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How To Invest In Space Exploration

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19Fig-space infographicSpace exploration has been a hot topic lately, with more than 50 nations actively developing space programs. Some of those nations, including Russia, China and Japan, are increasingly eyeing lunar resources. These nations are striving to develop viable technologies to enable the harvesting of the moon’s natural resources, thought to include an estimated 1.6 billion tons of water ice, assorted rare elements and mineral deposits.

The United States, however, is not among the nations currently competing for access to those resources. Space travel has been a bit of a challenge for American astronauts since the 2011 shut down of the National Aeronautics and Space Administration (NASA) space shuttle program. Without their own shuttle, American astronauts have to hitch a ride with the Russians to get to the International Space Station (ISS).

The U.S. pays Russia $71 million a person for the privilege, more than three times what Russia charges other people making the same trip, according to a 2014 CNN report. And, in true ‘frenemy’ fashion, Russia has no problem reminding the U.S. that a privilege can be rescinded.

“After analysing [sic] the sanctions against our space industry, I suggest the US delivers its astronauts to the ISS with a trampoline,” Russian Deputy Prime Minister Dmitry Rogozin commented in 2014 via Twitter after being targeted by U.S. sanctions in relation to the Crimean situation, offering a pointed, public and rather snarky reminder to the U.S. of its space travel dependency.

American astronauts have not yet had to resort to the trampoline. Russia is still taking about $400 million annually to transport American astronauts to the ISS. However, Russia probably shouldn’t get too accustomed to that extra income. This recent era of U.S. space travel dependency may very well be drawing to a close. A newly released three-phase NASA plan to put people on Mars indicates a new, ambitious day is dawning for American space exploration.

Investors And Industry Leaders See Opportunities

At the Fortune Most Powerful Women Summit on October 13 in Washington, D.C., Lockheed Martin CEO and president Marillyn Hewson expressed her opinion that Mars absolutely represents a real business opportunity and she’s not the only industry and business leader to think so. PayPal co-founder Elon Musk, who is also a co-founder and current CEO of Tesla Motors, is seriously invested in the concept of Mars as a major opportunity.

In 2002, Musk founded SpaceX, a space transport services and aerospace manufacturing company. His goal is to manufacture cost-efficient, reusable rockets, decreasing the cost of space travel and facilitating his much wider vision for Mars, a vision that includes human colonization of the red planet and mass migration. Musk is making progress toward that goal, garnering important contracts with NASA after successful launches.

SpaceX has experienced significant growth since 2002, counts Google and Fidelity among its major billion dollar investors and is currently worth about $12 billion. And, SpaceX isn’t the only non-governmental, private industry space flight company currently in operation. Virgin Galactic, Blue Origin, founded by Jeff Bezos of Amazon fame, and Stratolaunch Systems are just a few of the other aerospace upstarts to challenge industry giants, such as Boeing and Lockheed Martin.

While rocket launches and space ships do tend to monopolize space industry headlines, there are a variety of other companies producing products and services related to space exploration. Bigelow Aerospace focuses on developing space housing and Planetary Resources, Inc. is working toward mining asteroids for minerals, rare metals and other valuable substances. There are a number of companies specializing in space travel needs, such as space suits, food and assorted other supplies.

Space exploration seems to be well on its way to becoming a booming business, with plenty of opportunity for the well-informed investor. In 2013, for example, the public aerospace companies that make up the U.S. Space Foundation Index (SFI) did well enough that the SFI out-performed the more traditional Standard & Poor’s 500-stock index by about 8 percent, according to information from Bank of America.

Naturally, investing in space exploration should be categorized as an alternative investment and a risky one at that. Although risk can be reduced via careful investment strategies, costly technological malfunctions and mechanical failures do occasionally happen, especially when developing new technologies. Sometimes weather can have a costly impact on equipment or launch and landing plans. Risk is always present. Therefore, only invest what you are financially and emotionally comfortable with losing.

Buy Stocks In Aerospace Companies

One of the most direct ways to invest in space exploration is to buy stocks in aerospace companies. Many of these companies, including Lockheed Martin and Boeing, are also active in the defense industry. The U.S. Space Foundation Index (SFI) is a great place to start researching and learning about individual companies and their overall performance. As always, past performance is not indicative of future performance. For the big picture investor, there are also global investment opportunities, because many nations are seeing space industry growth.

Not everybody is interested in investing in the defense industry. Investors looking for companies that are focused purely on space travel and exploration may want to consider smaller companies, such as Orbital ATK Inc. (OA). Another, albeit riskier, option is to seek out crowd-funding investment platforms and opportunities as a means of directly investing in space travel and exploration focused companies. Before buying shares or equity in such projects, well-informed, in-depth due diligence is essential.

Invest In Supporting Industries

As the space industry experiences growth, so also do the supporting industries working to meet increased demand for their products. There is a broad range of products and services that support the space travel and exploration industries, ranging from companies producing mechanical parts and materials required in the building of space craft to factories that manufacture space suits to those supplying specialized rocket fuel.

Increase your opportunity to make successful investment decisions by closely following industry news. Study the companies that have scored important contracts with NASA and other major aerospace industry players. Make note of contract details, including what they will be providing, for how long and for how much. There’s a lot of wheeling and dealing going on in the industry. Keeping up with the details gives you a bit of a heads up on which companies can be expected to make money over the next quarter or the next year and what share prices may look like over time.

Investment Funds Can Decrease Individual Risk

Even with the best of research, investing in space exploration is still a risky business. Aerojet Rocketdyne Holdings Inc. has lost all of this year’s earnings due to a $50 million settlement in connection with the company’s October 2014 rocket explosion. In addition to the dramatic loss of the rocket, that explosion also did $15 million worth of damage to the Wallop Island launch pad it took off from. SpaceX lost a rocket this past June when it exploded in mid-air, less than three minutes after launch.

Investment funds are a good way to reduce the risks associated with investing in space exploration. With multiple investors pooling their money and investing in multiple companies, individual exposure to risk can be significantly decreased. The losses of an individual company are often offset by the gains of another. Ideally, the gains more than off-set losses, yielding a worthwhile return on the initial investment.

Those more comfortable investing with a big, well established name may be interested in more traditional sorts of managed funds. For example, Fidelity, a recent SpaceX investor, offers a defense and aerospace fund with a solid rate of return record. Over the past 5 years, the fund provided a 16.5 percent annualized rate of return. Investors with a bit more of an adventurous nature may choose to investigate the potentials of some of the smaller, newer space investment groups, like Great Britain’s Space Ventures Investors.

Founded in 2009 and quite tightly focused on space related investing, Space Ventures investors offers a mixed bag of investment opportunities, including long-term and short-term investments, as well as traditional investment opportunities and new fintech opportunities, such as crowd-funding and peer-to-peer. There are a number of these smaller investment groups specializing in a sort of democratization of aerospace investing.

Private Industry Key To Space Exploration Future

In the early days of space exploration, government agencies were the primary drivers of technological achievement and space program expansion. That is no longer the case. Between 2008 and 2013, the global space economy experienced a growth rate of 27 percent. By 2014, the space industry growth pushed the value of the industry up to $330 billion. The commercial activities of private industry are responsible for 76 percent of that value.

There are about 800 companies currently involved in the industry and an estimated $10 billion will be invested in this sector this year alone. In other words, private industry has stepped in, filling the gap of decreased government spending with business capital and investment funds, stimulating growth and the rapid development of ever more sophisticated technologies. If mankind does harvest lunar resources, mine asteroids and colonize Mars, we’ll have private industry, not government, to thank for it.

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Lifestyle

Top 10 Travel Destinations to the Start the New Decade

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For many, traveling offers an opportunity to disconnect from the everyday and experience new places and cultures. With the beginning of a new decade, it is the perfect time to start deciding your next travel adventures.

When booking your future destinations, consider these spots and tips recommended by travel expert and Bank of America ambassador, Lee Abbamonte, the youngest American to visit every country plus the North and South Poles.

1. Australia

From its deserts to tropical beaches, Australia is a beautiful country to explore. While many people might be familiar with the Sydney Opera House and the unique wildlife, there are many hidden gems in Australia.

“I’ve been to Australia 10 times and I still can’t get enough,” Abbamonte said. “One of my favorite cities is Melbourne. While it’s one of the largest cities in Australia, the heart of the city is hidden and secretive. It comes to life when you visit the alleys, laneways and arcades. The vibrant city has so much to offer: cafes, a unique street culture and street art.”

2. New Zealand

If you are going to New Zealand for the first time, Abbamonte recommends boogie boarding down the sand dunes, hiking up a volcano and visiting the Moeraki Boulders. However, if you are really interested in getting the blood pumping, take a leap from Nevis Bungy near Queenstown. It is among the highest bungy jumping experiences in the world, measuring 440 feet.

3. Mexico

“Mexico City has two of my favorite things – great food and sports,” Abbamonte said. “The street tacos are to die for, and I love going to soccer games at Estadio Azteca.”

In 2020, there will be many festivals to explore. The city is a cultural hub with music, theater, dance and food events throughout the year. While experiencing the festivities, it is also an opportune time to take a step back and enjoy Chapultepec Park.

4. Brazil

One of Abbamonte’s favorite waterfalls is Iguazu Falls located on the border of Brazil and Argentina. While Iguazu Falls might be well known, the falls themselves are truly unique. The waterfall system consists of 275 falls that stretch over approximately 1.68 miles. The Devil’s Throat is the tallest fall with a drop of more than 262 feet.

While traveling internationally can be fun and exhilarating, there are also places throughout the United States that offer memorable activities:

5. Scottsdale, Arizona

If you enjoy being outdoors, Scottsdale is an ideal place to visit. There are many trails to explore in Camelback Mountain, Papago Park and Hole in the Rock. After hiking, follow Abbamonte’s example and golf at The Short Course at Mountain Shadows.

“Scottsdale has some of the most beautiful sunsets in the States, and from The Short Course at Mountain Shadows, I get to enjoy the view while practicing my swing,” he said.

6. Boston, Massachusetts

“I love sports, so I visit Boston regularly for the professional games,” Abbamonte said. “I’m also fortunate that Boston is a beautiful city I can enjoy along the way.”

Boston is one of the oldest cities in the country. Founded in 1630, Boston is filled with history, museums and universities. If you are interested in a more unique attraction, check out the Warren Anatomical Museum, which is one of the last of its kind in the United States.

7. Portland, Oregon

What makes Portland unique are the bizarre and wonderful things you can do when you visit. For example, you can try bone marrow ice cream, stop by Mill Ends Park (the world’s smallest park) or attach your wish to The Wishing Tree.

“Portland is absolutely beautiful,” Abbamonte said. “It has a bit of everything – restaurants, bars, parks – and I enjoy the people watching. Portland has some of the nicest people while maintaining an edgy vibe.”

8. Tampa, Florida

Tampa might be known for its spring break party scene, but it has so much more to offer. For example, the city’s zoos and aquariums provide opportunities to interact directly with animals. Then you can take a break at Clearwater Beach, which is known for its soft, white sand and calm waters.

9. Santa Barbara, California

“I go to Santa Barbara when I want to recharge,” Abbamonte said. “I enjoy the food, walking around, talking to the locals and even watching a football game or two.”

There are wine tours, zoos, beaches, museums and restaurants. While taking in the city, also make time to visit the hidden gems such as Knapp’s Castle ruins.

10. England, Germany, Scotland, Azerbaijan and more

While technically more than one place, these locations have one thing in common: Union of European Football Associations (UEFA) Euro 2020. The international soccer event marks the first time the games will be held across the continent in 12 host cities.

“The year is a big one for sports,” Abbamonte said. “From sporting events in Europe to Japan, it is a fun year for travel and to enjoy once-in-a-lifetime experiences.”

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US Vows 100% Tariffs on French Champagne, Cheese, Handbags Over Digital tax

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Image via Shutterstock
By David Lawder and Andrea Shalal

The US government on Monday said it may slap punitive duties of up to 100 percent on $2.4 billion in imports from France of Champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm US tech companies.

The US Trade Representative’s office said its “Section 301” investigation found that the French tax was “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected US companies,” including Alphabet Inc’s Google, Facebook, Apple and Amazon.com.

US Trade Representative Robert Lighthizer said the government was exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

“The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets US companies,” Lighthizer said. His statement made no mention of proposed digital taxes in Canada or Britain.

The US trade agency said it would collect public comments through Jan. 14 on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for January 7.

It did not specify an effective date for the proposed 100% duties.

CHAMPAGNE, ROUGE AND GRUYERE

The list targets some products that were spared from 25 percent tariffs imposed by the United States over disputed European Union aircraft subsidies, including sparkling wines, handbags and make-up preparations – products that would hit French luxury goods giant and cosmetics maker L’Oreal hard.

Gruyere cheese, also spared from the USTR aircraft tariffs levied in October, featured prominently in the list of French products targeted for 100 percent duties, along with numerous other cheeses.

The findings won favor from US lawmakers and US tech industry groups, who have long argued that the tax unfairly targets US firms.

“The French digital services tax is unreasonable, protectionist and discriminatory,” Senators Charles Grassley and Ron Wyden, the top Republican and Democrat, respectively, on the Senate Finance Committee, said in a joint statement.

Spokespeople for the French embassy and the European Union delegation in Washington could not immediately be reached for comment.

But prior to the release of the USTR’s report, a French official said that France would dispute the trade agency’s findings, repeating Paris’ contention that the digital tax is not aimed specifically at US technology companies.

“We will not give up on taxation” of digital firms, the official said.

France’s 3 percent levy applies to revenue from digital services earned by firms with more than €25 million ($27.86 million) in French revenue and €750 million (£644 million) worldwide.

The USTR’s report and proposed tariff list follow months of negotiations between French Finance Minister Bruno Le Maire and US Treasury Secretary Steven Mnuchin over a global overhaul of digital tax rules.

The two struck a compromise in August at a G7 summit in France that would refund US firms the difference between the French tax and a new mechanism being drawn up through the Organization for Economic Cooperation and Development.

But Trump never formally endorsed that deal and declined to say whether his French tariff threat was off the table.

Reuters

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Andrew Yang Wants You to Make Money Off Your Data by Making it Your Personal Property

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Andrew Yang, 2020 Democratic presidential candidate, plans to regulate the tech industry by prioritizing in giving people the right to own their personal data (“data as a property right”), thus allowing them to make money by sharing it with companies. Currently, companies entirely own users’ data – users do not have much control over it.

Yang said, “our data is now worth more than oil” and gave emphasis to the great amount of data people create and how companies make money over it. “By implementing measures to increase transparency in the data collection and monetization process, individuals can begin to reclaim ownership of what’s theirs,” he said.

He also cited a report saying that the collection and use of Americans’ personal data has become a $198 billion industry. Yang believes that people should have more control over their data, such as being able to see how their data is being used and having the freedom to opt out if they choose.

Yang added that we need politicians “who understand technology and a modern way to regulate it,” as reported by Engadget. “In order to regulate technology effectively, our government needs to understand it. It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this,” said Yang.

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