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What's the next big bubble?

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servicefly

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Sep 20, 2008
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How to invest in a forming bubble? 1st understand that if you intent solely to get into a forming bubble to make money, you will fail. I.E. mortgage brokers in the housing bubble. 2nd, lets take the Alternative medicine bubble into account to examine possibilities for investment.

If you have friends with a passion for their product or service which falls in the Alternative Medicine category, then simply offer to invest while they are small potatoes. Don't invest anything you can't afford. To really invest in a startup you must understand a few things; profit & Loss statements, break even points, burn rate and marketing strategies.


  • A good startup has a mutually agreed plan to grow in the same direction by management.
  • They have a business plan, no matter how good or bad it may look to you.
  • They have a marketing plan.
  • Management understands how to generate a profit & Loss statement with projections.
  • An executive summary has been drafted.
  • Management understands their Break Even Point & Estimated Burn Rate if investment capital exists.
  • A strategy has already been drafted to get their customers before creating any overhead, or spending more than $1,000.
Why the above characteristics? If you understand the above, you can leverage your skills and experience above as investment into their new startup. Bringing the above elements to a startup is usually worth more than money, or you can simply invest in a startup that already has these elements (all of them).

Finally, if your new startup friends are conducting any kind of Regulation D because they have investors expecting this and they say you don't qualify as an Accredited Investor by government definition, they are right. Their is a loophole however; tell them you are a Sophisticated investor (because of your knowledge of the above elements) and their is 35 investment slots available for Sophisticated Investors (by government definition) for any Regulation D.

Another way is to become a middle man for any alternative health care product. Become a new startup's distribution line.

Another way is to invent technology or a product and create an infomercial.
 

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andviv

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1st understand that if you intent solely to get into a forming bubble to make money, you will fail. I.E. mortgage brokers in the housing bubble.

well, tough one... my friend rode that wave... opened his brokerage and sold way before the bubble popped. He probably left a few grands on the table by selling six months early, but now he looks like a genius and his problem is where to put his cash. The problem with bubbles, in my ignorant opinion, is to know when to get out.

For the rest of your post, rep++
very solid advice.
 

servicefly

Bronze Contributor
Read Millionaire Fastlane
Sep 20, 2008
254
116
59
California (Southern)
1st understand that if you intent solely to get into a forming bubble to make money, you will fail. I.E. mortgage brokers in the housing bubble.

Allow me to clarify this statement. You will fail because even if you recognize a situation and avoid the bubble burst, this doesn't mean you have a business with which you are passionate about. You will lose money eventually. If you happen to understand all of this going in, then you are part of the 3% exception in every rule.

my friend rode that wave... opened his brokerage and sold way before the bubble popped. He probably left a few grands on the table by selling six months early, but now he looks like a genius and his problem is where to put his cash. The problem with bubbles, in my ignorant opinion, is to know when to get out.

Your friend is having trouble realizing where to put his money. He might lose most or all of it in this pursuit unless he seeks what he is passionate about; therefore, the best advice he could receive would be for him to invest in where his passion lies.
 

andviv

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Allow me to clarify this statement. You will fail because even if you recognize a situation and avoid the bubble burst, this doesn't mean you have a business with which you are passionate about. You will lose money eventually. If you happen to understand all of this going in, then you are part of the 3% exception in every rule.

Your friend is having trouble realizing where to put his money. He might lose most or all of it in this pursuit unless he seeks what he is passionate about; therefore, the best advice he could receive would be for him to invest in where his passion lies.

My friend's passion is "to make money and to spend money enjoying life" (his words).
What would you recommend to a guy like that?
 

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