Larry McDonald Warns SpaceX, OpenAI IPOs Reveal Dark Side of Passive Investing and Index Manipulation
By
Christoph Gisiger (cg)
Slow-proofed and worth the wait. Worth its weight in flour.
Summary
Larry McDonald, founder of "The Bear Traps Report" and NYT best-selling author, warns that the rush of major private tech companies like SpaceX, OpenAI, and Anthropic to go public—and their accelerated inclusion into indices like the S&P 500—amounts to market manipulation. He argues this is a dark side of passive investing, where index funds are forced to buy these stocks regardless of valuation. McDonald prefers betting on commodities and traditional Old Economy companies instead of the AI-fueled tech rally.
Key quotes
· 3 pulledThese monster IPOs expose the dark side of passive investing.
Their accelerated inclusion into indices like the S&P 500 amounts to market manipulation.
I prefer to bet on commodities and traditional Old Economy companies.
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