3D Printing Must Create Its Next Big Wave

NEW YORK (TheStreet) -- Many of the current 3D printing stocks have seen wild swings but it's a matter of time before the technology connects with its perfect wave. I admit I completely missed the first phase of 3D printing craze. It's not for lack of awareness of its tremendous potential. Quite the opposite, actually, I was too far ahead of the craze.

I first learned of Stratasys  (SSYS) in 1999 and was instantly excited. They had a 3D printer that printed plastic objects from digital models (yes, way back then). It was based on rapid prototyping technology they bought from IBM (IBM) -- just another golden egg IBM casually tossed away. This incredible technology struck me as fantastic, with so much potential, too. We could only imagine the benefits this held for life, industry and investors.

Unfortunately, after enthusiastically pitching this great discovery to everyone I knew I got nothing but disappointment. I was so disheartened I didn't even buy the stock.

That was 15 years ago. Since then, I've taken a number of baths. I worried a lot about girls and what had happened to my bike. (Apologies to the great author Douglas Adams, may he enjoy the scenery in The Restaurant at the End of the Universe.) Then the 3D printing rage hit like a tsunami. I was hysterical. Rapid prototyping, huh? I've seen that movie before. 

Hence lies the biggest investment lesson I've learned many times over, and am still learning: Truth is less important than perception of it.

But let's face it, the first phase of 3D printing craze was mostly laughable, not unlike the 1990's dot-com bubble. A few items included a toy that squeezes out plastic noodles, printed hamburgers, travel with no luggage, along with CAD files for toothbrush and underwear. That's cool, dude, but let's try to be serious?

I missed the first 3D printing salvo but watched its subsequent burst with great moral satisfaction. I'm still a huge believer in 3D printing after 15 years, baths and all. And I want to make sure not to miss the next wave.

We've already established that 3D printing's future lies not in plastic noodle makers and hamburger printers. The first wave offered excitement about the concept with wild ideas abound cresting the waves. There's nothing wrong with this. But the next wave will demand the beef. Where are the investor money and the profits for 3D printing?

I see personalized production as the wind beneath the waves. Medical application is an obvious candidate. Are printed dentures and kidneys really that far off? Certain types of consumer products such as eyeglasses and frames, or contacts and other protective gear that would suit one person but are adaptable from the greater technology could spur high tech uses.

Prototyping and hobbies are definitely a market. Those applications are important to generating interest, awareness and excitement. But these niche markets are too small to matter in the financial sense.

Talk of ending traditional manufacturing should have ended with 3D printing's first phase. Except for high-end components that are impossible or very difficult to manufacture by traditional means -- for instance high-end airplanes and parts -- mass manufacturing is here to stay. 3D printing will be a significant contributor to U.S. economy, but it will not revive our manufacturing industry.

All current 3D printing players (Stratasys, 3D Systems (DDD), ExOne (XONE), Voxeljet (VJET), to name a few) are actively into personalized production, of course. Hopefully there will be some bigger players coming into this space, via M&A.

Organovo  (ONVO) is particularly intriguing because of its focus on medical and biological printing. On the software side, e.g., Autodesk  (ADSK) will also experience significant changes and development.

The fledgling 3D printing industry just experienced its first acceptance and hype. It may take a while to consolidate, regroup and refocus before taking off on solid footing. Many of the stocks here have seen wild swings and will probably continue doing so. Some names will no doubt disappear over time, either through merger or bankruptcy. But long-term investors will be well served by patiently accumulating a position in this field. 3D printing is not a technology you should wait 15 more years to consider for your portfolio.

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At the time of publication the author held no positions in any of the stocks mentioned. 
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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