Bill Clinton flipped a switch and changed the world.
On May 1, 2000, the former President instructed the Federal
Aviation Administration to turn off the "Selective
Availability"option on the Global Positioning System (GPS), which
had made the network of satellite signals usable only by high-tech
With the change -- which President Ronald Reagan had attempted to
make as early as 1983 -- consumer products could receive signals
from space and use the information to calculate precise location.
Today, it seems like every car on the highway has a GPS unit stuck
on the dashboard, and it's now available to consumers of the most
The companies at the forefront of bringing this technology to the
public made windfall profits. GPS unit maker
, saw its share rise from less than $10 in 2000 to more than $120
Now I'm seeing a similar opportunity.
NASA -- the United States' $18 billion-a-year space exploration
program -- is changing dramatically, which looks like a chance to
The corporatization of space
President Obama has effectively privatized the space program. He
has argued, according to a
New York Times
report, "that turning to private entrepreneurs would result in more
space flights and more astronauts in orbit than the space plan he
It's an interesting approach, and I think it speaks to the unique
facility of the private sector to make advances that government
isn't positioned to make.
Critics aren't happy with the privatization of space. But it's not
like privatization is totally foreign to NASA.
Its own support operations have long been conducted under a
private-sector contract. The United Space Alliance, theprincipal
space contractor for NASA as well as the 45th Space Wing of the
U.S. Air Force, is a
Lockheed Martin (NYSE:
I'm a believer that increasing private sector involvement makes
every process faster, cheaper and generally more efficient.
Top-down approaches to innovation are never successful, and the
private companies that have helped the United States achieve the
leading position in the conquest of space will assume their
rightful place in the next chapter of exploration.
So make no mistake, as a leading voice in support of "The Next Big
Thing," I applaud the privatization of space.
As an investor, I also approve the change. Names like
Orbital Sciences (NYSE:
will be more important than ever as we move to the next era of
space exploration. In a recent issue of
I listed a half-dozen companies in prime position to benefit from
our new "space sector." (If you're not a subscriber,
click here to watch a presentation
detailing the type of opportunities you'll find within this
Action to Take --> And as is often my advice, there are two ways
to go into the space sector: A pure-play like Orbital Sciences or a
partial play like a Boeing, which derives some but not all of its
revenue from space activities.
The downside, of course, is that a downturn in conventional defense
spending -- which is expected in most political and industrial
circles -- could overshadow positive news in the space segment. I
like the pure plays.
Investors need to be aware that White House is as important in the
space discussion as is the New York Stock Exchange. Government
action will be crucial: the Feds have been the world's No. 1
consumer of space technology to date, although this scenario could
change. And as with all things involving the government, the change
would take time.
Nevertheless, I think space has the potential to be a true
Disclosure: Neither Andy Obermueller nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.
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