The Great Nanotech Stock Crash of 2006

Bloomberg has a nice piece on the crashing nanotech indices, as regular readers will know we are rather wary of.

Almost like the index, the report is littered with the usual off the cuff but rather dumb comments. We particularly liked “With any new wave of technology, there’s ample opportunity to invest in companies that don’t end up being the winner” – which indicates that most venture capitalists should pack their bags and head for the nearest private equity buy-out fund, which is what many former investors in nanotechnologies such as 3i and Apax have already done.

Rather than stocking an index with any publicly traded company that has any connection to nanotechnologies, however tenuous, a fairer method would be to weight the index according to the contribution of nanotechnologies to each companies earnings, which, in the case of many “nanotechnology companies” would be zero.

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