Nanotech Insights #8
March 25, 2008
Dear Small & Advanced Technology Investor,
First, a bit of housekeeping:
Many of you have yet to let us know if you are an “accredited investor” or not. As we will be discussing some investments only available to “accrediteds”, we need that group as a separate list. Please send us a short note at darrell@nanotechnology.com, ASAP; thank you. (Please note: if you have already sent it, we have it.)
As I expect to be a director of several public companies (mainly Capital Pool Companies – CPCs – on the TSX Venture Exchange) over the next 12 months, I am unsure how much longer, I will be able to write these notes without running into a variety of restrictions. (Even more reason to become involved in our business, rather than simply standing aside as simply an interested investor and newsletter reader. This could be as a vendor of a “small-tech” business, fund-raiser, merger or spin-out “rainmaker”, or finder for any of these.)
To be clear: Our firm, supported by our eminent Scientific Advisory Board, is going to be building “small” and advanced tech companies via the TSX Venture Exchange. The main reason we are communicating with this relatively small group and fraction of our list of Nanotechnology.com subscribers is that some of the “accrediteds” among you may have the opportunity to participate at a ground-floor stage in these investments and others of you may assist us in growing this process.
Again, opportunity and history knock only once.
Our contact on issues and recommendations such as those below may be limited soon by our involvement with public companies. We have tried over these 5 years to open a curtain on our thoughts, processes and investment ideas; often at the risk of disclosing parts of our proprietary and unique business model and investing competitive advantage.
In the end, it is and was clear that no one else can do what we do, much less, do what we do as well as we do.
Among other things, we kept you OUT of investing in nanotech and other “small” and advanced technologies while others promoted, invested, and created this opportunity for us, now.
When we did invest or trade in the declining market, we won, evidencing our strong capabilities to pick winners and losers independent of market direction.
Rest assured, we have been offered dozens of private and pre-public investments in our chosen “space” over the last 5 years . . . and we have turned down every one. If the science and technology were solid, the valuation was not suitable. If the valuation was good, the science and technology or time-frame were suspect.
Patience pays off. Valuations are DOWN. Money is TIGHT. Success stories have been FEW.
This is what we have been waiting for. What a great time to be a nanotech investor.
Please join us. (To be clear: call or email me to discuss.)
Now, onto the “meat” of this letter:
On the overall market: While we cannot rule out a run to 144 on the SPY, we still believe this stock market rally is within a Bear Market, and we remain nervous “longs”, especially when the SPY goes above 136. The 130.50 number in SPY offers good support and we would treat any violation of that number as a sign to sell and wait. The most important “line in the sand” is at 125.99 in the SPY; single trades there or below will likely trigger another sharp decline in the stock market. Look for a “trading range” market until then, unless we see our proprietary bottoming signal first.
If you have been following our recommendations, you are LONG these stocks below. Now, please see how we would play them from here, given that we are not feeling this is the time to make long-term commitments in the stock market:
ADI – keep an overall protective stop at 28.81; raise that to 29.06 on any trade at 29.76; take profits on half the position at 30.04.
ALTR – keep an overall protective stop at 18.29; raise that to 18.69 on any trade at 19.06; take profits on half the position at 19.24.
BNT – Keep an overall stop-loss at 13.26; raise that to 13.99 on any trade at 14.26; take profits on half the position at 14.39.
FORM – keep an overall stop-loss at 17.69; raise that to 18.24 on any trade at 18.86; take profits on half the position at 19.69.
MTSC – keep an overall stop-loss at 31.99; raise that to 32.27 on any trade at 33.82; take profits on half the position at 34.74.
XLNX – our huge winner to date: keep an overall protective stop at 23.49; raise that to 24.10 on any trade at 25.26; take profits on half the position at 25.39.
Going Forward:
We would buy CCMP on a 32.75 STP and carry a sell stop-loss at 32.09.
We would buy IVGN if it can pull back a bit at an 84.01 Limit and carry a sell stop-loss at 80.24.
We would buy AATI if it can pull back to 6.41 Limit and carry a sell stop-loss at 6.02.
Please note: These stocks above are VERY heavily over-weighted to the semiconductor side of “small tech”. Be especially cautious not to go overboard.
Caution for holders of PXN, TINY and ACTL. The first two are sometimes incorrectly viewed as proxies for a nanotech index or mutual fund of sorts, and they are running up to important resistance over the next couple of days to couple of weeks. We would use that opportunity to sell. ACTL is a very strong stock, but looks “toppy” at current levels, and we would look for a sharp correction soon. Beware.
If you are not an “accredited investor”, should you begin investing for the long-term in “small” and advanced tech stocks, now, and if so, how?
Unbelievably, for the first time, ever, we say – yes!
If we were in that situation, we would “dollar cost average” (http://en.wikipedia.org/wiki/Dollar_cost_averaging) monthly, over the next 24 months. We would divide the total amount we wanted to invest in these type shares over the next few years – let’s say $24,000 – into 24 and invest the same amount monthly on the same day (in this case $1000), every month for 24 months starting now.
What stocks would we choose and how many shares of each would we buy?
Simply, we would buy The Nanotechnology.com Small Tech Index using the stocks and the ratios we present there. (Remember to use the footnotes at the bottom of the page. They are very important.)
http://www.nanotechnology.com/stocks/?a=index
Thanks,
Darrell Brookstein
Managing Director
The Nanotech Company, LLC
Nanotechnology.com
3525 Del Mar Heights Rd. #345
San Diego, CA 92130
858 794 0848
Disclosures and Disclaimers
GENERAL TERMS*
No investment opinion or other advice is being rendered on any stock or company. All of the trading stocks we recommend should be considered highly speculative; you can lose some or all of your money. It should be assumed that the Author and editor and their associates may hold or dispose of or trade in positions in any securities mentioned at any time. No fee in cash, shares or options was paid for this report. Please be responsible for understanding the terms and vocabulary of stock market investing. Here is an unaffiliated glossary site that may be useful: http://www.traders.com/Documentation/RESource_docs/Glossary/glossary.html
Disclaimer
The Nanotech Company, LLC, Darrell Brookstein and/or Resource Development, Inc. are not registered investment advisors nor broker/dealers. Readers are advised that the material contained herein should be used solely for informational purposes. The Author does not purport to tell, or suggest to, readers which investment securities they should buy or sell for themselves. Readers should always conduct their own research and due diligence and obtain professional advice before making any investment decision. The Author will not be liable for any loss or damage caused by a reader's reliance on information obtained in any of our newsletters, special reports or on our web site or sent by email or mail. Our readers are solely responsible for their own investment decisions. The information contained herein does not constitute a representation by the publisher or a solicitation for the purchase or sale of securities. Our opinions and analyses are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in our newsletters or on our web site should be independently verified with the companies mentioned. The editor and publisher are not responsible for typographical or other errors or omissions. There is no guarantee of investment results herein whatsoever, either explicit or implied. Past results are no guarantee of future results or even profitability. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.
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