Tesla shares topped $ 1,200 on November 1
I can hardly believe it. What a race since I beat the table on this name two years ago when it was such a good setup for a revolutionary long term investment as I had seen it in years.
Let’s keep looking for The Next Great Revolution while everyone catches up to The Current / Past Revolutions. The next big revolution? Space.
The space revolution may be unstoppable, but it is certainly not monolithic, so let’s take a step back and get a feel for the different business models and sub-sectors of the space industry. I’ve spent the past two years studying the different business models being created for The Space Revolution and broken them down into a dozen sub-categories to help us organize the industry.
When I started studying the space industry two years ago, there were maybe a few dozen space-related companies to cover, including startups. To date, there are hundreds of space-related businesses, including startups currently operating, although they aren’t doing much business yet. Within two years, there will be thousands of companies and other space-related entities (including space-related cryptos to consider, say, like space cryptocurrency sktls) with their doors. open.
When I started trying to figure out how best to invest in The Space Revolution two years ago, there were less than a dozen space-related stocks to choose from, including Boeing BA,
Two years later, there are now over two dozen space-related stocks to consider.
Space is clearly a growing industry and if we don’t start to organize in our approach to investing right now, we will soon be overwhelmed trying to catch up.
I want to be clear that no one has a clue how many new business ideas, services and disparate applications are going to be invented as the costs of sending equipment and people into space. continue to fall.
To begin with, I have included the list of space sub-sectors and one or two examples of companies in that sub-sector. (A company like SpaceX will be on several chips below.) If the company is publicly traded, I have included its ticker. I also comment on the merits of each sub-sector:
1. Satellite / Cargo Launchers Service and Manufacturing Providers (SpaceX, Rocket Lab RKLB,
Virgin Orbit (the pre-SPAC symbol is NGCA,
), Relativity, Blue Origin. Difficult to do, high barriers to entry, rapidly falling prices.
2. Company of crew launchers and service providers (SpaceX, Blue Origin, Virgin Galactic SPCE,
). Even harder to do, barriers to entry higher, prices rise but will eventually drop significantly, allowing a tipping point in demand.
3. Rocket propulsion manufacturers (SpaceX, Northrup Grumman NOC,
Arianespace, Rocket Lab). Difficult to do, high barriers to entry, slowly falling prices.
4. Satellites manufacturers (Maxar MAXR,
Rocket Lab, SpaceX). Not very difficult to do as satellites are increasingly becoming servers / computers in the sky, low barriers to entry, prices are falling rapidly.
5. Satellite constellation companies (Black Sky BKSY,
Planet (the pre-SPAC symbol is DMYQ,
), Spire SPIR,
Maxar, SpaceX’s Starlink). Not very difficult to do as satellites are increasingly becoming servers / computers in the sky and the prices of payload launches are dropping drastically, low barriers to entry, prices for services seem to be dropping rapidly.
6. Spatial component suppliers (Redwire RDW,
). Kind of like a commodity margin business, medium entry barriers, stable to lower prices.
7. General space service providers (Boeing, Lockheed Martin LMT,
SpaceX). Space suits, tests, etc., do not have a very high margin or are not (yet) developing quickly.
8. Landers / rover manufacturers and service providers (Arca Space). Someday this business will exist in size and be a tough business to do with high barriers to entry with great margins.
9. Space hotels (Axiom). Someday this business will exist in size and be a tough business to do with high barriers to entry with great margins.
ten. Space mining companies (Deep Space Industries, Planetoid Mines, Shackleton Energy). Someday this business will exist in size and be a tough business to do with high barriers to entry with huge margins.
11. Space factory companies (Cosmic Shielding, Deep Space Industries, Varda Space Industries, Made In Space). Someday this business will exist in size and be a tough business to do with high barriers to entry with good margins.
12. Space colonization / civilization companies (SpaceX, Blue Origin, Rocket Lab). Someday someone’s descendants are going to be really spoiled with all the wealth they have because their ancestors were one of the first settlers on Mars.
My assistant, Piper, and I have created a spreadsheet that tracks every company we can find in the space industry, and we’re opening it to the public to help us. If you are interested in joining the effort, simply join the Space Company Tracker Group at sktls.com and Piper will contact you.
Finding and buying Tesla for $ 50 two years ago was not easy. None of this has been. I remember how confident I was that my analysis on Tesla was correct and I used to tell you that every fiber of being felt like Tesla was the next big investment for us. But it didn’t happen overnight and it wasn’t painless along the way.
This is how I feel about The Space Revolution – every fiber of my being tells me that space is the next big investment for us. I work every day to try to stay on top of these trends and find the next ones we should be in. Part of the process is creating spreadsheets and tracking every space related business idea I can find.
Cody Willard is a columnist for MarketWatch and editor of Revolution Investing newsletter. Willard or its investment firm may own or consider owning securities mentioned in this column.