Nanotechnology investing: the multi-decade roller coaster

As has been pointed out repeatedly here, the term nanotechnology is very broadly defined, and the various “nanotechnology indexes” that try to track nanotech stocks have a tough job, to put it mildly.

To complicate matters, nanotech watchers distinguish at least four, and maybe five, different generations of nano, from passive materials to highly advanced molecular nanosystems and atomically-precise manufacturing via productive nanosystems. Each of these has applications across many industries.

Further, nanotech commercial efforts tend to be either small startups or small fractions of industrial giants. It’s hard enough to track the former, but how do you track the latter properly in a stock index?

This all makes following “nanotechnology” stocks, as a group, a challenging and perhaps impossible task. We can expect multiple waves of excitement, disappointment, and eventual solid profitable achievement as the various generations of nanotech affect different industrial sectors. This will go on for decades as the generations of nanotech each arrive and then develop fully.

Keep this all in mind as you read Bloomberg News’ Nick Baker’s Around the Markets: Waiting for the next big thing. Some excerpts, relevant to the current dip in this very long roller coaster ride called nanotechnology:

“I’m scared of anybody with nano in their name,” said Kevin Landis, who manages investments at Firsthand Capital Management in California. “With any new wave of technology, there’s ample opportunity to invest in companies that don’t end up being the winner”…

Higher interest rates worldwide this year led investors to avoid riskier assets, including nanotechnology companies…

Buying the shares of publicly traded nanotechnology companies, on the other hand, “makes virtually no sense,” [Whitney] Tilson said. “By the time a company has gone public and that area has been established as hot, the valuations usually reflect the good news that could possibly happen”…

“You have the luxury to take your time,” Landis said. “There’s time before you have to leap.”

Not a cheerful article for nanotech companies trying to make an initial public offering. But just wait. —Christine

Leave a comment

    Your Cart
    Your cart is emptyReturn to Shop