benl

You seem to have misunderstood my comment.

Yes. There are probably a dozen or more across the SP500 and Russel 2000 that will 10-100x in the next 5-10 years. The trick is to be able to identify them!

Those funds are not whole market funds.

But there are things to say about your point too. I’ve commented on that in other threads.

Well yes it will be hard, and hence maybe not economical, and that’s why many people are skeptical of the business case (myself included btw).

But satellite cooling already exists (Starlink v2 satellites dissipate heat at over a kilowatt I believe), so that’s why other people find it plausible.

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!

If whole market means whole market, then such investments are exposed to companies who are fairly valued, companies who are massively overvalued, and companies who are massively undervalued, and the whole range in between.

If you want to start picking and choosing which companies are overvalued and which are undervalued, don’t invest in whole market funds. But most people are not good at that!

SpaceX is valued at that revenue multiple because of its expected revenue growth rate.

This deal is part of that revenue growth. So the new revenue would be already partially or even fully priced-in.

Perhaps it reduces uncertainty around the growth rate, but expectations were already sky-high, as shown by the multiple!

Technically I think this would be fairly straightforward. You could keep the index fund and then short the stock you believe is overvalued, to the degree it's weighted in the index fund. That would give you stock market exposure equivalent to the index without the company you don't believe in.

But I would strongly advise you to NOT DO THIS.

The above position makes it explicit that your thesis involves shorting a stock that could go through the roof in value. That emphasizes what a risk you're taking with your thesis. If your typical investment approach is to just buy index funds, then carry on just buying index funds and let the market do its work.

By the way, if SpaceX, Anthropic, OpenAI etc were to be excluded from the indices, then professional investors would just start a trade the inverse of the one I outlined above - i.e. they'd start shorting your index fund to the extent it was underweight in those companies, in order to profit off the exclusion of those tickers from it.

If you're in this for the long term (which I assume you are given this is your 401k), don't try to second-guess the market short-term.

£10,000 per year for Mr Darcy is 10,000 gold sovereigns per year. A gold sovereign at spot price today is about $1,100. So that’s over 10 million dollars per year in gold-equivalent wealth. Plenty to maintain his estate with.

Alternatively, £10,000 is 200,000 sterling silver shillings per year (20 shillings per pound) for him. A sterling shilling today is about $13.50 at spot price. So that’s $2.7million per year in silver-equivalent wealth. Still plenty!

Yes, launch cost is the crux of the matter. My skepticism is based on whether they’ll be able to get launch cost low enough and launch cadence high enough. SpaceX has shown the ability to get launch costs dramatically lower and cadence dramatically higher, but it’s not a slam dunk that those curves will continue to the levels needed for this idea to work.

Data centers in space may or may not make sense (personally I'm quite skeptical) but the objections in the article certainly don't make sense.

1. The only reason there are 15,000 satellites in space is because SpaceX launched about 9,500 of them (Starlink is 65% of all satellites) on their semi-reusable Falcon 9. If fully-reusable Starship pans out, they will be launching satellites at 10x the rate of Falcon 9 at the very least.

2. You don't need to upgrade the satellites, you just launch new ones. The reason data center companies upgrade their servers is because they can't just build a new data center to hold the new chips. But satellites in space are a sunk cost, so just keep using the existing satellites while also launching new ones.

3. Falling solar panel costs decreases the power costs for both earth-based and space-based, but they're more efficient in space so the benefit would be proportionally greater there.

As I said, I'm skeptical too, but let's be skeptical for good reasons.

Your explanation of finding a surface to separate good reasoning traces from bad reasoning traces in a high dimensional space worked as a great framing of the problem. It seems though that the surface will be fractal - the distance between a good trace and a bad trace could be arbitrarily small. If so then the work required to find and compute better and better surfaces will grow arbitrarily large. I wonder if there is a rigorous way to determine if the surface is fractal or not.

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