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Judging by all the buzz on social media—and the emails from the youngsters in my family—the SpaceX IPO appears to be the first investment in history with no downside.
The case seems straightforward:
Like flag pins and patriotic hats, accepting SpaceX’s invitation to participate in the IPO appears to be an American civic duty. Possibly world peace.
I’m just delighted a generation of investors will have the opportunity to learn valuable lessons about margin of safety, the madness of crowds, and loss aversion —assuming, of course, that those concepts haven’t been rendered obsolete by rockets.
I am actually going to buy but not until the first financials come out after the IPO. I expect their stock price will be down quite a bit after 3-6 months once the hype is over.
Figure I’ll put in apx 2% of my investable assets, so just enough to dream without sacrificing too much. Put it in my Roth account and it will sit there the next 20-30 years and if it does real well my boys will be happy!
Multi-billion dollar losses are a downside for me. To believe in the valuation, you have to believe in Musk’s path to profitability.
This sort of stuff is why we will always stick with index funds. Getting tied up in all the hype around the SpaceX IPO would just hurt my brain.
Overvalued … 6 months from now it will be lower than the IPO
I can think of one downside: Musk.
Please explain.
Precisely. Why let boring, industrial-age concepts like ‘revenue models’ or ‘margin of safety’ ruin a perfectly good hype train? It’s truly heartwarming to see a new generation get their own version of the late ’90s dot-com era, dreaming of valuations that defy the laws of physics.
Back then, they called it ‘The New Paradigm’ to explain why profits didn’t matter anymore. Today, we have ‘AI somehow’ and Mars. Anyone bringing up historical market cycles just needs to chill out dude: or as they say now, touch grass, it’s all sweet.
Clearly, this time it’s totally different, because this time, the spreadsheet has AI powered rockets on it.
I am very excited about this, but told Spouse I am not sure we could afford Space X. It is something totally new to invest in. I wish Mr Musk would have a program where we could buy a share for each of our grandkids and they would send the physical stock certificate to frame. Chris