Treasury yields are rising, stocks are falling, and hypergrowth stocks with rich valuations are getting the worst of it. It’s all everyone in the financial markets is talking about.
In Friday’s issue, we talked about why this is happening. We explained why the sell-off is overdone and why this is a buying opportunity for long-term investors considering the historically low basis of rates today, the huge deflationary forces at work in the world, and the healthy trajectory of corporate earnings.
But here’s another simpler and even more important reason:
Technology hasn’t stopped.
That is, visionary entrepreneurs around the world are still formulating and pushing forward on groundbreaking technological ideas.
The genius engineers creating these technologies are still hard at work in offices and research labs across the globe, turning these disruptive ideas into widespread realities.
The innovative businesses built on these breakthrough technologies are still changing the world.
Whether it’s a 1% 10-Year Treasury yield or a 10% 10-Treasury yield; a 20% increase in equities or a 30% decrease in equities. It doesn’t matter…
Technology doesn’t stop.
Innovation doesn’t stop.
So when I see every company in a truly disruptive, innovative technology sector down 10% or more over the past week, I see a buying opportunity.
One such sector is space.
Some of the most visionary entrepreneurs and smartest engineers in the world are working tirelessly to advance in-space propulsion technologies to the point where flying to and from space will be as easy flying in between cities.
Space Race 2.0 is here.
Over the past twelve months, space companies like Blue Origin and SpaceX have launched multiple successful “test flights,” which put us mere months away from safely and sustainably flying people and objects into space at a regular basis.
Over the subsequent few years, the technology will only get better and the costs will only come down – meaning the cost-effective, rapid transit to and from space will be a widespread reality within the next five years.
This will lay the foundation for the multi-trillion-dollar Space Economy to come to life.
We will start flying people into space as a sort of uber-expensive “Disneyland” ride …
We will start mining asteroids for more usable and drinkable water, as well as for precious metals …
We will start creating space-based solar farms that can produce significantly more solar power per square foot than Earth-based solar farms …
We will start building data centers in space for 24/7 global connectivity …
We will start creating space-based cellular networks …
In the Space Economy – as is true in space itself – the opportunities are endless.
Yet many space stocks got crushed this past week, since they are pre-revenue companies that derive almost all of their value from future cash flows.
Therefore, as rates moved higher and the present value of those future cash flows decreased, space stocks plunged.
This is a golden buying opportunity into one-of-the-most disruptive megatrends of our lifetimes.
That’s because many of these space companies are $50-plus BILLION titans of space in the making … and yet they feature $1 billion, $2 billion, maybe $3 billion market caps today.
Higher rates don’t matter when you’re talking about companies that can increased 50-fold.
These are generational investment opportunities. Take advantage of recent weakness.
Which stocks do I like best? Well, when it comes to the Space Economy, I have my “Fave Five,” which includes:
- Virgin Galactic (NYSE:SPCE), the “space tourism” category-creator that, by 2030, will have dozens of spaceships flying thousands of people to and from space – a business that will be generating billions of dollars in revenue at scale.
- Momentus (NASDAQ:SRAC), the space tech company that is partnered with SpaceX and which I like to call the “space mobility” company – since it’s proprietary water propulsion technology platform will one day be the tech platform upon which everything moves in space.
- AST & Science (NASDAQ:NPA), who is building the world’s first space-based cellular broadband network and which is miles ahead of everyone else in this space – with the potential to one day change how we all access the internet.
- Astra (NASDAQ:HOL), who could one day turn into the “FedEx of Space” with its low-cost, highly-scalable small rockets that can be launched into space much more frequently than the big rockets SpaceX is building.
- Maxar (NYSE:MAXR), a more-mature satellite company that has the incumbent infrastructure, expertise, and technology to be a trusted satellite provider for all the companies looking to establish a presence in space.
That’s my “Fave Five” in the Space Economy. I think all of them have 10X to 50X upside potential.
Sure, it’s unlikely that all of them succeed to their fullest potential. Some may even go bust.
But in a portfolio of these five stocks, the winners will more than offset the losers, and the long-term gains could be enormous…
These are some of my top picks in the space economy, but there’s one stock that will score investors big returns … the biggest returns of any stock in any industry.
It’s a company that reminds me of a young Amazon (NASDAQ:AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.