Let me say first that picking APM winners is not a slam-dunk. We are at a stage in nanotech that can be very frustrating if you forget the big picture. We are tantalizingly close to seeing a swarm of startups come out with world-changing products. These products will provide investment opportunities unlike anything ever seen before. The problem, though, is that sitting on the edge of your seat can be difficult — you can jump the gun. Worse, you can lose patience and give up.

Don’t do it. The reason is that APM will not only create new opportunities, it will destroy many existing industries. Just as light bulbs and AC electrical power created huge opportunities, they razed whole sectors. Lucrative businesses crumbled, taking their investors’ fortunes with them.

Furthermore, it will happen sooner than most expect, and it will happen very quickly. Tracking APM and other transformational markets is not just a matter of making money. It is a matter of not losing money. It could even be a matter of financial survival. I promise you that many people who think they have diversified safely will find their former wealth in new hands. My goal is to make sure that you don’t wake up one morning to find that your portfolio consists of buggy whips and chemical-based photographic film.

The irony of nanotech is that we have a pretty good idea about some of the important ways APM will change our lives. There’s a surprising amount of consensus on the big vision. The intermediary steps challenge us.

The ability to use individual molecules to manufacture machines and materials will eventually make, for example, today’s supercomputers cheap and small enough to carry in your pocket. That doesn’t mean, though, that you will need one. Wireless speeds will skyrocket and we’ll all own multiple devices connected to powerful external processors and free unlimited storage.

This is not a risky prediction, because it already exists in rudimentary form. Most people don’t know it, but the equivalent of free online storage has been around for some time. Tools exist now that allow you to easily use online mail accounts as remote storage devices. Yahoo mail accounts have no limits on storage. Google’s Gmail apparently still does — but the limits are high and it’s easy to set up multiple accounts. Google has leaked plans to offer free online storage anyway.

One of the most compelling predictions about the future of nanotechnology is, in fact, very similar to the Star Trek replicator. Researchers say that, eventually, we will have desktop APM devices. With downloaded software and cheap basic raw materials in cartridges, you will be able to “print out” everything from electronics to a new suit.

These predictions may sound like science fiction, but that was what people thought about Star Trek’s personal communicators not that long ago. Today, common cell phones are smaller than the devices used on the television show. Moreover, cell phones can stream video, give navigational information and do other things Star Trek’s creators didn’t think of.

The danger in talking about nanotech in terms of science fiction, however, is that it tends to make people think of APM as something that will happen in the future. In fact, it’s happening now, and the rate of scientific progress is accelerating exponentially.

An Emerging Nanotech Materials Star

As I said earlier, we are at an uncomfortable stage right now in APM. We see the huge winners on the horizon. Closer in, we have a number of extremely promising players. We know some of them are going to use the expertise they’ve built to take advantage of the transformation opportunities that are just arriving.

For that reason, I believe it is time to start picking up the rising stars. I’m after companies that show excellence in management as well as its decisions regarding emerging markets. I’m looking for companies with substantial research funding, proven research scientists and a management team willing to walk barefoot on glass if necessary. I want undervalued companies able to survive and ride the flood of nanotech opportunities that will wash away skeptics in the next few years. Ideally, this company will not have yet landed the big contracts that drive up its stock prices, but can make its case to a cold-eyed analyst.

As I see it, one nanotech company stands out right now for this buy-and-hold strategy. It’s a company that I’ve told my Emerging Capital Report readers about already, and it’s one that there’s still time to act on. This is a scrappy, but very talented company. It could very well succeed big in this early and unpredictable nanotech market.

For transformative profits,

Patrick Cox
March 25, 2008

Nanotech Breakthrough Will Grow Millionaires Like Weeds was originally featured in the Penny Sleuth.