• Will satellite internet lead to the death of 5G?
  • How to charge an EV if we live in an apartment…
  • “Thank you for guiding us and making us feel safe…”

Dear Reader,

Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology. Today, I’ll do my best to answer them.

If you have a question you’d like answered next week, be sure you submit it right here.

Is satellite internet making 5G redundant?

Let’s begin with a question on 5G vs. Starlink and Project Kuiper…

Hello, I hope the team is well. With the satellites being positioned around the earth by Amazon and Elon Musk among others no doubt, whereby they will offer a latency-free internet connection regardless of where you are (more or less), how will this impact the likes of 5G component providers of the infrastructure being installed and developed around the world at the moment?

My concern is that this infrastructure will be made redundant due to satellite internet services. Hence a potential high risk to investing in 5G component companies.

Or am I getting my wires crossed (no pun intended)? Please provide an opinion on this concern. Best regards,

– Neil E.

Hi, Neil, and thanks for sending in your question. This is definitely a question I hear a lot.

The developments being led by SpaceX for satellite internet have been fantastic to see, and there are others trying to catch up. I’ve covered Musk’s Starlink many times in The Bleeding Edge, as well as Amazon’s Project Kuiper.

Each of these programs will put thousands of satellites into orbit. Amazon is targeting areas where it has a presence with its e-commerce business. Starlink, on the other hand, intends to offer universal internet access on a global basis, but with a service target of areas that are underserved by wired broadband networks.

I’m excited to see both of these services because they will provide better internet access to those living in rural areas who might only have internet over a phone line. And this is the key point.

These satellite internet services are targeted at these underserved areas, not areas that already have fiber to the home, CATV internet, or even a wireless broadband internet service.

In simple terms, satellite internet technology has downsides. It won’t be providing 300 or 500 megabits per second (Mbps) speeds that tend to be common today over CATV internet services. 

It also won’t match the speeds capable over a 5G wireless network, which can exceed 1 gigabit per second (Gbps). And they are not latency-free… quite the opposite. Because the signals are to/from space, there is a notable latency that is typically at least 10 times slower than what we will experience over a 5G network.

For example, most Starlink users can expect speeds between 50 Mbps and 250 Mbps, with latency between 20 and 40 milliseconds. Starlink is indicating that its speeds will improve as its space-based network is upgraded.

But, and this is important, the performance of the network declines as a larger number of users use satellite internet over the same satellite. Put another way, the more people that sign up for Starlink, the worse the average performance will be.

Amazon’s prototype has reported speeds up to 400 Mbps, but it’s too early to say for sure what its final performance will be. I expect it will be on par with what Starlink will deliver, as the technology is very similar.

Satellite-based internet services just don’t scale well. Once they have too many users accessing the network through the same satellite, the performance significantly drops.

So even if the stated speed might be 300 Mbps, in reality, the “normal” speeds are dramatically lower. And a satellite-based internet company cannot guarantee high-speed network performance.

As a result, satellite internet services often resort to data caps, which limit users to a certain number of gigabits of data a month. And the caps tend not to be that high. That poses a problem for anyone who enjoys streaming lots of videos…

And the final downside to satellite internet is cost. I’ve shared before that I’ve put my name down on Starlink’s service for when it becomes available near me so I can test it out.

But the satellite and hardware alone cost $599 now. And the service is $110 per month. That’s not cheap. It’s much more expensive than a land-based internet service provider (ISP).

Ultimately, these services will primarily serve people who live in rural areas without access to a decent ISP right now. If these projects are successful, they will give people in rural areas two great options for internet access.

As for everyone else, many people will see an upgrade to their broadband internet services from our current infrastructure. Either fiber to the home or a fixed 5G wireless broadband service is capable of delivering 1 Gbps speeds at near-zero latency.

That’s a long way to say that there is no risk at all posed by these satellite internet services with regards to investing in 5G related technology companies. Both 5G and satellite internet will co-exist in the market and serve very different end customers. 

Why buy an EV if we don’t have a charger?

Next, a reader wants to know more about how to charge an electric vehicle (EV)…

Jeff, what have you heard about people in large condo or apartment complexes who park their cars 20 to maybe 50 ft. away from their unit? Why will they buy an EV if no charger is available? 50 units and all want to charge their cars overnight. Any news or thoughts? Thank you.

– Leonard K.

Hi, Leonard – I’m glad you wrote in with this question as it speaks to an interesting dynamic in society right now. It’s not entirely rational either, which I think is the point that you were questioning.

Today, EVs are just under 1% of all cars sold in the U.S., but sales have been increasing rapidly. In Q1 this year, customers bought nearly 173,600 EVs in the U.S. That’s a year-over-year increase of 76%. And estimates state that roughly 80% of all cars sold worldwide will be EVs by 2050.

Some people prefer EVs due to beliefs about them having a “cleaner” environmental impact than traditional cars. (I’ve written before how this is not quite as straightforward as many people think.)

Others find them cheaper to “fill up” – especially given the high cost of gas these days.

Yet there are practical concerns for EV owners during the early stages of this trend. One of the most critical is where we charge our car.

It may seem strange to purchase an EV if we don’t own our own home where we can install a charging station, yet the world is beginning to accommodate renters as well.

More and more apartments and condos are adding EV chargers for their residents. And if ours doesn’t, we can always ask our landlord to install one. While some may choose not to, having a charger can potentially increase the attractiveness of their units in the future.

Alternatively, we’re seeing more charging stations appear around the country.

Some people may opt to run errands or shop while their car changes. This merely takes a little forethought and planning.

Another option is to use chargers at our places of work. Offices are beginning to install EV charging stations for their employees. That way, we can charge our cars during working hours and drive home with a full battery.

None of these options are as convenient as just plugging in at home or our apartment building, but they are manageable. So even if we don’t have a charger directly at our home, many people are making it work.

And as the trend grows, we’ll see more and more businesses and residences begin to build infrastructure to support EVs.

The reality is that, in the situation that you described when charging is inconvenient, those buyers simply want to feel like they are doing something “green” and they want to show others that they are doing it.

If we were to ask those buyers what the source of electricity production is that they used to fuel their EV, very few would have an answer to that question…

60% of electricity is produced from fossil fuels (dirty) in the U.S., and another 20% is produced from nuclear fission (which produces radioactive waste). Another large chunk is hydroelectric, which damages our fragile freshwater ecosystems.

That’s what fills an EV. Depending on where we live, sometimes that number is 100% fossil fuels.

The cost of a comparable electric vehicle is still not on par with an internal combustion engine vehicle. EVs are manufactured with electricity generated from fossil fuels. And while the cost to “fill” the batteries is less than the gas tank, in the absence of government subsidies, there isn’t really an advantage in the total cost of ownership.

With all that said, I like EVs. I’d much prefer that they were manufactured with clean energy, and I see no point whatsoever driving them if they are fueled with electricity produced from fossil fuels.

My solution is to replace my roof with solar tiles, and install large battery storage units so that I can fuel an EV with electricity generated from the sun. At least that way my “fuel” will be clean. 

And after I’ve driven the car about 50,000 miles, I will have offset the fossil fuels used to manufacture the car. After that, the use of the EV will be 100% clean energy.

We need to keep a level head…

Let’s conclude with a comment about a recent update to subscribers…

Dear Jeff, the other day you made a market update video from your home at 5 a.m. It was obvious that you too were under great pressure from the falling markets. Is it any wonder we trust you, for that video clearly showed you to be a decent honest caring person?

Thank you for guiding us and making us feel safe. I have been investing with others for a long time, but you are different. You really care. Best wishes,

– Darby M.

Hi, Darby, and thank you for the kind words.

Market turbulence, like we’ve experienced recently, understandably shakes investors’ confidence. When we see stocks in our portfolio falling, it’s natural for us to feel uneasy or stressed.

The pain can feel unbearable at times, especially when it seems like there is no safe haven. In the first four months of the year, the entire market has tumbled, including crypto.

The market even punished “stable” consumer staples companies like Walmart and Target, with each falling sharply following their earnings last month. And neither gold nor bonds are returning enough to balance out the losses.

Yet strong emotions can lead us to make decisions we later regret – such as selling at or near a market bottom.

That’s why I try my best to help my subscribers stay rational in these moments. And it’s why I often reach out through mediums like video – I know how much it can help to see another person on the other end of the line.

When I was in my 20’s and investing, I learned some very hard lessons. I didn’t have a mentor or a guide, and made some big mistakes. At the time, those losses amounted to a large chunk of everything I had. 

And most of those losses came as a result of “having my face ripped off” by Wall Street, or by companies that engaged in fraudulent practices. Those lessons – while painful – were invaluable, and I don’t want my subscribers to learn them the hard way like I did. 

Yes, I’m here to help my readers make money and grow their wealth. I’m also here to hopefully help my subscribers learn from the lessons that I’ve already paid for, so that they can avoid the mistakes that I made early on entirely.

As committed investors, those of us who want to grow our wealth over time and put in the effort, sometimes that means sitting through these kinds of moments. The markets don’t always “behave” the way that we’d like them to, but these periods always pass.

And we are already seeing this with some of our most recent market action over the last couple of weeks.

Markets have begun to turn back up and stabilize. Buyers are beginning to scoop up deals on the undervalued companies that have been irrationally sold off. And I believe that we’re through the worst of this year.

If you didn’t have a chance to read The Bleeding Edge on Tuesday and Thursday this week, please make sure that you do so. I provided some interesting reference points for where we are in the current cycle and why we have reason to be optimistic.

That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.

Summer is here (at least in the northern hemisphere)! Have a great weekend.

Regards,

Jeff Brown
Editor, The Bleeding Edge

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