Matt Levine is on a SpaceX tear... last week like 2-3 of the newsletters were all just SpaceX -- valuation, total addressable market, Musk drama, potential mergers... yeah the whole shebang.

This week we back with... INDEX FUND INVESTMENTS?!This week we back with... INDEX FUND INVESTMENTS?!

The basic idea of index investing is that you are not smarter than the market, so you should just buy whatever stocks the market tells you are good. It is a discipline of self-effacement, but it is hard. “The market is stupid,” you will occasionally think, and then what?

Three Things Not to Like About SpaceX

...and index funds can (somehow?!) opt out of stocks-they-don't-like:

historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like. From about 2017 until 2023, some big index providers tried to exclude new companies with dual-class stock that gave their founders voting control, on the theory that that’s bad governance and index funds shouldn’t have to buy companies with bad governance.

Plus, I imagine, a decent number of ESG-related filtering.

SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.

...but, they'll be there, happily taking all that passive flow. (MSTR, anyone?!)

BONUS: Fantaaaastic story on carbon credits:BONUS: Fantaaaastic story on carbon credits:

Carbon credits just seem like a much, much, much easier subject of fraud than almost anything else. We talk about this problem from time to time. You’re selling people something that they can’t measure and don’t even really want.

Not input like jet fuels... it's just a certificate claiming something:

Unfortunately, you can't keep the benefit of buying fake jet fuel -.-

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