A Six-Hour Self-Accusatory Depression

I love to clean and do laundry.

Everyone sets aside time to do these things. Obviously.

They are chores. But they’re my favorite time to focus on audiobooks and podcasts besides running since there’s no first or second-screen distraction.

This year (or this month), a few friends and new acquaintances have asked me for recommendations on what to read to “learn more about investing.”

I have a prepared answer since this has been a response I’ve fine-tuned in the past decade.

But this year, I added more fiction books to my reading list.

My favorite category growing up was dystopian in the form of George Orwell and Aldous Huxley and sci-fi in the form of Jules Verne. Still, I missed out on discovering Philip K. Dick, Isaac Asimov, and Arthur C. Clarke at a young age. Their books could’ve been influential at the right time.

With regards to Dick and Clarke, they were indirectly responsible for two of my favorite films: “Blade Runner” and “2001: A Space Odyssey,” respectively.

From Dick’s book “Do Androids Dream of Electric Sheep?,” the basis for “Blade Runner”:

“You mean old books?”

“Stories written before space travel but about space travel.”

“How could there have been stories about space travel before –”

“The writers,” Pris said, “made it up.”

Elon Musk’s SpaceX has a substantial commercial advantage in today’s space race.

Jeff Bezos’s Blue Origin seems to have a more tourism spin on its ambitions since new space stations aren’t on the horizon anytime soon.

And Richard Branson’s Virgin Galactic ($SPCE) is nowhere to be found with its tiny $155 million market cap for its cute ticker symbol.

I had a chance to invest in SpaceX in August 2019, but I didn’t have a spare $250,000 to buy private shares. I should have found the cash.

A good question to ask now is, “Who is helping out behind these space companies?”

I only learned about Howmet Aerospace ($HWM) this month from The Motley Fool:

Howmet Aerospace is a leading manufacturer of essential aircraft components, positioning it prominently on the runway of a sector with blustery long-term tailwinds. It produces more than 90% of all structural and rotating aero engine components, developing over 90% of all aluminum alloys that have ever flown. Howmet’s 940 granted patents (and 215 pending) give it a competitive moat.

After decades of developing and building up expertise, Howmet is in the early stages of scaling up. It has delivered double-digit revenue growth in the past three years, with free cash flow and profitability growing even faster. The commercial and defense aerospace market is projected to grow at an 8% compound annual rate through the end of the decade, and Howmet’s bottom line should rise exponentially greater than that.

Howmet has a firm order book with an 8.5 year backlog for commercial aircraft and aero engines. The expanding middle class globally and increasing air travel — and admittedly some supply chain issues and other hiccups in the industry that slowed deliveries but are now improving — offer strong visibility for long-term growth.

Rich in experience and IP, Howmet is emerging as an efficient and profitable manufacturer with relatively low capital expenditure requirements. Its 21% operating margin and trailing-12-month profit margin nearing 15% make it a well-run business.

In the same way that Apple relies on Foxconn and Nvidia relies on Taiwan Semiconductor for manufacturing partnerships, respectively, Howmet could prove ever more helpful or crucial as space exploration continues to ramp up.

Here’s an AI-generated answer from Anthropic’s Claude:

Howmet Aerospace is a major supplier for both aerospace and space companies, primarily due to their specialization in engineering critical components and materials.

…

Some key products these space companies would source from Howmet include:

Investment cast turbine components for rocket engines

Titanium fasteners and structural components

Advanced nickel-based superalloys for high-temperature applications

Precision-engineered components for propulsion systems

Howmet’s capabilities in advanced materials and precision engineering make them particularly valuable for space applications where component failure is not an option and materials must perform under extreme conditions.

The stock price doubled last year, even after Jim Cramer’s positive comments on CNBC last January.

And the stock price over the past five years is up 435%.

I don’t own the stock, but I probably will soon.

Things are certainly looking up!