Question #3: Which nanotech stocks to you consider the most promising?

There's two considerations here. ((As a caveat, my firm does not invest in public market securities or make recommendations to do so, so I'm just providing my own personal insights.)) From a broad market perspective, there is far too much uncertainty and volatility to see anything as particularly "promising". If money isn't flowing out of the market into safer alternative investment instruments (than equity), its going through sector rotation. Opportunistic portfolio managers see prospects in undervalued tech companies then sell-off tech and reposition assets into defensive stocks...this constant re-allocation has been causing a lot of instability. When you couple this with various economic indicators, and the immobilizing debate over whether we're already-in, will-be-entering or won't-see- a recession...its a frustrating if not downright confusing time for many to invest.

Having said all that, assuming an investor has identified nanotechnology as a high-growth industry...I don't really think we have pure-play nanotechnology stocks yet. Most of the public nano stocks are considered part of either: capital goods, construction, construction machinery, scientific instrument and controls, or miscellaneous fabricated products. I'm not sure its necessarily a function of categorization or classification, but maybe rather one of actual product lines. Nanophase for example makes advanced powders and ceramics that can be used to create clear or invisible suntan lotion. Where would you classify that? Miscellaneous products? Seems kind of broad. You could classify others as biotech companies if they're interfacing (or plan to) with organic material or drug delivery/discovery. Then you've got the MEMS players, the Lucents and Agilents which are developing optical or optical-electrical components for networking products. The optical networking sectors has been hit alongside the rest of technology mainly as a result of both over capacity and inventory corrections. Slumping stock prices and a higher cost of capital don't make things any easier.

In fact, don't be surprised if some of the more exciting developments and product introductions come from the incumbent chemical manufacturers: Dow, BASF, DuPont. They've got diversified product lines, strong distribution channels and deeply recognized brands. Rolling out subtle product innovations that have come from nano research would be a lot less costly for them, than others focused solely on manufacturing nanotubes per se--it may be easier to realize the value of a new technique through product integration rather than just selling the process/technique itself.