Like all sectors, they can go in and out of style. The anticipation of SpaceX going public this summer is huge. Will it merge into Tesla and will X be part of it?
I was never a sci-fi fan, though I did love the original Star Wars saga very much. I was never a video gamer either. Seems you need some of that DNA to try to understand the potential in this sector. I don’t think we will ever live on Mars, perhaps I lack the imagination, but there is probably a good case for mining or energy production in space.
It is beyond impressive to see a rocket launch a satellite into space and then land and use it again. The history of technology break-throughs are disinflationary. The internet was born out of the origins of space exploration decades ago. Now we are going back to the moon. The potential benefits to the world are significant.
When I sit in an investment meeting, I ask what my internal rate of return is likely going to be in the future. The first venture capital investment from Founders Fund Management was in August 2008, only a few weeks before the Lehman Brothers bankruptcy and the global financial crisis debacle. The (Ontario Teachers’ Pension Plan) made an investment in 2019. The talk is a $1.75 billion initial public offer (the biggest ever by a galaxy). It would be in the top 10 of companies in the world and it’s valued at astronomical levels.
While it’s an exciting story to be sure, I’m not sure I’ll be a buyer, but every index investor in the Nasdaq 100 will be. Caveat emptor.
