Best way to capitalize on app/cloud computing bubble?

[PCMarine]

I'm sure many of you have experience in the technology sector, so I'm curious as to what everyone's opinions are on investing in developers/tech start ups.

Since mobile/web apps and cloud computing solutions are garnering massive interest from consumers, private investors, and retail investors (for those companies that go public), I can't help but think of various ways I can get a piece of the action.

Is there any avenue to personally invest in startups in exchange for equity or a percentage of sales? Due to the low barriers to entry, for instance, couldn't I spread $100k between 5-10 developers on the chance that one or several will really take off? This isn't a "get rich quick" ploy, but with the proper due diligence I think there is some promise.

 

[Newbian]

When in doubt invest in porn.

 

[HardcoreRobot]

for a second i thought you were ricemarine

 

[Broheim]

doesn't really matter what the web-app does, just plaster it with the word cloud and watch the sheep throw money at you... seriously cloud is the new glossy

 

[joesmoke]

given you think its a bubble wouldnt the prudent investment be to short the companies most likely to be hit hardest?

 

[PCMarine]

given you think its a bubble wouldnt the prudent investment be to short the companies most likely to be hit hardest?

Well I think we've got a few more years of explosive growth in the sector, then a correction is probably due. In the meantime I'd like to take advantage.

 

[rudeguy]

Well I think we've got a few more years of explosive growth in the sector, then a correction is probably due. In the meantime I'd like to take advantage.

so start a cloud based music service
or a cloud based movie service
maybe tv shows
how about a calendar
maybe an automatic backup service that stores to the cloud
or how about your own personal cloud that you can store whatever files you would like to?

 

[spidey07]

Makers of 10 gig ethernet equipment and memory manufacturers. It's all highly memory and bandwidth intensive.

 

[Farmer]

Well I think we've got a few more years of explosive growth in the sector, then a correction is probably due. In the meantime I'd like to take advantage.

So go long now, and short whenever you think it's apexed. It's not good enough to identifiy the bubble. The hard part about a bubble is determining where the turns, that's where you make all your money or lose all of it.

Besides, as of right now, many of these cloud startups are privately held private VC-funded unless you can identify public entities invested in these startups, which is normally not public information. You can't invest in it. If you correctly identify this as a bubble, their IPOs are going to be vastly overvalued. Unless you assume high risk (i.e., high leverage) there will not be as much margin.

So if you want to make money right now, either start your own cloud startup or go join one. For the former, maybe you will be massively overvalued and gobbled up by a Google or MS . For the latter, you will get stock options with strike prices pennies on the dollar, which you sell.