Major W. Regular people were going to get robbed blind.

> Major W. Regular people were going to get robbed blind

Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.

S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.

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frikskit 3 hours ago | parent [-]

What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.

Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.

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JumpCrisscross 3 hours ago | parent | next [-]

> What was unlikely to happen?

S&P adopting the rule changes.

> It already happened in Nasdaq

NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.

> for most investors it already did happen

What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.

> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’

I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.

But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.

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frikskit 3 minutes ago | parent [-]

It’s not just Nasdaq-100 it’s Russell indices too, which are way bigger by the way (not that it matters).

Regarding misplaced corruption allegations. Virtually everywhere it is illegal to both give a bribe as to receive a bribe. It’s not just Musk et al who should be called out.

As for the unnamed sources doing the scaremongering, it seems you should be calling those specific people out instead of downplaying this whole issue. You’re dismissing the argument not on its merits but because “some people” argue for it badly.

	▲	JumpCrisscross a minute ago \| parent [-]
		> it seems you should be calling those specific people out. Instead you’re downplaying this whole issue because some people overreacted It's a couple YouTubers. No crime of the century. But from what I've heard from the RIA community, a not-inconsequential amount of fees are being generated in the Bay Area from folks rotating out of low-fee index funds into bespoke nonsense because they are scared about a 0.3% change they think happened that didn't ever occur.

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petesergeant 3 hours ago | parent | prev [-]

It was unlikely to happen anywhere but the Nasdaq-100, because only Nasdaq has the incentive to do it: https://news.ycombinator.com/item?id=48411713

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frikskit 7 minutes ago | parent | next [-]

But… it’s not just nasdaq it’s Russell indices too.

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JumpCrisscross an hour ago | parent | prev [-]

> because only Nasdaq has the incentive to do it

I'm not going to say Nasdaq didn't do this corruptly. But there are plenty of good reasons for the NASDAQ 100, an index marketed as being tech focussed, bending over to include AI issues that don't require nefarious explanations.

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petesergeant 42 minutes ago | parent [-]

Why do you think they originally had inclusion criteria, and have the reasons for having those criteria changed? Why do you think Musk has made it so clear that he’s strongly weighting that inclusion in his choices?

	▲	JumpCrisscross 16 minutes ago \| parent [-]
		> have the reasons for having those criteria changed? I think it was reasonable to ask if they had. If SpaceX were a one off, it would be one thing. It's not. We have a line of potentially trillion-dollar IPOs raising about as much money as the most valuable tech companies in the world, Alphabet and Meta. It's reasonable to ask if the definition of a large cap has changed. It's also reasonable to conclude that it hasn't, at least not in respect to minimum-float and profitability requirements. > Why do you think Musk has made it so clear that he’s strongly weighting that inclusion in his choices? Musk obviously cares, and almost certainly didn't restrain himself in pushing that care. That doesn't change that these questions and processes predate his engagement with them.