| ▲ | epistasis an hour ago |
| I'm usually a Boglehead, with some exceptions, and one exception I'd love is some sort of trade that would eliminate my exposure to SpaceX for the next few years. I'm sure there's some combo of options that would do it. Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different... |
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| ▲ | bryanlarsen 4 minutes ago | parent | next [-] |
| There's an ETF for everything out there. (There are more ETF's than stocks). There'll be a large market for "S&P500 without SpaceX" et al, so it's seems likely somebody will fill it. It probably will have to use a worse name because of the S&P trademark. |
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| ▲ | Galanwe 38 minutes ago | parent | prev | next [-] |
| > I'd love is some sort of trade that would eliminate my exposure to SpaceX You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small. |
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| ▲ | BJones12 29 minutes ago | parent | next [-] | | Yeah. For comparison, SpaceX will be maybe half the size of MSFT. MSFT is 7.4% of the SP500 index, so for a $1,000,000 portfolio if you were to short MSFT you'd pay 0.25% on the value of that 7.4%, or $185/year. So eliminating SpaceX exposure will cost you $100 per million of your SP500 ETF per year, or so. | |
| ▲ | parliament32 33 minutes ago | parent | prev [-] | | Shorts have unlimited risk. Buying a put is risk-defined and probably a better strategy. | | |
| ▲ | BJones12 28 minutes ago | parent | next [-] | | No, because the unlimited risk of shorting is balanced (hedged) by the unlimited upside of holding the same number of shares via the ETF. | | |
| ▲ | parliament32 5 minutes ago | parent | next [-] | | Yeah you're not wrong. I didn't think about it that way because you can't really break something out of an ETF basket, and you also don't control the ETF basket, but if you think those risks are minimal it's probably fine to just compare dollars-to-dollars. Personally I would still probably go with the long put strategy unless the price difference is exorbitant. | |
| ▲ | jocaal 22 minutes ago | parent | prev [-] | | You cannot however sell only SpaceX shares from your ETF to cover your short's losses. So due to liquidity issues I wouldn't recommend your strategy. | | |
| ▲ | Galanwe 16 minutes ago | parent [-] | | What are you talking about? You don't need to touch anything about your ETF. You just have to short a single name on the side. Also there is no liquidity issue, we're talking SP500 names here, you'll pay GC, which should be around 25bps as the other comment mentions. |
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| ▲ | Galanwe 18 minutes ago | parent | prev [-] | | It's not just a short, it's a portfolio of X short + X long. It's effectively canceling perfectly. |
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| ▲ | parliament32 34 minutes ago | parent | prev | next [-] |
| > some sort of trade that would eliminate my exposure to SpaceX I think it's less complicated than you'd think.. just buy LEAPS puts proportional to your exposure. |
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| ▲ | jakub_g 36 minutes ago | parent | prev | next [-] |
| One annoying thing is that those "non-standard" ETF variants have much higher management costs than basic S&P500 / All World ETFs. |
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| ▲ | xenospn 43 minutes ago | parent | prev [-] |
| Stock markets are ruled by hype and fomo. Good corporate governance has little to do with returns, unfortunately. |
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| ▲ | epistasis 41 minutes ago | parent [-] | | Short term gains are hype and fomo, but if you're holding index funds long like I am, then returns have a lot more to do with performance. And given the lack of hype around ESG, it seems like an exceptional time to buy in to it. | | |
| ▲ | wolvoleo 4 minutes ago | parent | next [-] | | That's also the kind of thing that pension funds should be investing in. They shouldn't invest in hypes as they're by definition in for the long haul and eventually hypes always blow. Sure you can make a lot of money but only if you know when to get out before the crash. And that's something that doesn't gel well with long term investment. | |
| ▲ | JumpinJack_Cash 36 minutes ago | parent | prev [-] | | Bro the index is about riding the hype and fomo and when the phenomenon progressively loses track it gets less and less quota | | |
| ▲ | epistasis 23 minutes ago | parent [-] | | I don't understand the lingo in your comment but my best possible guess is that I disagree vehemently with it. Long term dollar cost averaging is not about hype and fomo. Overall pricing in equities does vary according to alternative investment routes, which is why I'm diversified into those as well. Stonks go up. Stonks go down. Averaging over decades, ownership is about owning a share of productive output of a large portion of our entire economy, an amazing restructuring of social relations that presents an amazing opportunity for the common person, unseen throughout the history of humanity. |
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