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prasadjoglekar

The index fund itself is mostly Tesla, FB, Google etc..at this point. 35% +/- in my quick check

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I assume you mean an S&P500 tied index fund?

I asked "a friend":

• Meta (META) ~3.1 %

• Alphabet (GOOGL + GOOG) ~3.8 %

• Tesla (TSLA) ~1.6 %

So just under 9%. Significant, I suppose, for just 3 of 500 stocks.

EDIT: since "etc." was mentioned, I thought I'd toss in some of the other top stocks in the S&P500:

• Apple Inc. (AAPL) ~6.7 %

• Microsoft Corp. (MSFT). ~6.6 %

• NVIDIA Corp. (NVDA) ~6.0 %

Amazon.com Inc. (AMZN) ~3.8 %

Another 20% or so. So the above seven stocks comprise about 30% of the S&P500 (Apple, Microsoft and NVIDIA are the "Big 3" at about 20% when combined).

Assume a market weighted index fund, not an equal weighted index fund.

Sure, the above was for Vanguard (VOO or VFIAX).

On a P/E basis neither Meta nor Alphabet seem overvalued.

Not when compared to the likes of Tesla and Palantir. But once upon a time a P/E of 35 was insane. For meta I still feel like its too much. Apple.. Well less so.

The question is do you think you can get 35 years of this level of earnings out of a company. If yes or more then it makes sense. But a whole hell of a lot can happen in 35 years.

Does P/E ratio (example you gave: 35) actually equate to years of profitability (also example you gave: 35 years)?

It means you’d need 35 years of earnings to equal the price paid today.

So, yeah it’s sort of like using that logic. Not exact as a dollar 35 years from now isn’t now, but you get the gist.

Thanks!

Meta makes 95%+ of its revenue on their ads. Whats crazy is that they own the platforms that most of their ads run on. Instagram, Facebook, WhatsApp, etc. How do we know they're not fudging the stats on the ads? They're already known not to be trusted. How has a third party Ad Verification system not popped up by now. Not for just Meta but for all Ad networks.

Game out your theory that they are overstating stats. It wouldn't matter if they were. Individual advertisers are getting enough value in downstream effects (actual sales) that they are paying what they are paying.

Presumably the revenue is something that ends up in a bank account. So an audit would make sure that number is accurate.

But I agree with the general problem of auditing advertising and performance. I've tried advertising on FB and my metrics never showed half of the engagement that they claimed.

The advertisers can see the traffic coming in from clicks, I would think. There would remain some opportunity for fraud by FB if some of the ad money is just for impressions but it seems like it would be difficult to keep click rate up while shorting the buyer on impressions.

I think problem with both is that they get money from advertising. Once companies really have to start tightening belt that might largely go away...

> I assume you mean an S&P500 tied index fund?

I would assume VT and/or BNDW. Most sane index fund fans aren’t all in on s&p 500.

It's crazy to me that these companies are essentially holding up the stock market, but are hemorrhaging money on buying GPUs. The magnificent 7 have spent $560 billion of capital expenditures between 2024 and 2025 leading to $35 billion of revenue, and zero profit. It feels like a complete house of cards to me. No one has made any profit on AI.

High capital expenditure like this is viewed favorably. Investors are investing in AI, and high cap-ex is a strong signal that the companies are going after AI i.e. doing what investors want them to do.

Very interesting, thank you. I'm not in business so I don't have a good understanding of these expectations.

It's only favorable, because there's no better alternative for the money. In a sense, interest rates are still low, for this risky of a bet to be the better alternative.

Google and the like aren't borrowing money to light on fire with their misguided attempts at new products, they're supplying it themselves from their highly profitable core business lines. Therefore their failure to produce returns aren't an indictment of current interest rates.

What they probably should start doing is paying a meaningful dividend to shareholders because they've repeatedly demonstrated they aren't capable of producing additional shareholder value with new product/business lines, but I don't see that as very likely in the near to medium term.

That's because it's more risky for the careers of the decision makers to hand cash back to shareholders and say they don't know what to do with it than it is to lay claim to some moonshot with a < 1% chance of success.

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