QUANTUM COMPUTING

Peak of Inflated Expectations
         /\     ← All three stocks peaked here
        /  \        (IONQ $84, QBTS $47, RGTI $58)
       /          /           /        \    ← We are here: Trough of Disillusionment
    /          \      (IONQ $47, QBTS $21, RGTI $18)
   /              /               /                \___  Slope of Enlightenment (eventually)
/                     \___  Plateau of Productivity
Innovation Trigger

The critical lesson: Every major technology (internet, smartphones, AI) went through this exact pattern. The stocks that survive the trough eventually go much higher. But the trough can last 2-5 years, and many companies don’t survive it.

This is the most important section. Knowing when to sell is more important than knowing when to buy.

Rule 1: Trailing Stops

Set a stop-loss that moves UP as the stock rises, but never moves down.

Rule 2: Percentage-From-Peak Exits

Rule 3: Scale-Out Strategy

1. When up 50%: Sell 1/3 — take initial profit off the table
2. When up 100%: Sell another 1/3 — you’ve now recovered your original investment
3. Let the final 1/3 ride with a 25% trailing stop

This guarantees you never give back all your gains.

Rule 4: Position Sizing

The people who made life-changing money on Nvidia, Amazon, and Google were NOT the people who bought at the peak. They were the people who bought during the trough of disillusionment WITH A PLAN FOR WHEN TO SELL.

If You Don’t Own Any Yet

If you must enter now:

• IONQ: Small position (2-3% of portfolio). Set a 25% trailing stop immediately.
• QBTS: Tiny position (1-2% of portfolio). Wait for Investor Day in June if you can.
• RGTI: Avoid for now. Revenue is declining. Wait for Lya chip news.

If You Already Own Them

Government Spending

• $65B+ committed globally to quantum R&D
• US: $625M renewal for 5 national quantum research centers + $1B DoD request
• UK: £2.5B National Quantum Strategy through 2034
• China: Estimated $15B+ (military + civilian)
• India: $1B+ National Quantum Mission

Key Breakthroughs

• Google Willow (Dec 2024): Proved quantum error correction works. Solved a problem in 5 minutes that would take supercomputers 10 septillion years
• IBM Kukura: Latest processor pushing toward 100,000+ qubit systems by 2033
• Caltech/Oratomic: New error correction method requiring fewer physical qubits per virtual qubit

Market Projections

• Current market: ~$2-3B (mostly government/R&D spend)
• 2030 estimate: $15-20B
• 2040 estimate: $450-850B

Key Risks

1. Timeline risk: Practical quantum computing is still 5-15 years away for most applications
2. Big Tech competition: Google, IBM, Microsoft have unlimited resources
3. Dilution: All three stocks diluted 30-70% through equity raises
4. Valuation: P/S ratios of 70-830x price in decades of growth
5. Classical AI: Nvidia GPUs may solve many "quantum" problems classically
6. Regulation: Quantum tech increasingly subject to national security export controls

Quantum computing is real. The technology works. Government and commercial investment is massive and growing. The long-term thesis is sound.

But the stocks are in the trough after a massive hype peak. The difference between making money and losing it all comes down to:

1. Position sizing — never more than 5-10% of your portfolio in quantum
2. Trailing stops — set them BEFORE you buy, not after
3. Scale-out selling — take profits in stages, don’t go all-or-nothing
4. Patience — the trough can last 2-5 years before the next breakout