Key insights
- The author expresses concern about the potential for SpaceX's IPO to be structured in a way that includes less desirable assets, diluting its value. They question the safety of index funds if they include companies with high P/E ratios or are influenced by Elon Musk's actions, suggesting a potential need for index funds that exclude companies based on valuation metrics. This could lead to a slight negative sentiment towards high-growth stocks.
With the SpaceX IPO coming up - initially I was excited about it.
Then, it was for SpaceX + xAI + Twitter - all of which are not value add, but value subtract from SpaceX.
Now, will there be funds which are technically index based, but don't invest in certain companies?
For example, Fortune 500 fund, but doesn't invest in companies with P/E ratios over 50/100? (Tesla, Crowdstrike, Palantir, Service now, Intuitive Surgical?)
Based on news that Musk is trying to get the listed entity into indexes to attract massive demand from index based funds, I'm no longer confident, that index based funds will be safe from ElonScams.
I am not aware of index based funds which exclude companies on basis of P/E ratio, or specific companies.