The Nanotech Potion: The Cure for the Internet Bubble Blues

We all remember when the Internet bubble burst. If not, hereâ''s a quick reminder. Internet-related companies that had billion-dollar valuations on the stock market based on virtually no revenues started to smack up against reality in March of 2000, and then became a complete mess for investors and the general economy by 2001.

This was hard on investors and the companies, many of which closed their doors and others that are still trying to recover.

But perhaps it was hardest on the pundit community, a collection of investment tip gurus, Internet industry magazines and other assorted peddlers of so-called wisdom on where the real money could be made on the Internet.

But 2001 was a fortuitous year for the Internet economy to come crashing down because it coincided with the creation of the National Nanotechnology Initiative and talk of a $1 trillion market by 2015.

To be sure investors started to see sugar-plum fairies dancing in their heads with the prospect of somewhere to make their next million, but investors are a wary lotâ''itâ''s money after all.

The real group that took off with this idea of nanotech investing was the pundit community, still reeling from the loss of the best cash cow they ever had. Only this time they came equipped with a new name and a whole new vocabulary. â''Revolutionaryâ'' and â''a new industrial revolutionâ'' and a whole lexicon of hyperbole that would get those investors just afraid and greedy enough to give it a shot.

This community from small to large even went so far as to establish â''nanotechnology indexesâ'' (Merrill Lynch Nanotechnology Index, PowerShares Lux Nanotech, Global Crown Capital Nanotechnology Index, Small Technology Index), which present a weird assortment of small companies with no revenues to industrial leaders from other markets, like Toyota, as representing the "nanotechnology industry".

But alas, there has been no quick buck to be made in nanotechnology (it hasnâ''t even enjoyed the bubble of the Internet with its accompanying huge IPOs). Just yesterday I received a bitter e-mail (the contents can be found on the senderâ''s blog) outlining how disappointing nanotech investing has been, accompanied with claims that this is what they warned against all along despite authoring a book prophetically entitled "Nanotech Fortunes".

No, investing in nanotech has been an unhappy game: withdrawn IPOs, publicly traded â''high flyersâ'' suddenly losing 80% of their market value, and private companies tied up in usually fruitless quests to find financing.

Of course, the companies making stuff with nanotech have chugged along quite nicely. But they were doing that before the term â''nanotechâ'' came along, you can include most of the worldâ''s large chemical companies on that list.

The big disappointment from all of this has been for the pundit community. But they are resilient and flexible lot. They just take on a new incarnation: CleanTech investing, or whatever may be the idea du jour.


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