Heather Langsner & Sondra Martinez

Research Organisation

Report Date
Aug. 29, 2005

Document summary

In his book, “Quantum Investing”, Stephen Waite suggests that quantum physics is the underlying science behind a significant portion of today’s Gross National Product. He predicts that the influence of quantum physics, specifically nanotechnology will expand to the extent of fundamentally altering the Dow by 2025.

With products already entering the market and many more to come in the next three to five years, the question becomes which companies will be strong enough to deal with both conventional challenges and those stemming from the perception risk that may be associated with the environmental, health and safety (EHS) profile of nanotechnology going forward. The authors expect a number of EHS studies to be complete in that year. Moreover officials in various markets tell them that they have set their sites on that timeframe for establishing a base level of regulation.

The authors suggest that investors need to begin educating themselves about which particles, processes and applications represent greater levels of risk than others. They interviewed 12 (early and late stage) venture capital firms. Many of these firms do not seem to be doing a thorough review of the EHS risks.

Given the diverse range of applications for nanotechnology, the value investor may focus on products rather than nanotechnology itself. Moreover, public perception risks may be mitigated by demonstrating the benefits of using nanotechnology in a timely manner.

Industry’s experience with synthetic chemicals and genetically modified organisms may provide historic lessons for investors interested in the potential impact that perception and other non-traditional issues could have on the advancement of nanotechnology. Development Stage Companies appear to be cognizant of risks and a number of them are conducting themselves in a manner that would be considered favourably in our analysis.

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