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Nanotechnology Investments

Nanotech Stocks are Poised for Growth

Written by Steve Christ
Posted August 24, 2010 at 3:46PM

Mr. McGuire: I just want to say one word to you — just one word.

Ben: Yes sir.

Mr. McGuire: Are you listening?

Ben: Yes I am.

Mr. McGuire: "Plastics."

Ben: Exactly how do you mean?

Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?

Ben: Yes I will.

Mr. McGuire: Shh! Enough said. That's a deal.

In the 1967 film The Graduate, it may have been the shapely legs of Mrs. Robinson that caught the eye of young Ben Braddock...

But it was Mr. McGuire's sage advice that piqued the interest of the investment world.

Cliché or not, old man McGuire was definitely on to something.

Plastics, after all, were still relatively new and hardly as ingrained and ordinary as they are today. In those days, products made of glass, metal, and wood still dominated manufacturing.

But as history would later prove, McGuire's advice was both prophetic and wise. Plastics, as he suggested, changed everything.

Since then, of course, investors everywhere have been looking for that same type of sage advice; hoping to find riches by staying ahead of the curve. And in the 80s and 90s, they managed to find it — with "computers" and then the "Internet."

But since those days, the markets have been all ears, hoping to come across the next big thing — the game changer that could be expressed in a single word.

In essence, they've all been left wondering Where have you gone, Mr. McGuire?

Just one word: Nanotech

My guess is that if Mr. McGuire were to offer his advice today, his one word wouldn't be "plastics"; it would be "nanotech."

Like plastics, computers, and the Internet before it, nanotechnology will change the world in ways that we can't even imagine now. That's how powerful the nano-world will become.

And like the paths of those earlier "big ideas," nanotech is just beginning to roil the surface — giving investors another chance to beat the crowd.

So what exactly is nanotech?

On the face of it, it is simple; but in actuality, it is complicated to the point of being breath-taking. In short, nanotechnology is the ability to create structures and materials at the atomic level, one molecule at a time.

That means that in the near future, we will be able to custom design structures literally from the ground up, molecule by molecule, creating a quantum leap forward in medicine, materials, electronics, food, and fuels — practically everything we know of.

Nanotechnology is gonna be big.

That's why U.S. corporations have invested an estimated $2.75 billion in nanotechnology R&D — 50 percent of which was spent by the electronics and information technology sector; 37 percent by the materials and manufacturing sector; 8 percent by the health care and life sciences sector; and 4 percent in the energy and environment sector.

What's more, over the past 10 years, venture capital (VC) investments in U.S. companies developing nanotechnology have totaled $5.03 billion — accounting for 86 percent of the worldwide VC investments in the new sector.

Then there's the $12 billion the U.S. government has chipped in over the last ten years with its National Nanotechnology Initiative (NNI)...

Just two words: Nanotechnology Investments

That type of massive spending, naturally, has already managed to find its way into the marketplace.

In fact here's a run-down of how the nanotech economy is already working to help boost GDP and deliver new and improved products to the market place.

They include advances in the following areas according to a recent government assessment delivered in March:

  • Energy/fuels/environment — Catalysts and catalytic processes that depend on specific nano-scale structures to steer chemical reactions contribute to a significant portion of the U.S. gross national product (GNP). The catalyst industry and those industries that rely on catalysis exploit this nanotechnology to provide a wide variety of products, such as liquid fuels and plastics, and to contribute to a cleaner environment, such as through the use of catalytic converters to remove pollutants from automobile exhaust. Additionally, materials for high-power, fast-charging batteries used in many cordless power tools incorporate advanced electrodes whose capabilities depend on deliberately-engineered nano-scale architectures.

  • Medicine — Several nanoparticulate formulations of conventional drugs are being used in the treatment of cancer and infectious disease. A number of nanotechnology-based imaging agents and therapeutics that target tumor cells and arterial plaques are in clinical trials. In addition, nanotechnology-based detectors form the core of a number of new diagnostic instruments that are better than previous generations of instruments at detecting minute quantities of important biomarkers of disease.

  • Materials — Carbon nanotubes are currently being incorporated into high-strength composites and woven into yarns to produce significantly lighter and more conductive wires and electrical harnesses.

  • Consumer products — Nano-scale materials and particles are being used increasingly as ingredients in cosmetics, sunscreens, and food products. The small sizes of the particles confer various properties, such as high sun-blocking power with translucency in sunscreens, stain resistance for fabrics, and self-cleaning properties and better color features for paints.

The National Science Foundation has predicted sales of nanotech-related products would reach $1 trillion by 2015 and provide at least 800,000 new jobs in the U.S. alone (to support that figure).

And with over 160,000 employees now working in the nanotechnology sector — and a 25% annual growth rate — those figures will likely become reality over the next five years.

All of which, of course, will create an environment of opportunity for both workers and investors alike in the near future and beyond — as plastics did so long ago.

Mr. McGuire, of course, would have seen it coming from a mile away...

In Part Two of this piece on Thursday, we'll take an even deeper look at nanotechnology and the story behind two companies utilizing it to build a better bottom line.

Your bargain-hunting analyst,

steve sig

Steve Christ
Editor, Wealth Daily

P.S. It may sound like we're beating the same drum over and over here, but it's true: Technology is still our ace in hole. That includes the biotech sector, where M&A activity has reached a fever pitch. In fact our research has led us to a radical biotech stock that could be one of the sector's biggest winners... To learn more, click here.


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