Buyer Beware on Wall Street: Three Investment Options for Quantum Computing from Andersen Capital Management
(Forbes) New shiny objects tend to attract a certain breed of investors and that’s not necessarily a bad thing writes Peter Andersen of Andersen Capital Management based in Boston. He explains, “This is great when the industries or inventions are uncomplicated, and don’t require advanced degrees to understand. But when the basic concepts of a product are beyond even analysts’ comprehensions, how can a private client expect to understand the concept?”
No new industry is more prominent yet incomprehensible than quantum computing. These computers will be super-fast and solve all kinds of problems heretofore considered unsolvable. Andersen believes, “This is a real technology with a demonstrated, scientific foundation and I am excited that the technology is very achievable.”
But he warns, “Unless you have a solid undergraduate and graduate background education in physics, you will never truly understand the basics.”
Is there still a way to proceed with learning about quantum computing, and possibly investing in the field?
Andersen offers three investment options:
Option One: Leave it to the experts. I don’t mean Wall Street analysts, but consider instead the companies that are well-known in other areas and have made serious commitments to building quantum computing divisions. Google (GOOG), Amazon (AMZN) and Honeywell (HON) are hard at work in the race to create practical quantum computers.
Option Two: Play the field. If you want to own almost all the public stocks out there that have anything to do with the development of quantum computing—hardware, software etc—then your best bet is to own the tiny Defiance Quantum ETF (QTUM). The fund tries to index a portfolio of companies that are mostly tied to the development of quantum computing and machine learning. It holds about 70 stocks.
Option Three: Buy single stocks that concentrate on quantum computing. This is the most aggressive option and requires the most work on your part. If you have a physics background you will have an advantage here. There are two approaches to engineering the computers. Look for companies that are developing room temperature quantum computers. The other approach requires a near-absolute zero (-460 degrees F) environment that I don’t think will scale to mass production. The highly speculative SPAC dMY Technology Group (DMYI) will merge with IonQ and will become the first publicly traded pure-play quantum computing company. IonQ is prototyping room temperature machines that show the most promise in my opinion. But remember this is the most risky way to gain exposure to the science.