alt Hacker NewsThe concern is that “bad apples” get into indices and then that starts to rot people’s futures. I’m not sure how that will play out (indices can kick them out, or if the company really fails the market cap will reflect that and the index can “heal”). I’m guessing Enron was part of the index at some point, but we survived that.
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infecto • today at 2:32 AM
People keep saying “bad apples into indices” but I have yet to truly understand what folks mean. Most of the mainstay indices would not include a fresh on the block new comer and it would generally need to follow other criteria. Yes SpaceX got added to the Nasdaq 100 but that is the whole purpose of that index. People should not be investing their savings in that.
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Well as we already saw with SpaceX, indices are separate entities that are not fully controlled by the SEC. There are plenty of companies on the market that aren't in indices anyway, you don't need to block a company from the market to block it from the index.