The markets have tried to squish higher …

The markets have tried to squish higher today, but it’s been soggy underneath them.  That said, we’ve had a pretty big intraday swing on our own sheet’s P&L, though we are also still in the red on the day.  Here’s a few thoughts on the IPO Market and Chinese social networking stock, Renren, up 40% in its trading debut:

Run the other way from Renren.  I mean, don’t get me me wrong, Renren is awesome and is going to be a huge success with hundreds of millions of users in China alone in the next decade. But I wouldn’t touch the stock with a ten foot pole. I don’t trust Chinese company disclosures and numbers as a general rule, and Renren has already had to correct numbers in their IPO prospectus and has had a board member resign already because of accounting issues at another company where he was on the board.

That said, the real story here is that Renren and all these other tech companies are coming public, raising huge money and are just starting to spend that huge money. The company’s one of dozens of tech/web/app/smartphone/gaming companies coming public in the US over the next couple months, part of the biggest IPO binge on Wall Street since the market topped out in 2007.

All these companies are raising billions of dollars in the public markets and hundreds of other tech/web/app/smartphone/gaming companies are raising billions of dollars in the private markets. Some of those, like Facebook, will be worth tens of billions or even a hundred billion dollars and will make a lot of people who got in last year or earlier, very, very rich. But rather than worry about trying to catch the right IPO at the right valuation for the right tech/web/app/smartphone/gaming stock, here’s the better way to play Renren’s IPO –

Buy the suppliers into the tech/web/app/smartphone/gaming marketplace! All those billions of dollars are being raised to be spent, and the guy supplying the shovels to the tech/web/app/smartphone/gaming gold rush are going to be the biggest winners…as usual. My favorite suppliers to these companies include:

• Cypress Semiconductors, and Riverbed. Cypress is making all kinds of new chips and components that combine all kinds of feature sets that enable tablets and smartphones to work and run apps for websites and games on websites like Renren.
• Riverbed enables companies like Renren to make their applications, games and websites run faster, more efficient and better. And I can tell you from many years of producing content for websites, applications and games that you have to constantly strive to make them run faster, more efficient and better. And Riverbed sits inside the company’s networks, underneath the website but above the Internet itself, and makes the world’s best websites run better.

I’ve been a buyer of both Riverbed and Cypress for a long while.  Because they are poised to boom from all this money flooding into the companies buying their wares.

Forget about trying to catch the high-profile IPOs that everybody is talking about. There’s no money for the trader or individual investor in them. The place to make money on the tech/web/app/smartphone/gaming IPO binge is by buying the companies making the products that the companies coming public will spend their money on.

The only guy we remember from the 1849 gold rush is Levi Strauss, you know?