TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

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AlohaJoe
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by AlohaJoe »

HanSolo wrote: Thu Apr 08, 2021 2:06 am You lost me. You said "Vanguard still owns 5% of Tesla", but eukonomos said that before the dilution, the index fund owned "10% of Tesla shares". What do you mean by "still"?
BeBH65 wrote: Thu Apr 08, 2021 2:13 am I understand that share issuance (and share buyback) are events that will make index funds take action to keep the status-quo related to their ownership in the company
You're both right. Whatever I was thinking at the time I wrote that clearly makes no sense.
dsasdg
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by dsasdg »

https://www.brookings.edu/research/the- ... nt-debate/
Syverson (2016), for example, finds four empirical challenges to the hypothesis that mismeasurement largely explains the U.S. productivity slowdown:

Productivity has slowed in many countries and the size of the productivity slowdown is unrelated to the countries’ consumption or production intensities of ICT goods and services that are often cited as the major source of mismeasurement.

Even if adjustment is made to the price deflators for ICT products to capture quality improvements and the introduction of new goods, such correction would explain only a small part of the estimated $2.7 trillion in missing output resulting from the post-2004 productivity slowdown in the U.S. (which caused measured GDP to fall by 15 percent from its counterfactual level by 2015 Q3). With the ICT industries collectively accounting for less than 8 percent of the total economy in 2004, the adjustment to the price deflators would have to be implausibly high to account for all of the missing output—as much as seven times the magnitude of the actual deflator. The implied true incremental real value added of the ICT industries would have been six times the measured change, and the true labor productivity in the industries would have risen 363 percent over 11 years.

Estimates of the consumer surplus associated with the use of free internet-linked services, although sizable, fall well short of the missing output from the productivity slowdown. Even the largest estimate (Goolsbee and Klenow 2006), calculated by imputing value to the time consumers spend using these services, accounts for less than one-third of the missing output.

While measured gross domestic income has on average exceeded gross domestic product since 2004, possibly indicating payments to workers for goods and services produced that are marketed free or at highly discounted prices, this trend began before the productivity slowdown and, moreover, reflects unusually high capital rather than labor income.

For the productivity decline since 2004 to be explained by mismeasurement, a finding that mismeasurement today is significant alone is not enough; mismeasurement must increase relative to the previous period. Byrne et al. (2016) find that mismeasurement of ICT equipment, because of the failure of prices to fully reflect quality change in new products, was substantial even prior to the productivity slowdown.[2]

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csmath
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by csmath »

One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
dsasdg
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by dsasdg »

csmath wrote: Sat Apr 10, 2021 12:39 am One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
You're treating PR as a "real success formula", like thinking Warren Buffett's success comes from his great ability to understand the value of individual companies.
csmath
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by csmath »

dsasdg wrote: Sat Apr 10, 2021 1:02 pm
csmath wrote: Sat Apr 10, 2021 12:39 am One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
You're treating PR as a "real success formula", like thinking Warren Buffett's success comes from his great ability to understand the value of individual companies.
Not sure what you mean. I'm not an Elon / Tesla fanboy at all. I just know people that have worked directly with a couple of his companies and from what they tell me, working with them is unlike working with any other companies they have ever seen. I'm talking about the R&D level; completely different approaches. There is no PR in this story from me.
csmath
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by csmath »

dsasdg wrote: Sat Apr 10, 2021 1:02 pm
csmath wrote: Sat Apr 10, 2021 12:39 am One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
You're treating PR as a "real success formula", like thinking Warren Buffett's success comes from his great ability to understand the value of individual companies.
Actually, I may have misinterpreted what you meant. Even still, it seems as though you thought I was implying that this would cause the mentioned companies to be more successful financially and a better investment. I was actually just implying that they have taken out some of the speed bumps that other companies have in terms of speed of innovation. I have no idea if it will result in Tesla being a good investment. Being first doesn't always equate to being the most profitable, but they certainly enjoy enough funding to try to be first.
nigel_ht
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by nigel_ht »

csmath wrote: Sat Apr 10, 2021 3:03 pm
dsasdg wrote: Sat Apr 10, 2021 1:02 pm
csmath wrote: Sat Apr 10, 2021 12:39 am One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
You're treating PR as a "real success formula", like thinking Warren Buffett's success comes from his great ability to understand the value of individual companies.
Actually, I may have misinterpreted what you meant. Even still, it seems as though you thought I was implying that this would cause the mentioned companies to be more successful financially and a better investment. I was actually just implying that they have taken out some of the speed bumps that other companies have in terms of speed of innovation. I have no idea if it will result in Tesla being a good investment. Being first doesn't always equate to being the most profitable, but they certainly enjoy enough funding to try to be first.
No, I don't think you misinterpreted. dsasdg doesn't like Musk so any positive opinion needs to be met with derision.

What you posted in in line with what I've heard as well. The ability to blow stuff up and figure it out afterwards is a huge competitive advantage for them vs ULA, et al.

Musk's PR success has also been critical to SpaceX's competitive advantage and ability to fund the next thing. As they say, no bucks, no Buck Rodgers.

It should be interesting to see how Blue changes as Bezos focuses on it. Not sure it's going to turn out like Westinghouse vs Edison though...
dsasdg
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by dsasdg »

nigel_ht wrote: Sun Apr 11, 2021 10:20 am
csmath wrote: Sat Apr 10, 2021 3:03 pm
dsasdg wrote: Sat Apr 10, 2021 1:02 pm
csmath wrote: Sat Apr 10, 2021 12:39 am One of the things that has allowed Elon's companies to progress so much is the enormous influx of funding coupled with the attitude and innovative relationships they have with their suppliers. I don't want to get into the details but his companies know that many of their suppliers are the best in the world at what they do and are willing to skip all sorts of traditional testing requirements for their suppliers just to get cutting edge tech and parts into their hands as soon as possible. SpaceX for example. It isn't unheard of for them to tell their suppliers "screw your testing, just make us the part and we'll blow it up for you and share the data so we can make cool stuff happen." Meanwhile other companies require their suppliers to spend tons of money and time testing new stuff. And if something goes wrong there is hell to pay.
You're treating PR as a "real success formula", like thinking Warren Buffett's success comes from his great ability to understand the value of individual companies.
Actually, I may have misinterpreted what you meant. Even still, it seems as though you thought I was implying that this would cause the mentioned companies to be more successful financially and a better investment. I was actually just implying that they have taken out some of the speed bumps that other companies have in terms of speed of innovation. I have no idea if it will result in Tesla being a good investment. Being first doesn't always equate to being the most profitable, but they certainly enjoy enough funding to try to be first.
No, I don't think you misinterpreted. dsasdg doesn't like Musk so any positive opinion needs to be met with derision.

What you posted in in line with what I've heard as well. The ability to blow stuff up and figure it out afterwards is a huge competitive advantage for them vs ULA, et al.

Musk's PR success has also been critical to SpaceX's competitive advantage and ability to fund the next thing. As they say, no bucks, no Buck Rodgers.

It should be interesting to see how Blue changes as Bezos focuses on it. Not sure it's going to turn out like Westinghouse vs Edison though...
Can you read that article above?
hnd
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Re: TSLA gamed the system - Could Index Funds Be ‘Worse Than Marxism’?

Post by hnd »

https://www.morningstar.com/articles/10 ... ndex-funds

I thought this was a good retort to the OG article.

My thought is that so many of these "active" funds are closet indexers anyway. its always interesting seeing guys harp on the "mediocre" returns of indexes while buying mutual funds with Rsquared's of 90-95%
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