Milton Friedman: “Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax.”
“If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or borrowing.”
Imagine you spent 40 years doing the boring, responsible thing.
You opened a 401k at 23. You contributed every paycheck. You ignored the noise. You bought the index because Bogle told you to, because Buffett told you to, because every honest piece of financial advice for 30 years told you the index was the safest, most diversified, most rules-based way to own America.
The whole point was the rules.
The rules said: a company must trade for 12 months before joining the S&P 500. The rules said: it must show four consecutive quarters of GAAP profitability. The rules existed because in 1999 the index quietly bought a lot of stocks at the top, and pensioners paid the bill.
After the dot-com crash, S&P tightened the rules. Nasdaq tightened the rules. FTSE Russell tightened the rules.
For 23 years, those rules held.
Then SpaceX filed for IPO.
And the rules changed.
The S&P 500 waived the profitability requirement. Nasdaq cut its trading-history window from 90 days to 15. FTSE Russell cut its to 5.
Bloomberg Intelligence estimates the major index funds will absorb between 19% and 24% of SpaceX's float within six months. That's over $30 trillion of passive 401k and retirement money, mechanically buying a single newly public company at IPO valuations, because the rules said they had to.
Except the rules used to say they didn't.
Here's the thought exercise:
If you spend 40 years building a system designed to protect ordinary savers from buying overpriced stocks, and then you waive the protections the moment a sufficiently large stock asks you to, what was the system actually protecting?
Most of investing is about understanding what's a rule and what's a guideline.
A rule binds the rule-maker.
A guideline binds the saver.
You're allowed to find out which is which only after the fact.
Servono anni per costruire e bastano attimi per distruggere. Fare il ribelle è molto più facile che produrre, cioè organizzare la soddisfazione di bisogni altrui. Il problema del capitalismo c'era anche prima è nei passaggi del potere dai padri ai figli senza ascensore sociale.
@RaffaelloLupi L'esistenza della meritocrazia su base genetica è un grande tema riguardo la responsabilità imprenditoriale verso tutti gli stakeholders delle aziende. Grazie, Prof, per aver posto l'accento
@mynameisnemo12@vishtash@ScafAnna Ammazza che identità di vedute che hai con lo Stato. Tutti quelli che amano lo Stato sono convinti che faccia esattamente come vogliono loro. Eppure loro sono tanti e lo Stato le cose le fa in una sola maniera