Nanotech -- Old Rules for a New Science
As the earlier stories in this series on nanotechnology mentioned, finding an investment strategy around this emerging field is anything but straightforward.
To recap, nanotechnology isn't new, but it promises to become a nexus of innovation. It isn't an industry unto itself -- despite the growing crowd of companies labeling themselves as nanotech companies -- but the technology will affect nearly every industry. There are nanotech products on the market, but none to date are revolutionary enough to generate a pile of profits.
Between the actions in the stock market today and the inevitable economic growth that will be driven by nanotech lies an ocean of uncertainty. That may be good news for daytraders, but for more thoughtful, long-term investors it makes it harder to come up with a strategy.
Talk to investors and executives who have had their heads in nanotechnology for years and you'll hear the same old chestnuts of investment advice you get in any other area of the market: Spread your investments across diverse companies, large and small, and in different industries; know what you're investing in; don't put money in companies led by people you'd never invite to dinner or a ball game; check out the product and determine whether there's a market for it.Familiar advice, perhaps depressingly so for people looking for a new area in which to invest. The nanoscale may introduce radically different laws of science, but it doesn't change the rules of investing. "If you have full information on companies, you can do research on who's talking smack," says Warren Packard, a venture capitalist at Draper Fisher Jurvetson, which holds investments in private nanotech-oriented companies. "We use a framework that works anywhere," Packard says. "The most important thing to look at is the people who are there. Read their bios. Do they have accomplishments or an ambiguous past? Is there a customer need for what they're selling? Do they have anything more than intellectual property? Is it a big market? Are competitors breaking new ground?"
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV