Tesla shares topped $1,200 on Nov. 1
I can hardly believe it. What a run since I pounded the table on this name two years ago when it was as good a setup for a long-term Revolutionary Investment as I’d seen in years.
It’s the picks that go up 20-fold such as Tesla
in EVs since 2019, or SolarEdge
in solar since 2016, or the ones that go up 400 times like bitcoin
did for us in cryptos since 2013, or the dozen or so 10- to 100-baggers that we’ve had over the last 20 years that have gotten everybody looking for the next big thing.
Let’s continue to look for The Next Great Revolution while everybody’s catching up to The Current/Past Revolutions. The Next Great Revolution? Space.
The Space Revolution might be unstoppable, but it definitely isn’t monolithic, so let’s step back and get a sense of the different business models and subsectors within the space industry. I’ve spent the last two years studying the various business models that are currently being created for The Space Revolution and I’ve broken them down into a dozen subcategories 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. As of today, there are hundreds of space-related companies including startups currently in business if not exactly doing much business yet. Within another two years, there will be thousands of space-related companies and other entities (including space-related cryptos to consider, say, like the sktls space cryptocurrency) 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
Two years later, there are now more than two dozen space-related stocks to consider.
Space is clearly a growth industry and if we don’t start to get organized in our approach to investing in it right now, we’ll soon be overwhelmed trying to catch up.
I want to be clear that nobody has any idea just how many new disparate business ideas, services and applications are going to be invented as the costs to send equipment and people to space continue to plummet.
To get us started, I’ve included the list of space subsectors and an example or two of companies in that subsector. (A company like SpaceX is going to be found on several bullets below.) If the company is publicly traded, I included its ticker. I also comment on the merits of each subsector:
1. Satellite/cargo launch vehicle manufacturing and service providers (SpaceX, Rocket Lab
Virgin Orbit (pre-SPAC symbol is
), Relativity, Blue Origin. Hard to do, high barriers to entry, prices dropping rapidly.
2. Crew launch vehicle company and service providers (SpaceX, Blue Origin, Virgin Galactic
). Even harder to do, higher barriers to entry, prices are rising but will eventually drop dramatically, enabling a tipping point in demand.
3. Rocket propulsion manufacturers (SpaceX, Northrup Grumman
Arianespace, Rocket Lab). Hard to do, high barriers to entry, prices dropping slowly.
4. Satellite manufacturers (Maxar
Rocket Lab, SpaceX). Not terribly hard to do as satellites increasingly become servers/computers-in-the-sky, low barriers to entry, prices dropping rapidly.
5. Satellite constellation companies (Black Sky
Planet (pre-SPAC symbol is
Maxar, SpaceX’s Starlink). Not terribly hard to do as satellites increasingly become servers/computers-in-the-sky and the prices of payload launches drop dramatically, low barriers to entry, prices of the services seem to be dropping rapidly.
6. Space component suppliers (Redwire
). A bit of a commodity-like margin business, medium barriers to entry, prices steady to lower.
7. General space service providers (Boeing, Lockheed Martin
SpaceX). Space suits, tests, etc., are not terribly high margin or growing quickly (yet).
8. Landers/rover manufacturers and service providers (Arca Space). Someday this business will exist in size and be a hard-to-do business with high barriers to entry with big margins.
9. Space hotels (Axiom). Someday this business will exist in size and be a hard-to-do business with high barriers to entry with big margins.
10. Space mining companies (Deep Space Industries, Planetoid Mines, Shackleton Energy). Someday this business will exist in size and be a hard-to-do business 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 hard-to-do business with high barriers to entry with good margins.
12. Space settlement/civilization companies (SpaceX, Blue Origin, Rocket Lab). Someday someone’s descendants are going to be really messed up 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 single company we can find in the Space Industry, and we are opening it up to the public to help us. If you’d like to join in the effort, simply join the Space Company Tracker Group on sktls.com and Piper will be in touch.
Finding and then buying Tesla at $50 two years ago wasn’t easy. None of this has been. I remember how convinced I was that my analysis on Tesla was correct and that I used to tell you all that every fiber of being felt like Tesla was the next great 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 great investment for us. I work my butt off every day to try to stay on top of these trends and to find the next ones that we should be in. Building spreadsheets and tracking every space-related business idea that I can find is part of the process.
Cody Willard is a columnist for MarketWatch and editor of the Revolution Investing newsletter. Willard or his investment firm may own, or plan to own, securities mentioned in this column.