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Space: The Final Investment Frontier

Written by James Bennett Wednesday, 25 January 2012 08:50
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Abstract  


Humans have been traveling to space for a half-century.  

 In that time many people have made money from the space business, but only as shareholders of government contractors or specialised niche players such as communication satellite owners or insurers.  For unique historical reasons, a field requiring unusual boldness and scope of vision has become dominated by a small, closed group of corporations known for slowness, caution, and risk aversion.  This in turn has created an industry dominated by high costs, inefficiency, and glacial technological change.

 

A small but growing group of entrepreneurs have understood these constraints and have concluded that the real (in fact, enormous) benefits of space will only be harvested by disruptive technologies and innovative business tactics, deployed in the manner of Silicon Valley and financed by venturesome capitalists.  The companies they have formed have begun a radical assault on the industry as it has been known to date, and have already performed astounding feats.  Elon Musk, one of the entrepreneurs behind PayPal, has created Space Exploration Technologies, (SpaceX).  This company has already launched a space capsule of its own design and manufacture to orbit and safely returned, riding on a rocket also of its own design and manufacture, for a third of the cost of NASA.  It begins service to the International Space Station this year and has a billion dollars of private satellite business to launch on its books to date.

 

Other billionaires such as Jeff Bezos of Amazon.com, Paul Allen of Microsoft, Jon Carmack, the game designer, and Bob Bigelow, the hotel magnate have launched even more audacious business to design radical spaceships and space stations.  A floodgate of innovation and adventure has been opened.  

The Space Investment Report, written by former space startup CEO, tells the story of this new field, and discusses what will be real and what illusion, and, most importantly, what strategies and timing will allow the individual and institutional investor to profit from what might indeed be an opportunity in which the sky is, literally, no limit.  

 

Table of contents

 

1.  Introduction:  The Economic Promise of Space  

 

2.  Space:  A Basic Primer 

 

What is space, orbital vs. suborbital, what are the basic useful orbits, space stations, useable planetary bodies, and regions of the solar system.

 

3.  Economic Uses of Space To Date and Barriers to New Applications 

 

Space launch, communications satellites, earth observation (remote sensing), materials research, human spaceflight, orbital accommodation.

 

4.  Why Space is Hard and Expensive and What Has to Change to Make It Cheaper and Easier 

 

Limits of government operation, regulatory and legal barriers, military legacies, reusability, frequency of operations, material limits, propulsion limits.

 

5.  What’s Happening Now That Might Make a Difference.  

 

New Space economics, multiple paths of experimentation, government transition from operator to customer, new emerging markets, new technologies in development.

 

6.  From Now to 2050:  Three Scenarios For Space Development

 

Business as usual; moderate breakout; runaway development.

 

7.  Risk Factors: The Big Obstacles and How to Assess Them 

 

The five big concerns: Capital risk, regulatory/political risk, market risk, team risk, technology risk.

 

8.  How to Develop a Personal Investment Strategy for Space 

 

Assessing your goals; assessing your investment policy and position; assessing your time horizons; assessing your appetite for risk.

 

9.  The Big Upside

The Space Investment Report by James C. Bennett will be published in September 2012 by Searching Finance.  

Last modified on Saturday, 22 September 2012 20:58

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