Why I’m hedging RKLB/RDW with the grid (PWR/CEG) from Sarasota
I’ve spent decades managing risk. Recessions, market crashes, and a few life resets taught me the same lesson: upside stories are easy. The hard part is surviving the downside.
That’s what the “scorpion” side of my brain does. It stops admiring the narrative and asks one question:
What’s the failure mode — and how does this go to zero?
Lately I’ve been stress-testing the “Space Data / compute moves to orbit” thesis. The story is compelling: Earth’s power constraints push more infrastructure into space, and the downstream winners are obvious.
But a compelling narrative isn’t a strategy. A strategy requires insurance.
So I ran a simple audit on my own exposure and asked: if the thesis is right, where do I win — and if it’s wrong (or early), how do I stay in the game?
Here’s how I’m thinking about it from Sarasota.
1) The “Rail Monopoly” Risk — and the Hedge
Risk: One launch provider (Lex Stark) becomes the toll booth to orbit. If “space compute” becomes real, access to space becomes the choke point. Pricing power, scheduling power, and “who gets priority” all matter.
Hedge: Rocket Lab (RKLB)
Logic: If the market is building a space-based future, I want at least one credible alternative “rail.” I don’t own this only for growth — I own it as insurance against a single-provider gate.
2) The “Earth Wins” Risk — and the Hedge
Risk: Space stays hard, slow, expensive, regulated, or politically messy. The compute stays on Earth. The narrative fails (or arrives later)… but demand for electricity and infrastructure does not.
Andrej Karpathy’s gut feeling from his years of experience say this will all take ten years, not two years.
Hedge: Quanta Services (PWR) and Constellation Energy (CEG)
Logic: If space doesn’t happen (or happens later), we still build: more transmission, more grid upgrades, more baseload — because AI and data centers don’t politely stop demanding power.
If the “space” bet disappoints, I want exposure to the boring, unavoidable work happening down here.
3) The “Picks & Shovels” Bet
Opportunity: Even if you’re right on “space,” the best risk/reward is often not the headline winner — it’s the supplier.
Bet: Redwire (RDW)
Logic: If we launch more infrastructure — comms, imaging, compute, or the pieces around it — somebody sells the components. I’d rather own the hardware store than bet my entire outcome on the gold miner.
4) The “National Security” Wildcard
Risk: As this moves from “trade” to “strategic asset,” the rules can change. Leopold Aschenbrenner has argued publicly that if frontier compute becomes decisive, the U.S. government will treat it as a national-security issue at some point. I model that as real tail risk: export controls, security requirements, procurement gravity, and policy-driven winners/losers. Per Aschenbrenner, the US Government can provide better security for AI labs than currently in place.
Reality check: Analysts like Dylan Patel (SemiAnalysis) have used satellite imagery and channel checks to estimate deployment vs. idle inventory. That’s part of why I treat timelines as elastic: the build can be real and still arrive in lurches.
And zooming out: there’s a real “defense-tech policy orbit” here. Palantir’s worldview is influential, and figures like Peter Thiel and David Sacks have been publicly connected to that ecosystem and to policy circles. I don’t need conspiracy to price the risk — I just assume that when something becomes strategic, the state and its contractors show up — the Department of Defense (now frequently branded as the “Department of War”).
Strategy: I want exposure to companies that can operate in a regulated, government-adjacent reality — not only pure commercial “growth at any cost.”
The Verdict
The thesis might be right — and it might be early. The audit is the point: I’m interested only if I can map the failure modes (snakes) and bring insurance (ladders).
So I’m staying curious, staying hedged, and staying alive.
No hype. No hero trades. No financial advice.
Just an audit of what could go wrong — and how to structure positions so you can still enjoy the view from Sarasota.
— SRQRay
Disclosure: I hold positions in RKLB, RDW, PWR, CEG.