SpaceX and Advice

Investing

As I was writing about the innovations in space last week, I became more interested in the industry, so I read up on it a bit. I came across some interesting stuff, but SpaceX was the coolest. SpaceX is Elon Musk's other company. The one he started to fulfill his lifelong dream of creating a colony on Mars. Some personal history of Elon Musk, he started two separate companies, both of which he was ousted from, which eventually merged into what is now PayPal. Using the money he made from PayPal (even though he was ousted he still owned lots of equity in both companies), he funded SpaceX with no outside investors because he was not taking any chances of being thrown out this time around. I want to mention some of the terminologies in regards to the rockets of SpaceX. There are three stages in SpaceX rockets. The first stage is the main engine in this case the Merlin 1 that will launch the rocket into orbit. The second stage is the kestrel engine that is used in space, and the third and final stage is either the payload or a capsule with humans. Back to the story, Gwynne Shotwell, who is now the current president and C.O.O. (Chief Operating Officer) of SpaceX, started as a saleswoman. She was the main reason SpaceX eventually became a shipping company or a UPS to space by grabbing the attention of the U.S. government. SpaceX secured the U.S. Department of Defense as their first client. When they launched their first rocket, the Falcon 1, in March 2006 the rocket blew up including the Department of Defense's payload. SpaceX then launched their second rocket a year later and while the first stage went well it also blew up. The third try for the Falcon 1 rocket a year later on August 2, 2008, also blew up. But Elon musk was not deterred. When Elon started SpaceX he claimed he had enough money to fund the creation of three or four rockets, but in 2008 he had put all of his remaining money into Tesla and the United States was amid the Great Financial Crisis making everything that much more difficult. In the end, Elon was forced to take on an outside investment from Peter Thiel and his Founders Fund. Funny enough, Thiel replaced Elon at one point as C.E.O. of Elon's company. Thiel invests 20 million in SpaceX to do a fourth launch. Finally, it was September 28, 2008, and by this point, the only government that trusted SpaceX was the Malaysian government. And even they only gave them a dummy satellite to launch. The launch was successful. Elon Musk is quoted in his speech after the successful launch as saying "... as the saying goes fourth time's the charm" After that SpaceX launched the actual payload successfully. Following their success they moved on to phase two the Falcon 9 rocket, simply nine Falcon 1 rockets (obviously not as simple as that but that's the basic idea). SpaceX then received a twelve mission contract from NASA to resupply the ISS (International Space Station). At the time this was a complete change in the way NASA had run its missions. SpaceX was ideally suited to make these missions so much cheaper for NASA because SpaceX was vertically integrated (meaning all components are built in-house as opposed to horizontally integrated where everything is manufactured in different places and the company is only assembling the finished product). The complete reasons as to why SpaceX had such a cost-effective product are too complex to go into right now. But the general idea is that the incentives were for the companies involved in manufacturing the components for the rocket to cause it to cost as much as possible. This was because their payment was a percentage of what the final product cost so the incentives in place were to make it cost more. To give some numbers to this, if NASA had gone about making the rocket the way it had in the past, it would have cost four billion dollars versus 850 million with SpaceX. After a couple of test flights of the Falcon 9 rocket, SpaceX completed the first of their twelve mission, successfully resupplying the ISS on May 22, 2012. In 2015 SpaceX landed the first rocket ever successfully, again on their fourth attempt. Interestingly, the way SpaceX lands their rockets is by a hover slam. Using extremely precise sensors and calculations, right before the rocket is about to hit the ground they fire the engines just to the point that it brings the rocket to 0 mph, and then the rocket touches down. SpaceX has another rocket now called the Falcon Heavy which is three Falcon 9 engines or 27 Falcon 1 engines. There is also a website that allows you to book space on one of the rockets allowing for price transparency in a market that has never had that. This is another example of a company that I would love to invest in but is sadly private.

Credit to the Acquired podcast. 

Advice

I am really happy because I was about to write about the importance of talking things out and then I thought that I might have already written about this before. So I looked back at my previous posts and it turns out I did. The reason I'm happy is that I have made it to an important milestone in my blog. I do not remember every post I made. Now I thought of something interesting to try this week. It is not exactly talking something out, but similar and requires your feedback. Currently, I am learning to trade stocks, and I have always been interested in psychology. I cannot say I will act at all on your feedback, but I am curious about what you think suits me better. Therapist, trader, or both? Feel free to explain, expound, and explicate as much as you want. Looking forward to your feedback.