Bonds are no longer recommended. Current research indicates 100% equities to be the best composition leading up to, and past, retirement.

To point, the economic uncertainties around geopolitics, AI, and war, plus irresponsible debt spending by governments and the prospect of QE (and higher inflation), is pushing long term rates steadily higher. There’s a reasonable chance that 30y treasuries are nearing 6% by the end of next year. Remember that rates and bond prices are inversely related. Anyone who holds bonds in this market will likely lose money. Holding to maturity won’t help much either because if inflation continues to rise, as is a major concern, most or all of that 5% yield gets eaten.

You absolutely need to get inflation adjusted bonds. Otherwise you’ll get wiped out. I am in the krugman, stiglitz monetary camp; so not prone to constant fear of hyperinflation but what the government is doing makes inflation certain and the only way out a fairly painful recession either of will be hard on equity and bonds.

The market of a good leader is a lack of chaos. We are seeing the effects of a chaotic mind untethered from an accurate view of reality. Buckle up

I'm technically not really in pure index funds, I just wanted to avoid trying to complicate my thoughts. Nearly all of my investments are in VFORX or Schwab's equivalent, and have been for a long time. So they are really composed of total market funds, bonds, etc, and Vanguard changes the ratio a bit as 2036 approaches. So while not really an index fund, from my perspective as a lay investor I treat it like that and consider myself an honorary Boglehead. I just put money in and forget about it.

As others have pointed out, bonds are barely (or not) keeping up with inflation. I would like to suggest a third alternative to stock index and bonds: stable dividend stocks. They should increase in value along with inflation but still pay out a steady dividend as long as the company is strong.

One of the lessons from 2008 is that even the contrary position gets obliterated when the whole damn system implodes.

So, the optimists all swim in the cash while your contrary position fails to keep pace with the bull market; and then the bear market hits and you all get obliterated equally.

This is absolutely terrible advice and is out of touch with modern financial understanding. Bonds feel psychologically safer, but lead to failure more often than total market equity portfolios, even when you account for market crashes.

https://youtu.be/p25PPBgMiEk

Bus Tesla isn’t in anything looking like a growth phase

What is a "hedged equity fund"? Can you provide an example?

Robotaxi failed so now it's Optimus bots.

The truly terrifying thing is that someone could short the Musk companies, and with one bullet can cause them to drop 50-90% right away (thanks to meme-ness). And they are valued so high that such a person could make billions overnight, maybe 10s of billions. Terrifying to be Must or anyone that shares a car or plane with him.

What about swapping the SP500 for VT (total world equities)?

> their core internet service seems really solid

If you ignore data caps the core service itself does seem to be much better these days than it was 10 let alone 25 years ago. But then again my sample set consists exclusively of locations where they have one or two FttH offerings as competition so it's not as though they could have remained in such markets without upgrading.

Somewhat tangentially I find it surprising how fast MoCA is when you consider the cables it runs on top of.

Comcast is not a rapidly growing company, though.

This isn’t hypothetical. SpaceX is increasing Starlink revenue by like 50% per year. And their current Starlink constellation, about 10,000 satellites, has been launched entirely by Falcon 9. They’ve been waiting to launch much larger satellites on starship (in fact they had versions of these ready for several years now, and recently did suborbital tests of some of them on recent starship flights). Starship is about 5-10 times the capacity of Falcon 9, is fully reusable, & has larger diameter allowing much larger satellites. They asked for approval for roughly 40,000 of these larger satellites (~3 times the size of current ones, each about 10 times the bandwidth… and half of the 10,000 are even older designs), and they may eventually do about 100,000 of them & further increase the size and reduce latency (by operating at lower altitude). It’s not an exaggeration to say SpaceX intends to increase bandwidth by at least 100x, maybe a lot more. They intend to use a lot of this extra capacity to expand into mobile coverage as well. They are leveraging their platform for incredibly important national defense capabilities as well, and they operate as their own backhaul using on-board laser links. They can service anywhere in the world that will let them, including lucrative sectors like aviation. I do think it makes sense to value SpaceX as a rapidly growing business, not as a dividend-giving, plateaued ISP like Comcast.

This is all before even mentioning the idea of orbital datacenters.

They won't, SpaceX will weigh less then 1% in most indexes, since they're mostly float adjusted, only NASDAQ will overweight them, but FTSE/MSCI/CRSP/SP will not.

It's still quite some money but it won't crush the market by itself.

Well, the value of the stock for people who essentially do not have any meaningful control of the business must essentially be tied to the expectation of some liquidity event down the line -- future cash flows. So this could come in the form of dividends, sale of the stock, bankruptcy proceedings, or a purchase of the business.

If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?

Among the oldest value models, the Dividend Discount Model, says that the value of a company's stock is based on the present value of its future dividend payments.

Even if a company doesn't currently pay dividends, it will eventually do so or be purchased by a company that does. That's the theory at least.

> The value of the stock is your share in the underlying business.

Which for most investors with Class C/D shares is... the square root of zero.

They assert no control over the business, the only way to benefit from the stock is to find another shmuck to buy it at a higher price.

This makes no sense. Why doesn’t the “underlying value” of tulips change?

“Underlying value” is a meaningless word btw

That’s the story, but it’s bullshit. The underlying intrinsic value of a stock can only be materialized if the company liquidates and you receive a share of the sell off of its assets. How many publicly traded companies abruptly decide they’re tired of the business, stop in their tracks, and liquidate their assets? This only really happens if the company is acquired or if it goes bankrupt. Acquisition is the closest the story comes to truth, but it’s also just forced sale to a greater shmuck. If a company goes bankrupt, a tiny fraction of the current stock price would be realized into cash for common investors because of all the privileged investors and lenders ahead of them, not to mention that the actual value of capital assets etc probably doesn’t cover all the losses (the company’s going bankrupt after all). The value of the underlying capital assets are essentially never returned to the common investors, and the idea that you own a portion of them is in practical terms a lie.

There are lots of US companies that pay dividends. Another commentor lists some tech companies that do, and there are lots of other types of businesses that do. A quick internet search will give you a list.

You are correct that stock buybacks are another way that companies reward their shareholders.

I think your point still stands, but a correction that 1% of $6-7T is $60-70B, not $600-700B.

Not doing much to beat the accusations of circular dealing are they?

> This deal increases SpaceX's revenue by 30%, and pushes SpaceX into profitability. With this deal, SpaceX is eligible for S&P inclusion.

You keep saying this even though you don’t present any evidence that it will make SpaceX profitable. Where are your numbers?

>I would bet that there is a nice clause in that contract that gives exit options to Google

from the linked article

>After this year, the agreement can be terminated by either party provided they give 90 days’ notice.

That's what I'm saying though. They must be getting something out of this deal, otherwise why would they be going through with it?

The explanation that this is just financial engineering (which to me, means neither Google nor SpaceX is getting anything out of this other than looking better on paper) doesn't make sense to me. How does this financial engineering benefit Google?

Even if they have an exit option, why is Google (a private, separate, self-interested firm) giving a single dollar to SpaceX if the deal isn't mutually beneficial?

So you think Google is going to spend $11B in hopes it will boost the value of the SpaceX stock, while pretending to public investors it's a multi-year thing, and then after 1yr sell off their SpaceX stock after the value rises while also ending the contract early?

This site is turning into conspiracy central

The question on my mind is-is this IPO designed to rip off recreational passive investors and those of us that invest in retirement accounts?

> Sidenote: 3 is actually high.

Do you mean low? AAPL has a ps of 10.

Number like this might appear when a company is expected to create a revolutionary thing that upends multiple markets. I would consider a number much larger than 3 in SpaceX’s case, but 94 feels, indeed, excessive.

It’s almost like the future we were promised in the 1960’s would immediately materialise the moment launch costs drop. Starship will be revolutionary if it pans out the way we expect (as the shuttle would have been, had it kept the low cost promise), but that’s not enough to warrant that 94 number.

According to their IPO S-1 draft they are 93% an AI company and 4% a space company. Its the remaining 3% of the company that is profitable, the Starlink stuff.

Given the amount of compute rented I doubt there’s anything meaningful left for the people there to do any AI.

The profit center, to the extent any division makes money, is Starlink, yes, but what we have always known as SpaceX is just a tiny side project in the combined company.

Maybe they'll become an AI company again after they've abused their privileged access as hardware providers to reverse-engineer Google and Anthropic's weights and operations.

I’m pretty sure he’s just trying to become the world’s first trillionaire at this point, these deals are obviously gimmicks to boost the SpaceX share price and his less-than-critical-thinking fanbase will happily oblige.

> Right out of the gate nearly all retail investment platforms have dramatically reduced requirements for purchasing an IPO, most notably Fidelity, which previously required $500,000 in your account to participate in an IPO reduced (on Friday) this amount to $2,000

Not at all surprising that the US in 2026 has degenerated to the point of turning the equity market itself into a bucket shop.

Strangely, these limitations don't seem to have been present on the European platforms. (Although I've never bought shares in an IPO myself, so I'm not certain about this.)

e.g. with https://www.nordnet.dk/kampagner/ipo/spacex for Denmark.

The minimum is 1 share (~$135), the FAQ on "when can I sell" says "Once trading begins in SpaceX, you can sell your shares at the current market price, which can be both higher and lower than the IPO price."

I am comparing SpaceX’s datacenter-and-GPU leasing business to aircraft leasing.

It’s possible, and common, for one large company to have multiple business lines, each worthy of a very different P/E multiplier. In principle you end up with a weighted average of some sort.

edit: Matt Levine has some great articles about this phenomenon and how some companies try to juice it.

I would short xAI but the market can remain irrational longer than I can remain solvent. Plus all the foolishness to prop it up with other businesses just seems like bad accounting.

He can’t do with rockets what he says SpaceX has to do to meet its goals, and he isn’t raising enough money to get the job done either.

It’s another misdirection.

I don't think you can short it before the IPO happens. Well, unless you've got a few millions and go to a bank and have them make a product for you specifically. But for normal people, for now, not happening.

'generational company'? Are you on drugs or so?

All of Musks business stuff highly depends on first mover advantage.

If people now selling it as a 'generational company' than it becomes even more stupid.

He didn't invent an unkown solution he is hiding to transform something into gold, he only put a lot of money into rockets.

And the rockets right now don't even have enough payload to have unlimited potential. If Space-X knows how to build a rocket very efficient, 10 years later other companies can do that too.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

But they did need to shore up that p/e ratio. Got to assuage our inner Ben Graham.

EC2 may have higher margins than that.

But your point stands, ain't no way xAI competing in that game.

The bet is that demand for AI tokens will continue to grow exponentially. And that SpaceX will be able to deploy and rent out GPUs to serve those tokens faster than anyone else.

The wrinkle is that they are planning to deploy those GPUs in space. That’s what people are most skeptical about, I think!

Google and friends continue to see increased demand for their wares. The bet is probably that SpaceX is one of the best-placed companies to deliver incremental compute. They've shown they can build data centers fast.

It's an opportunity to pay off early investors who are unhappy with him cratering Twitter, xAI, etc.

No, the point is to implement laws that foster holistic growth, not gamesmanship that ends in terminal illness.

>> I wouldn't call it brilliant. It's like cancer cells celebrating how fast they're growing.

> Isn’t that the entire point of a capitalist economy?

> What is the alternative?

If the point is to be cancer, then the alternative is to kill it.

Things are getting so out of hand, this former-libertarian is getting to the point were he'd support any market regulation that makes libertarians cry.

SpaceX cannot report Google’s investment as revenue on its balance sheet. Full stop. Equity investments are reported as shareholder equity. If you don’t believe me, read FASB ASC 605-606, ask your friendly neighborhood CPA—or, perhaps so you’ll earn a valuable lesson about confidently spreading bullshit about subjects in which you are clearly uneducated (or, at best, superficially educated), try it yourself in a public company and go to jail.

You don’t know what you’re talking about and are way out of your lane. Stop now. In fact, you should retract your parent comment and apologize to the community for leading them astray.

Did you even try to ask even ChatGPT or Claude about this first?

It's not that complicated, and the 'datacentres in space' is a myth.

They have rapidly depreciating assets in GPUs and they can't use them.

Because Grok is failing.

They are licensing out their unused capacity.

XAi is not strongly related to Space X - they were folded into one thing because XAi was losing money and failing (the Social Media part is worse).

XAi isn't really some kind of strategic advantage for Space X and even though revenues from the data centres may be positive - it's a 'stop gap' - it's probabaly not a 'net positive' thing to do.

The best thing for Space X would have been to never merge wht XAI.

The second best thing for Space X would have been to close XAi/Twitter lines of business a long time ago.

The 'Wrench in the Logic' is that by putting these things together, EM is able to dupe so many people into so many ridiculous concepts.

Data centres in space, 1M people on Mars, all sorts of crazy things.

It's a bit like Putin's and Steve Bannon's Media Strategy: 'Flood the Zone' with nonsense, and people speculate as to all kinds of things.

The Space X IPO is a 'retail push' meaning he needs to get all the Dentists in America and their Private Bankers to want to 'Hold the Bag' and then keep holding it for a long time.

Space X - at it's core - is a decent company, wrapped in layers and layers of hyperbolic nonsense.

All it takes is a bit of rational thinking to wade through what is plausible, and what is not, and we can see how overvalued this is.

Note: this is different than the other 2 AI IPOs which have some sketchy economics - but the premise is not far fetched, 'that people will want AI in large quantities'.

True. The amount of free float increasing dramatically will probably also depress the share price.

Anthropic is buying a lott of inference from SpaceX. Where else could they have turned?

I don't think so, considering a substantial proportion of their comments on this site seems to be fanboying for SpaceX in particular and anything AI in general.

the problem:

The Nasdaq 100 and FTSE Russell made a rule change that allows SpaceX to enter index without mormal time for price discovery. Most index funds have rebalance day just 5 days after IPO. S&P also made rule change for S&P Total Market Index and Dow Jones US Total Stock Market Index, but left SP500 intact.

Nothing wrong with SpaceX or Anthropic getting into indexes with fair rules, this rule change is pure creed+corruption.

Are there really 10-100x undervalued companies listed on indexes that haven’t been noticed?

I don't understand this logic. Does whole market mean scamming companies too?

Laying the blame for the transparent financial manipulation we are observing at the feet of regular people (who are putting their savings into their pension funds, a system that we incentivize because of its pro social outcomes) and saying they should just opt out because they should know better, is at best callous, most people should not have to think about that issue at all.

Also, there’s a long history of companies that people yell about being overvalued being the drivers of index returns, because one of the major drivers is growth rate, whereas retail investors tend to look mostly at current state.

A company can have poor fundamentals compared to its stock price, and also have an enormous P/E multiple if it has committed investors. We've seen this with multiple meme stocks and Tesla. I have no doubt SpaceX will fly high for a while and people will make a lot of money, but I don't think the company is going to make $320bn/year in AI services (with 74% profit) by 2030 as the S-1 suggests. At some point the market price will coincide with real earnings.

Trillionaire

> SpaceX could rise to be a major winner that makes people a lot of money

Based on "sane"/traditional metrics that and much more is already priced in into the IPO valuation.

e.g. Google had a many times lower P/S ratio at their IPO and was actually profitable (and software companies usually have higher valuations than capital intensive ones like SpaceX anyway). SpaceX is already valued at more than Google was 10 years after its IPO while barely making a tiny fraction of its revenue.

Alternatively you may want to be a passive investor using the current rules for index inclusion, rather than having them altered to favor this loss-making trashcan on fire.

Or you could mitigate the next dot-com style crash (which wiped out nearly 80% of the NASDAQ composite).

Back then, it was "day trading" that was one of the warning signs that a bubble was ensuing. There are certainly shades of the day-trading phenomenon in the "r/wallstreetbets" gambling, and wildly overvalued meme stocks like Tesla. And this mad rush to relax the guardrails for what appears to be wildly overvalued IPOs.

Bubbles, and their inevitable collapse, are generally not as big of a problem for younger passive investors, but they can be for older ones. (Hence why I've got a "bond tent", value tilt, and other diversification. I'm at the stage where "underperforming the market" is less of a concern than "mitigation". :) )

OK, but SpaceX is not printing money out of thin air. And neither does the stock market. Somebody will be left holding the bag eventually.

Heres the way I understand it as a child could understand.

You are google. I am your friend who wants to sell lemonade.

You have invested in my stand and own a piece. You propose a deal, You'll buy $11 of lemonade from me every week.

Does my stand look like it sells way more lemonade, than it would in reality? And since you own a piece, your own piece has appreciated. You ran the numbers and that spending of yours helps appreciate it considerably more (feel free to plugin the actual spaces-google numbers here and change the analogy).

Are the people who invest in my business after you, on its new valuation, aware that you are the one buying most my lemonade? And are you going to keep buying or will stop buying soon (probably as soon as you can unload your investment on strangers). So the fraud and lie as you said, is the behavior is not as real as it looks.

Am I thinking this through wrong, what do you think?

Edit: my definition of fraud is simpler and different from yours. a "lie" need not be there. fraud is any intentional misrepresentation (i.e. misrepresenting income to the public).