The Market Is in a Bubble. Why I’m Focusing on Quantum Computing Stocks Now.

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We are in a bubble. 

That doesn’t mean it will pop tomorrow, next month, or even next year. But it does mean that it’s time to get prepared. 

That’s why I created what I’m calling my “Bubble ETF Focus List.” It contains the popular stock averages like the SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ) and Dow Industrials SPDR (DIA), but mainly for comparison purposes. The real stars of this new watchlist are ETFs that represent richly valued groups of stocks. Semiconductors, memory stocks, space stocks, and of course the Magnificent Seven.

There’s a lot to say about each of these, but I want to zero in on the Wisdomtree Quantum Computing Fund (WQTM). It is a more-than-$300-million ETF that, as you can see, has the highest price-earnings ratio on the list, at nearly 82x earnings. 

Quantum computing holds tremendous long-term technological promise, but at a multiple like that, investors are paying for years of flawless commercial growth today. 

While the fund holds cash-flowing tech giants like International Business Machines (IBM) and Alphabet (GOOG) (GOOGL) to stabilize the balance sheet, its pure-play quantum names carry high cash burn rates and speculative valuations. When macro liquidity tightens, funds carrying 80x multiples are usually the first to experience steep valuation resets.