00:00SpaceX is now a publicly traded company, but you're not going to find it in the S&P 500,
00:05and I think that's a good thing. So the reason that SpaceX is not in the S&P is mainly
00:09for two
00:10reasons. One is it hasn't traded for a year. Companies generally have to trade for a year
00:15before they're considered for admission. And the other thing is it doesn't make any money.
00:19In order to be considered, companies have to show profits for the last quarter and the previous
00:23year. These two things may seem trivial, but they're actually really important because in
00:27general, newly listed stocks tend to perform worse than companies that have traded for
00:32a while. And you can see that if you look at indexes that track newly listed stocks, they
00:37generally perform worse than the S&P 500. Also, highly profitable companies make more than
00:43low profitability or no profitability companies. And so by excluding those two kinds of companies
00:49from the S&P 500, the S&P 500 actually betters its performance. Could they make an exception
00:55for SpaceX? Sure. But they can't do it without abandoning this approach altogether because
01:00obviously Anthropic and OpenAI are going to want the same accommodation and every other
01:04tech company that comes after them. And so they either have to exclude SpaceX or they have
01:08to give up on their approach, which would be a terrible idea. In the end, S&P 500 is going
01:13to be very happy that they didn't abandon their playbook.
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