The World Is Not Enough

A few weeks ago, I caught myself pulled in by an old James Bond classic, The World is Not Enough, starring Pierce Brosnan. In the movie, an oil heiress, Elektra King, is kidnapped. While in captivity, she becomes a victim to Stockholm Syndrome and plots with her captor to destroy an oil pipeline running to the Bosphorus Sea. There is a scene in the movie that encapsulates where we are in today’s stock market environment.

Elektra King: “I could have given you the world”
James Bond: “The world is not enough”
Elektra King: “Foolish sentiment”
James Bond: “Family motto”

An article titled “To the Moon, Mars and Beyond,” that appeared in The Wall Street Journal on February 3rd, 2018, leads us to think more deeply about the scene from the Bond movie. The article’s author Michio Kaku lays out the case for the future space race with the recent launch and success of a SpaceX rocket. Later in the article, Mr. Kaku goes on to say:¹

“Amazon’s Jeff Bezos is funding his own space port in Texas for his Blue Origin project, which has successfully reused its “New Shepard” rocket for suborbital flights, on which it tends to take passengers. Google co-founder Larry Page and other Silicon Valley billionaires have formed a company called Planetary Resources to explore the commercial possibilities of landing on asteroids to mine for rare elements used in electronics.”

We are interested in the funding of these moonshots as it pertains to the “whys” of today’s circumstances. Why are only technology-oriented billionaires interested? Musk, Bezos, Page and the other technologists are very excited about this opportunity, but it seems few other immensely wealthy people are interested at all. If this is such a great thing for wealth creation, why aren’t other mega-billionaires at this scene as it blasts off? For these techies, perhaps they believe this is a “family motto” only.
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These people are willing to take on such moonshot-type projects. It confounds us because investors in these projects are willing to put up such large amounts of capital. The cash flows which may come from these projects looks to be a thing of science fiction. Mr. Kaku addresses this phenomenon in his article stating, “The cost of rocket technology has dropped dramatically since the Apollo missions of the 1960s consumed some 5% of the federal budget. More players, both public and private, now have the financial and technical resources to join the nascent space race.”