Quantum computing: how to invest in something that does not work yet
When the timeline is unknowable, position size is the only control you have. Treat it as venture capital, and size it like venture capital.
Take a speculative bet deliberately, rather than accidentally.
How Quantum computing: how to invest in something that does not work yet works, in one picture
The same argument as the text, as a chain. Each step is what makes the next one possible.
One investment is the fund
Most go to zero and that is not a failure of selection, it is the shape of the asset class. It is why a venture investor has no use for a company that will merely do quite well.
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Be honest that this is venture capital in a listed wrapper
Most of these companies have negligible revenue and enormous losses, and their value rests entirely on a technology working at a scale it has not yet reached. That is a venture bet. The fact that it has a ticker does not make it a different kind of thing.
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Which means the power law applies
In venture, most bets return nothing and one returns everything. That is not a failure of selection, it is the shape of the asset class. If you buy one quantum company, you are drawing one card from that distribution, and the odds are it is a blank.
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So the only real decision is size
You cannot forecast the timeline. Nobody can. What you can control is what happens to your portfolio if this goes to zero. If the answer is 'catastrophe', the position is too big regardless of how good the idea is.
The most dangerous position you will ever hold is the one you are most certain about.
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And watch out for the incumbents
The largest technology companies are also working on this, funded from enormous existing cash flows. A pure-play's advantage is focus; its disadvantage is that it must raise money to survive, which means dilution, which means your slice shrinks every time the science takes longer than hoped.
You know exactly what a total loss on this position does to your portfolio, and you can live with it.
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When the timeline is unknowable, position size is the only control you have. Treat it as venture capital, and size it like venture capital.
Every one shows its exact method, and the circumstances in which it is wrong. Free, and no account to look.