🚀 Space Stocks To The Moon?!

What’s on the Menu 🍴

Today we’ve got our heads in the clouds…

Looking at what it takes to build life-changing wealth, and look at how high the stock market can go.

We’re also exploring how space stocks are primed for explosive growth.

Let’s roll:

• Space Stocks To The Moon?! 🚀

• 6 Wealth Building Tips From a Pro 💰

• How High Can The S&P 500 Really Go? 📈

• This Stock Trader Lost EVERYTHING 📺 

Today’s newsletter is a 5 minute read.

Space Stocks To The Moon?! 🚀

After decades of stalled progress, humanity is finally getting motivated again to explore space.

The evidence keeps piling up:

• 2023 was a record year for orbital launches

• Elon Musk’s SpaceX is aiming to land on Mars before the end of the decade

• Jeff Bezos’ Blue Origin is planning moon landings & private spaceflight

• The James Webb telescope, launched in 2021, continues making groundbreaking discoveries

• Japan just completed their first moon landing

• China aims to land on the moon by 2030

• Space themed shows such as Apple’s “For All Mankind” have become highly popular

For All Mankind envisions a world where humans landed on Mars in 1995

This enthusiasm for space has also started to show up in the stock market…

A handful of companies that are launching rockets & payloads to space are now publicly traded.

One of those, Intuitive Machines (ticker: LUNR), is attempting to land cargo on the moon this week on behalf of NASA.

Over the past few trading sessions, the stock has nearly doubled:

Meme stock & crypto traders often exclaim that an asset is about to moon.

With a ticker like LUNR, and a company that is LITERALLY about to land on the moon this Thursday, further explosive moves could definitely happen!

LUNR has a pretty small tradable float, with just 21 million tradable shares or roughly $200 million worth as of Tuesday.

That adds fuel to the short term gain potential.

However, we are always mindful of risks here at the Daily Dough.

LUNR has another 71 million non-traded “class C” shares that could be converted to common “class A” shares in the future.

That means the true market cap is closer to $1 Billion today.

Space companies also typically have significant capital requirements, high cash burn, volatile revenues, and catastrophic event risk.

There are many space focused companies that have withered into bankruptcy in the past.

SpaceX is an exception, with a steadily rising valuation over $100 Billion despite numerous capital raises to fund cash burn.

That’s likely because of Elon’s involvement, the success of the Starlink internet service, and SpaceX remaining private.

Still, companies such as Intuitive Machines and Rocket Lab (ticker: RKLB) are gaining more cult followings.

If they can successfully complete more missions in the coming years, they could see their stocks rocket to new heights! 🚀 🚀 🚀

6 Wealth Building Tips From a Pro 💰

22 years ago I started my journey as a trader & investor…

And over the past 10 years I’ve been building wealth with bitcoin and crypto.

This week I shared my story on the Investor Summit’s Trader Talks, and wanted to share 6 of my top lessons with you here.

1. Know When to Cash Out

One of the most crucial lessons in trading and investing is recognizing the moment to take profits. The thrill of a winning trade can be exhilarating, but the discipline to secure those gains is what separates successful investors from the rest.

Life-changing profits don't come by often, so when they do, ensure you have a strategy to realize those gains and protect your wealth.

2. Leverage: A Double-Edged Sword

Leverage can amplify your returns, but it can also magnify your losses. The key to using leverage effectively is meticulous planning.

Understand the math behind your trades to prevent unexpected liquidations. Remember, leverage should be a tool, not a gamble.

3. Predictions vs. Planning

The markets are inherently unpredictable, and attempting to forecast their next move can be a fool's errand. Instead, adopt a more strategic approach by considering all possible market scenarios.

Weigh the probabilities of different outcomes and develop plans that allow you to manage risk under any circumstance. This mindset shift from prediction to preparation can significantly enhance your resilience in the face of market volatility.

4. Building a Perpetual Wealth Machine

The ultimate goal for any investor should be to create a self-sustaining wealth machine. This involves maximizing cash flow, minimizing unnecessary expenses and taxes, and dedicating time to high-return activities.

Strive for a portfolio that achieves "escape velocity," where your investments not only sustain themselves but also continue to grow independently.

5. The Bitcoin Benchmark

In the vast sea of cryptocurrencies, it's easy to get caught up in the latest altcoin hype.

But history has shown that Bitcoin remains the cornerstone of the crypto market. While diversification is important, be wary of the allure of new coins promising to outperform Bitcoin in the long run.

6. Surround Yourself with Success

Finally, the importance of community cannot be overstated. Surrounding yourself with successful traders, investors, and entrepreneurs can provide not just inspiration but also practical insights and strategies.

The collective wisdom of a knowledgeable community is an invaluable asset on your wealth-building journey.

How High Can The S&P 500 Really Go? 📈

It’s been a wild ride in the stock market as the S&P 500 and the Nasdaq have made new all-time-highs.

It feels like the market is on a high and the good times will never end.

In the Daily Dough near the end of January, we pointed out the $5,000 price level in the S&P 500 as the next big zone price could fly to.

Now that we’ve achieved this, it begs the question of: now where does it go? Now what do we do?

One of the big arguments for the index flying higher, has been the amount of cash parked in money market mutual funds.

Essentially, with higher interest rates, and the risks that existed for a recession, it encouraged a lot of people to collect low-risk money market fund interest and sit the stock market out.

The problem with this, is the risk of recession declined, and the S&p 500 chugging higher meant people sitting in money market mutual funds weren’t participating in this rally.

Heck, since the major pivot low in October of 2023, the S&P 500 is up 21%!

This is going to mess with some investor and even money managers minds as stock returns WAY outpace money market mutual fund returns (granted, yes, money market funds are much lower risk, and the returns for that are still great).

Nonetheless, it certainly will play games with the psyche.

So, now that price has run, people are possibly “FOMO-ing into the stock market”. They don’t want to miss out on future gains, so they’re getting invested for fear of missing out.

So now, people are feeling good and the price targets are rolling in from larger investment firms.

Goldman is putting out a $5,200 S&P 500 price target.

To be frank, this isn’t that out of the realm of possibility to get to, especially with the S&P 500 corrections being so shallow, which signals a lot of buying pressure.

Not only that, there’s still a lot of cash to be put to work in the markets if people wanted to. So this rally indeed may not be over.

But, we also think like contrarians around here, and when things get too exciting, we like to dig into what could surprise investors.

For one, we’re still in the thick of earnings season. Based on Factset data, we’re seeing positive earnings growth, and full year earnings growth is expected to be 10.9%.

That is good news considering 2023 is expected to see muted growth just shy of 1%.

The question becomes, is the stock market worth buying here at 20 times earnings? What if it goes higher?

This valuation of the S&P 500 is above the 5 and 10 year price to earnings averages of 19x and 17.7x, respectively.

Even looking forward to 2025 earnings, the S&P 500 is STILL not a screaming value here.

Granted, valuations can go much higher as we’ve seen historically. As seen in the image below, during the pandemic, we saw an over 22x P/E ratio. It was even nuttier during the dotcom bubble. This partly shows us how close to “topping out” the S&P could be.

Eventually valuations will get too stretched.

I think we need to keep our eye on where the price to earnings ratio goes to try to time a deeper pullback.

The goal is to not be surprised… and to look for the opportune times to add capital to our investing buckets.

Higher valuations = higher risk of corrections.

This doesn’t mean we’re going to see a correction strong enough to put us into a new bear market (we’re not even close to that!). That is not even a base case scenario at this point in time.

The P/E ratio getting too high should simply put investors on alert for an opportunistic correction.

Again, the goal as investors is to be one step ahead, and not be surprised.

The market seems to be pretty excited about the future by the way things are priced, but, it doesn’t mean risks don’t still lurk.

If the Fed ends up not lowering rates as soon as the stock market wants, that could help the correction along.

Of course, no one can predict the future… but, we can prepare you for all possibilities and probabilities going forward.

Video Of The Day:
This Stock Trader Lost EVERYTHING 📺 

I couldn't help but react to this stock trader who lost everything...

I unpack all of the things this trader said and did that led to the wrong mindset and big mistakes.

As someone who has worked with thousands of traders on their mental game, I give 6 main reasons why most traders lose money.

After watching, you can hopefully look at your own stock trading and make sure none of these apply to you. However, if you do find you're making some mistakes, we can help you in our Wealth Building Community.

Food For Thought 🧠

"If you want to succeed you should strike out on new paths,
rather than travel the worn paths of accepted success.”
- John D. Rockefeller

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.