Benjamin Beck, CFP®No, I'm Not Getting You Into the SpaceX IPO
Over the past couple of weeks, I have received a handful of phone calls and emails about the pending IPO for SpaceX. What is interesting about a lot of these calls is that they have not come predominantly from clients. They have come from people I know. Friends. Acquaintances.
There is a very similar tone to each conversation. Not necessarily excitement. Not even curiosity, exactly. It is as if they are feeling like they are about to miss out on something big. And the conversation usually heads in the same direction. Can you get me access to it? How do I buy shares? Do you think I can get involved?
Underneath every one of those questions is the same concern. What if this is really huge, and I am not able to be a part of it?
It is fascinating to me, because IPOs have lost a lot of the significance they once had. Twenty or thirty years ago, a company going public was a major event. There were fewer ways for companies to raise capital, and IPOs were the primary path to it. People made fortunes. The stories were exciting. The opportunities felt rare.
Today it is completely different. You have private equity, venture capital, private placements, every kind of institutional funding. And by the time many companies go public, information moves so fast that a lot of what people are hoping for has already happened. Yet people still feel like they are missing out.
We Are the Turtle
It reminds me of something I learned from Nick Murray a number of years ago. It involves the old fable of the turtle and the hare. We are the turtles. We and our clients are the turtles. That probably does not sound very flattering, at least at first. But stick with me for a moment.
When we work with someone, we begin by identifying what is most important to them in their lives. We establish what they are trying to accomplish. We create a plan. We fund that plan. We review it. We adjust it over time as their life changes. And then we continue executing on it, over and over and over again.
What we do not do is look for shortcuts. We do not look for the quick fix. We do not go seeking out the magical investment, the mythical investment, the unicorn that is going to change someone's financial circumstances overnight. We are trying to accomplish something we believe is far more important. We are creating a high probability of success. That is a very different objective than finding the next big winner.
Boring Is Extraordinary
One of the things I find ironic about these IPO conversations is that people often describe our approach as boring. After all, we are broadly diversified. We own large, established companies. Businesses with long operating histories. Companies that have survived multiple economic cycles, recessions, wars, inflationary periods, every challenge the world has thrown at them. The S&P 500, with dividends reinvested, has compounded at about 10% a year over long periods of time.
To some people, that sounds like plodding along. To me, it sounds extraordinary. And the beautiful thing about the way we diversify is this. We will never own enough of one company to make an absolute killing over a short period of time. But we will also never own enough of one company to get killed by it.
That's not a bug. That's the feature.
Contrast that with the mindset surrounding an IPO. Let's say SpaceX goes public. Let's say the valuation is enormous. Let's say the stock doubles immediately. Even if it does, what exactly have we learned? We still have a company with a very limited public operating history and uncertain future earnings, at a valuation now twice as high as it was the day before. The fact that the stock went up does not prove it was a good investment. It simply proves that, at this particular moment, more people wanted to buy it than the day before. Those are not the same thing.
Missing the Story
The more I thought about these conversations, the more I realized the fear is not really about missing the investment. It is about missing the story. It is about feeling left behind. Nobody wants to be the person who hears afterward that all their friends bought the IPO and made a fortune while they sat on the sidelines. Nobody wants to feel like everyone knew something they did not. Nobody wants to feel foolish. That is a far more powerful force than most people realize. In fact, I think it is one of the most powerful forces in investing.
This past week, I finished Morgan Housel's newer book, The Art of Spending Money. He wrote a very popular one before it, The Psychology of Money. One of the biggest takeaways I had from this one is that many of us confuse what actually improves our lives with what looks impressive to other people. We spend money on things that create admiration instead of utility. We pursue status when what we really want is fulfillment. We chase the things that signal success instead of the things that actually create it.
The same thing happens in investing. We confuse excitement with progress. We confuse action with intelligence. Scarcity feels like, if I do not get in on this now, I will miss it. But scarcity is not the same as opportunity.
And perhaps most dangerously, we confuse a good outcome with a good process.
Where the Finish Line Is
The clients I have watched achieve the greatest levels of financial independence are, by and large, people who are not all that interested in IPOs, hot stocks, cryptocurrencies, or whatever the investment of the moment happens to be. They are human, of course. They are curious. They ask questions. They read articles. They are not out there with their heads buried in the sand. The difference is that their curiosity never becomes so strong that it demands a change to their process.
The people who ultimately accumulate life-changing wealth do not possess some superhuman ability to predict the future. They do not know, or for that matter care, which IPO is going to double. What they possess is something far more valuable. They do not carry that driving insecurity of, if I do not participate in this, I will fall behind. Instead, they have a certain amount of peace. They understand that, with our help, they are already on the path to success. They know exactly where they are going. They know what their money is for. They know what the plan is designed to accomplish.
And because of that, they do not feel compelled to act the moment they hear something in the news about an IPO that everyone feels is leaving the station. They are the turtle. That's us. Not because they are smarter. Not because they know what is coming. It is because they understand where the finish line is.
The irony, at least for me, is that most people think successful investors possess some special ability to find incredible, once-in-a-lifetime opportunities. My experience has been the opposite. The most successful investors I have worked with have become comfortable watching opportunities pass them by. Indifferent, maybe, is the better word, to the things that only appeared to be opportunities.
They've learned that the feeling of missing out is often far more painful than the reality of missing out.
And they have learned that accumulating significant wealth rarely feels exciting while it is happening. It feels repetitive. Disciplined. Ordinary. Slow. Pick the word. Until one day, after 20 or 30 years of doing these ordinary things over and over again, and doing them extraordinarily well, the results become anything but ordinary.
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Ben Beck is Managing Partner & Chief Investment Officer at Beck Bode, a deliberately different wealth management firm with a unique view on investing, business and life. This was written as part of a newsletter series called Relentless Abandon, subscribe here.
Common Questions About the SpaceX IPO
Should I invest in the SpaceX IPO?
That is a question to work through with your own advisor in the context of your plan, not a headline. The more useful question is why the opportunity feels urgent. Often the pull is about not wanting to miss the story rather than the merits of the investment itself.
Why have IPOs lost some of their significance?
Decades ago, going public was one of the few ways a company could raise meaningful capital, so IPOs were rare and exciting. Today private equity, venture capital, and private placements mean much of a company's growth often happens before it ever reaches the public market.
What is the fear of missing out in investing?
It is the discomfort of watching others pursue something and worrying you will be left behind. In investing it is one of the most powerful forces there is, because the feeling of missing out is often more painful than the reality of missing out.
Is a diversified, long-term approach too boring to build wealth?
Broad diversification means never owning enough of one company to make a killing, but also never enough to get killed by one. The S&P 500 with dividends reinvested has compounded around 10% a year over long periods. Ordinary, repeated well over decades, tends to become extraordinary.
Want an investment approach built around your plan, not the headline of the week? Start a conversation with Beck Bode.
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