here but also see Patrick Boyle's excellent commentary.

Point 3. The purveyors of these IPOs have been doing their best to get the rules changed (because reasons blah blah blah), the change will mean that managed funds, if they follow their usual practice, will feel compelled to buy in at the offer price - a massive inflow of capital that will make many people incredibly rich.

Putting all this together - a culture of corruption that has reached the pinnacles of the financial system, outrageous valuations and open conspiring to change the rules in favour of the whole scheme leads me to the conclusion that I am looking at the biggest (what is effectively the) fraud in history

I hedge my comments "effectively the" as I cannot be sure that this is conscious theft, or whether it is a confluence of powerful people facing juicy incentives who going with the flow are heading to a massive wealth transfer from working people (via pension funds) to elite capitalists

I do not think that this is not apparent to the governors of these huge pension funds. Those that have not tied themselves to an index following strategy will opt out I am sure - they are smart, studious and dutiful people by and large. So the people perpetuating this fraud may well be unable to pull it off.

But these are very worrying times. Especially for the USA.

[l23k4]

>Point 1. Corruption has penetrated the highest echelons of USAnian politics. The president is unabashed in his corruption and has corrupted (is corrupting) the financial regulators (I follow Molly White who has been particularly good on this)

Sure, but indices are really not a heavily regulated space. The government doesn't have any obvious, direct influence here.

But uh, do you genuinely believe that the Trump admin would pull this off without the story leaking? It's an incredibly leaky administration, now supposed to be exerting influence over the most leaky industry in the world.

>Point 2. Space-X is valuing itself at an astonishing value that is not anchored in its business activities

If SpaceX is overvaluing itself, they'll look really silly at IPO! This is a very strange complaint.

>Point 3. The purveyors of these IPOs have been doing their best to get the rules changed (because reasons blah blah blah), the change will mean that managed funds, if they follow their usual practice, will feel compelled to buy in at the offer price - a massive inflow of capital that will make many people incredibly rich.

According to whom? The consensus in serious financial medias seems to be that indices are doing the rule changes to avoid divergence. I've tried to look, but I can't find any reporting suggesting that the "purveyors of these IPOs" had anything to do with this.

These companies are already among the 20 biggest in the US, it's genuinely going to be a big problem for e.g. the S&P500 to keep them out.

>But these are very worrying times. Especially for the USA.

I agree! However, not everything that happens in the USA is related to Trump.