Ideas to Invest in the Space Economy

I met a friend for coffee yesterday, tea actually. Over a cup of fresh mint tea and cherry cake, he asked if I’d heard of Michio Kaku.

‘No,’ I said.

‘You should check out his book, it’s called The Future of Humanity. ‘He speaks about space travel, it’s really interesting.’ he said. 

So after I got back home, I downloaded the book on Audible and went to bed, with the idea of space travel still travelling through my mind. 

The following morning, I was checking in on my stocks portfolio. 

I work to dollar-cost averaging and had taken stocks such as Zoom Video (NASDAQ: ZM) and DocuSign (NASDAQ: DOCU) before the lockdown. Now with new emerging themes, such as the US election, it was time to take a rain check .

I stumbled upon space travel as an investment theme.

I might not have pursued the theme given that I don’t know too much about it, but given that my friend recommended the book and I downloaded it, this was my third brush with space in 24 hours. 

Perhaps, the stars were aligned. 

So I looked up key stocks and in this article, I'll share my thoughts incase this is of interest to you.

As a disclaimer, please use my article for information only and remember to do your own research. I’m not an investment advisor and am only sharing my own research. 

Key Players

If we look directly at space travel, there are three key entrepreneurs that come to mind. 

Richard Branson’s Virgin Galactic, Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin.

We’ll take a look at each of these — mainly their mission and how we can invest in them. 

I began with Virgin Galactic. 

Virgin Galactic

As you land on their website, Virgin Galactic wastes no time in asking you to take one small step by inviting you to reserve your seat. It’s operating base is in New Mexico and if tests go to plan, Sir Richard Branson will be taking off as early as the first quarter of 2021. 

It’s mission is to use space for good.

‘We are at the dawn of a golden age of space exploration which will transform our relationship with the Earth and with the cosmos ‘— Sir Richard Branson, Founder, Virgin Galactic

From an investment standpoint, at the time of writing, Virgin Galactic (NYSE: SPCE ) was trading under $17.50 with analyst estimates ranging between a high of $28.00 and a low of $22.00. 

The stock is largely unproven, but equally, stocks feel rather affordable and 2021 isn't too far off.

If alternatively, you’d prefer to watch for a while and get more confirmation, then you can click here to subscribe to investor alerts.

SpaceX

Next on the list is SpaceX by Elon Musk, who is the founder, CEO, CTO and chief designer of SpaceX.

Wow!

SpaceX’s mission is to make humanity multi-planetary and it’s speaking of fully reusable launch vehicles capable of carrying humans into Mars and beyond.

‘…and I can’t think of anything more exciting than going out there and being among the stars.‘ — Elon Musk

There’s going to be ride share it seems, but you can’t exactly book a seat just yet. 

In terms of investing in SpaceX, unfortunately we can't do that either.

That’s because SpaceX is a privately owned company with investments from venture capital firms Founders Fund and DFJ, who've collectively contributed $59,000,000. 

However, in 2015, Google and Fidelity joined in by making a collective contribution of $1 billion. 

So if you’re keen on SpaceX, then head for Google (NASDAQ:GOOG), since Fidelity is also a private firm.

Blue Origin

Finally Blue Origin by Jeff Bezos. 

I simply love their vision of building a road to space so our children can build the future. I like that there’s a hook to building something for future generations. 

In terms of investing in Blue Origin, it’s simply not possible (yet) since it’s wholly funded by Amazon (NASDAQ: AMZN ) founder and CEO, Jeff Bezos. 

In 2018, Jeff Bezos sold nearly $2 billion of his own shares in Amazon to fund Blue Origin and plans to invest another $1 billion each year. 

However, although we can't make a financial investment, I think this one is well worth a mental investment of sorts. 

I say that since Bezos calls Blue Origin the single most important work he’s doing — and if that’s where he’s mentally invested, then I’d love to watch what comes of it. 

‘Every time you buy shoes, you’re helping fund Blue Origin, so thank you, I appreciate it very much.’ — Jeff Bezos

Other Related Opportunities

The above companies are focussed solely on space travel.

But if you're interest in the theme overall, you might want to look at other investment opportunities such as Boeing (NYSE:BA) and Lockheed Martin (NYSE: LMT).

I say this because while these companies have exposure into space flight, it’s not their primary business — so incase you’re unsure about space travel, then stocks such as these can help you gain some exposure while limiting your direct exposure.

In fact, I also mentioned Lockheed Martin (NYSE: LMT) in my post last week where I shared some investment ideas related to the US election so it's the second time we're arriving at the same name from a totally unrelated theme. Here's a link if you wish to read up on that article too.

Why Should you Care?

Space tourism is considered by many to be Wall Street’s next trillion-dollar industry so for those seeking the next big industry and the next set of ten-baggers, this is certainly an interesting area to probe. 

Although it’s somewhat far-fetched, difficult to imagine, it’s considered totally viable and has some really strong names behind it.

But more importantly, it’s also linked to sustainability. Here, let’s go back to the book where we began this article. 

Although I haven’t finished the book yet, these below are some key points. 

Kaku explains in his book that just as dinosaurs faced extinction, there’ll come a day in the next 10,000 years that humans too will face this threat — facts in the book explain just how inevitable and obvious this is. Kaku explains that it’s happened five times before and there’s no reason it won’t happen again. 

However, with humans and the current advancement in technology, we can prepare for this so that our future generations have an option and that they can live to enjoy a multi-planetary existence. 

He goes on to explain that as ludicrous and far fetched it might seem to many, as humans, we’ve progressed beyond the wildest imagination of our ancestors and future generations will do the same. 

Conclusion

Space Travel is a key emerging industry. 

Although governments have taken interest over the years, and made great progress, with new drive, enthusiasm and funding of private investors, this is now more exciting than ever before. 

Sure, we continue to have challenges on this planet and there are times we struggle just to contain a small virus, but while we set aside some effort to enhance live here and now, we must continue to invest in the longer-term vision too. 

If it hadn’t been for the foresight of our ancestors who envisioned things well beyond their circumstances at the time, several basics that we take for granted today, such as flights and the internet, would have been well outside of our reach. 

These are untested investments and definitely not for the faint hearted, but for who dare to aim for the stars, you might want to buckle up.