Revolution Investing: This next frontier for tech investors is just getting started

Only one of these revolutions is still really early in its cycle. The others are becoming mature.

The App Revolution is probably in the seventh inning, having started originally with the advent of the iPod and iTunes when I first invested in Apple back in 2003 at a split-adjusted 20 cents a share and continuing on through The Smartphone Revolution, The Tablet Revolution, The Streaming Revolution, The Social Revolution, etc., all of which are app enablers or app-dependent for their success, standing on the shoulders of that original iPod. Then again, we still have The Metaverse Revolution phase to go through, which could be huge and long-lasting.

The Bitcoin/Blockchain Revolution is probably in its second inning and will be fully mature in another 10 years as new ways of incentivizing and structuring organizations and currencies play out.

The Social Revolution is probably in its seventh inning and is fully mature, except for the Metaverse phase of it. Remember that The Social Revolution was built upon The Smartphone Revolution, which was built upon The App Revolution, which was built upon The Internet Revolution, which was built upon The PC Revolution and The Telecom Revolution, which were built upon The Electricity Revolution and so on.

The EV Revolution is probably in its third inning and will play out over the next 10 to 15 years to full maturity, as Tesla leads the way with a handful of other startups and a few of the old-school car companies surviving, if not thriving. (Dozens of startup EVs and even some of the old-school car companies will most likely go bankrupt trying to get there.)

Most tech investors are focused on artificial intelligence or EV or crypto industries these days, and the best companies in those spaces are going to turn out to be great investments from current levels, which are 30%-90% lower than their all-time highs. It should be mentioned also that some of the best plays on AI (GOOG, NVDA) or EV (TSLA) or crypto (bitcoin, ethereum ETHUSD, +2.78% ) are already worth hundreds of billions or trillions of dollars.

The next revolution

With SpaceX leading the way, Blue Origin coming along and Rocket Lab USA Inc. RKLB, -4.04% not too far behind, The Space Revolution is only starting to play ball, and we’re here in the top of the first inning, with maybe one out and a couple runners on base.

Maybe I’m wrong that it’s obvious and maybe I’m wrong that The Space Revolution is going to create a trillion-dollar economy over the next five years and a multi-trillion dollar economy over the next 10, becoming the single biggest economy in the solar system over the next 20 years as Mars is colonized, space travel becomes part of normal life for people in the developed world (hopefully an ever higher percentage of the world will gain access to middle-life comforts such as space travel in 20 years). But I don’t think so.

The costs of launching people and equipment into space continues to plummet and the economics of SpaceX’s Starship will bring about a whole new level of cheapness.

Rocket Lab will probably continue to grow quickly as they drive their own costs down and an increasing number of new applications and ever better technologies create ever more demand for quick, cheap launch services. But the economics are still not there and probably won’t be for another year or two as the company evolves into what will hopefully become a vertically integrated part of the oligopolistic U.S. launch market.

The other current publicly traded space companies are probably even riskier than the launch companies, which at least have a competitive advantage underscored by repeated launch delays and/or failures from the Lockheed Martin Corp. LMT, +4.16% /Boeing Co. BA, +2.34% United Launch Alliance along with Astra Space Inc. ASTR, -1.33% and other wannabes.

We’re still at least a few years away from companies starting to build factories in space or mining the moon. There are several companies that plan to start building space hotels in coming years and I’ve even invested privately in one that aims to start building their hotel from the International Space Station in the next year or two.

Companies such as BlackSky Technology Inc. BKSY, -1.74% and Planet Labs PBC PL, +3.13% are trying to figure out how to create businesses around satellite imagery technology and in the next five to ten years, many disparate technology companies will put so many video satellites in orbit with such great optics, software and AI that you’ll be able to record your Social Revolution 3D surround Metaverse video content without having to hold your camera in front of your face as you witness something worth recording.

Meta/Facebook will get into the satellite business eventually, as will Alphabet (real-time maps and street views), Amazon (real-time package tracking and logistics), and maybe Comcast Corp. CMCSA, +2.64% and other media companies too. Caterpillar Inc. CAT, +1.26%, Deere & Co. DE, +0.32% and farmers will use real-time satellite technology to grow more food more cheaply. Governments and their armed and police forces will also have access to improved real-time satellite tracking technology too.

But more importantly than these obvious applications for space technologies, there will be thousands of apps and services that entrepreneurs will come up with as the costs for getting to space drop toward a nominal level in the same way that computers and the internet advanced far enough as costs dropped to a nominal enough level that The App Revolution could bring in billions of users through their phones to create trillions of dollars of economic activity around the world every year now.

But frankly, other than investing in SpaceX privately and investing some speculative capital in Rocket Lab and in BlackSky and a couple other space-related names right now, there’s not much for a Space Revolution investor to do other than learn more and be paying attention to these space trends over the next two to five years as more companies come into the fold.

Indeed, I’m short more space-related names than I am long, although I have much more capital exposed to the long side than the short side. The old space-related companies that have been around and publicly traded for decades are in trouble with ugly balance sheets and old technologies. And many of the recent space SPACs that are now publicly traded are fishy, at best.

In addition to trying to own SpaceX and/or Starlink when it comes public and some Rocket Lab and a tiny bit of BlackSky and Redwire Corp. RDW, +1.91%, I suggest investors check out the SKTLs Space Debris-Cleaning Cryptocurrency before it airdrops. They they are literally going to be giving millions of SKTLs away for free to those who register for the airdrop. (Here I am on Fox Business discussing SKTLs recently.)

To be clear, I’m as excited as ever about the prospects of making incredible returns in The Space Revolution over the next five to 20 years, but I’m worried that it’s going to be another two or three years before we start getting many opportunities to invest in good publicly traded Space Revolution companies.

As I’ve done with the prior aforementioned Revolutions and stock picks within those Revolutions, I plan to be on top of The Space Revolution for my subscribers and my hedge-fund partners by finding the best the names for us to invest in along the way. But as always, it will take time and we’ll have to work hard to remain ahead of the curve.

To the moon! To Mars!

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.