Mission accomplished Monday – Let space tourism begin!


Yesterday Mr Branson took 90 minutes of his busy schedule to get to space for a quick float (enter to get your own trip here) and, although this is a small step for Sir Richard, it is a giant leap for the future of mankind as we are now a big step towards the reality of space travel opening up to the masses. Well the very, very rich masses – but that too will change.

Russia was charging $ 20 million to take people to the International Space Station and Jeff Bezos is about to launch his first rocket with his first passenger paying $ 28 million for a 15-minute flight, so the 90-minute flight Branson’s $ 500,000 (but the same 3-5 minutes in real space) is kind of a bargain and that’s why Virgin Galactic Holdings (SPCE) is up 5% this morning – even though it is already trading hundreds of times what it is likely to earn over the next several years ($ 12 billion).

SPCE lost $ 50 million per quarter recently, but that’s not so bad in the grand scheme of things. Carnival cruise lines lost $ 10 billion last year and are losing $ 1.5 billion quarterly this year and the only way to access space on one of these ships is to make it. too much at the bar.

It is a great moment in the history of mankind. In 1914, the first commercial airline flight took off from St. Petersburg, Florida, and flew to Tampa, Florida, 21 miles away! In 1913, a trip between the two cities, located on either side of Tampa Bay, took two hours by steamboat or 4 to 12 hours by train. Traveling by car around the bay took about 20 hours. The flight will take approximately 20 minutes.

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The aircraft had a top speed of 64 mph (103 km / h). The shell was made of three layers of spruce with a fabric between each layer. The wings were made of spruce spars with linen stretched over them. The plane was built to hold only one pilot and one passenger side by side on a single wooden seat.

The first flight took off on New Year’s Day, 1914, with great pomp and circumstance. About 3,000 people marched from downtown St. Petersburg to the waterfront to watch the auction for the first ticket. Former St. Petersburg mayor Pheil, then in the warehouse business, won the award with a bid of $ 400 (over $ 40,000 in today’s dollars).

Actually this flight didn’t go very well and the plane had an engine problem and landed in the bay but they fixed it (you could just hit them with a wrench back then) and were able to take off and continue the flight, which never went more than 50 feet above the water. After that, the airline carried out two flights a day, six days a week. The regular fare was $ 5 per person (about $ 500 in today’s dollars) and $ 5 per 100 pounds of freight. Tickets sold out 16 weeks in advance. A second Benoist airboat was added and flights were extended to Sarasota, Bradenton and Manatee.

What we will do in 100 years is hard to imagine. What was impossible yesterday is an accomplishment today, while tomorrow heralds the incredible, “ That’s what Mayor Fansler said then and it’s just as true today with 13 MILLION people flying over our planet every day, nearly 5 billion people every year, which represents almost all of our population – lifted off the ground and sent to 30,000 feet. So don’t let people tell you we can’t leave this planet – we do it all the time!

It’s amazing and exciting, but is SPCE a good investment? Well, the company that was carrying passengers to Florida for $ 5 went bankrupt in 4 months. It wasn’t until 1925, when Ford (F) bought out the Stout Aircraft Company and began manufacturing the all-metal Ford Trimotor planes, which carried 6 passengers or cargo (not both) about 100 miles , that commercial aviation has become a reality. That was less than 100 years ago and that’s pretty much where the SPCE is.

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Ford (F) wasn’t even a public company until 1953, when they went public at $ 3.2 billion (now $ 57 billion and miles more than historic highs of over $ 100 billion). Of course Ford was like Boeing (BA) – they only made the planes. Betting on an individual airline at the time was a one in a thousand chance that it wouldn’t go bankrupt. (not much different today as most of them went bankrupt at some point), so why will SPCE be any different?

Well, they’re better funded than most airlines, but Branson is 70 now and who knows what kind of promoter will be the next boss? F has gone up 100 times in 100 years and I’m sure if you had picked a winning airline (and certainly BA) you would have done just as well – averaging 100% per year for 100 years. What could be better than that?

DON’T BE DECEPTED IT’S BETTER THAN THAT !!! Almost any business that grows and lasts 100 years will make you 100 times more. Try this compound interest calculator and put $ 1 for 100 years at 5% growth (interest) and you’ll end up with $ 131.50! The problem is, most people don’t have the PATIENCE to invest like that and the first year you have $ 1.05, year 2 is $ 1.10, year 3 is $ 1.155 … . You certainly don’t feel like you’re getting rich along the way, but the math makes it inevitable – if you have the patience to let it work.

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But, if this is the case with ANY reasonable rate of return, why would you RISK your money by betting on some unknown stock or another that COULD win in the future when there is so much for sure. Pfizer (PFE) pays a 4% dividend and we have a rapidly aging population that needs more pills – what could be a simpler premise than that? AT&T (T) pays a 7% dividend and every time a new subscriber is born they get an iPhone – very simple. Apple (AAPL) only pays a 0.6% dividend (because its stock has risen so fast it hasn’t risen) and still only sells phones and computers – lots of room for growth ….

Don’t gamble with your investments is lesson # 1 at PSW and that means don’t chase sexy trends with the money that matters to you. Of course, we can still have fun with our excess profits – with the money we earn that is more than what we PLAN to earn for our retirement – but don’t play with it all! Treat the risk with respect and keep all those eggs in different baskets – we never really know what the future holds.

We’re back to work this week just like the Fed with 11 on-time speeches (2 by Powell) and tomorrow we have a scary CPI, a Weds PPI with the Beige Book as well as the New York Fed reports. and Philly on Thursday with Inducstrial Production and Consumer Sentiment on Friday:

Calendar July 11, 2021

But that’s okay because it’s PROFIT SEASON again and look at all the great companies we’ll be hearing about this week and next. Will profits be good enough to support these all-time highs in the market? I can’t wait to discover:

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We still have a lot of bullish positions but we did a good test of our hedges last week and they are working great so we are confident but we also have a stop on our matched portfolios at $ 2M (now $ 2.15M) like it’s already the case. gambling money that we weren’t afraid to risk after the last portfolio cycle took us from $ 600,000 to $ 2 million and we cashed it in. And that’s the right way to do it when you’re getting ahead – move most of the bonus money into something very safe, then play with what’s left.

We have been very aggressive in this cycle, which started in October 2019 with $ 600,000 and thank goodness we had put that $ 1.4 million aside as the market collapsed in March 2020 and, rather than Panicking, we were able to jump on the opportunities with $ 1.4M (of the initial $ 600,000) still safe in our banks. This is why playing it safe can be exciting because sometimes the market doesn’t go straight up!


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