2009 Nanotech & Advanced Technology Investment Insights

January 12, 2009

Dear Nanotech Insights Subscriber,

I have been looking for a way to be of service to our most loyal readers. Especially in this extremely difficult economy, we need trusted, experienced and knowledgeable advisors.

We are developing a way that I may be able to provide a unique service for a few of you: More on that later.

Let’s take a look back at 2008 and a look forward at 2009/2010 and see what we got right and what we missed, and how we should proceed in the coming years.

What we missed:

1. In March 2008, I suggested for the first time since 2002 that investors start investing 1/24 of their funds for advanced tech stocks on a dollar-cost-average basis, every month for the next 24 months. I fear I was a year or more early.
2. In May 2008, I proposed that the stock market and small-tech bottom would be in place before the end of 2009. While I now believe such a bottom may technically be put in place this year, I don’t see a significant advance beginning before 2011 at the earliest now.

I apologize if this cost you money. While negative on the economy, I now believe even I was too early on the markets and March-May 2008 was part of a different world that no longer exists. There were no bailouts. There were no multi-trillion dollar stimulus programs (yes, by the end of 2010 it will not be $775B it will be more like $2.5T). I just thought things were horrible and getting worse; I didn’t know the roof was about to cave in. This was a time when TARP was merely a flexible, waterproof covering.

What we got right:

1. We warned to sell all small-tech & advanced tech stocks in October 2006, and that turned out to be good advice, as the typical stock in this group was down more than 25% to May 2008.
2. We have been warning continuously since 2003 that the venture capital model is broken, and finally this month Forbes, in a major expose, noted that the top firms in VC (to say nothing of the average) have not returned profits to their limited partners in eight years while collecting ridiculous fees.
3. Despite the warnings, we managed to guide our subscribers to significant profits in trading nanotech and small-tech stocks from early 2006 through 2008, far exceeding the notable indices, which posted negative returns.
4. We warned of a recession and collapse in real estate in 2006 and in November 2007 warned that this would be the consensus view before September 2008.

Where we are today:

It pains me say this, but while we have spoken about passing the early 1980’s double recession and the 1973/74 recession a while back, we have now made enough of a mess to say we have passed the Panic of 1907 and are fast approaching the Panic of 1893. While I am not a scholar in the field, the Panic of 1893 is considered this country’s most damaging depression with the exception of the Great Depression. This depression is starting to look in many ways like and echo the 1893 -1898 depression. It is unlikely that we will find a “bottom” for the economy before mid 2010 and if we keep putting the day of reckoning into the future like Japan did in 1990 (to today, continuing), we may see 11-16% unemployment and a bottom in 2013 or later.

My biggest question mark is how long this deflationary period will last. My work cannot see whether it ends in 3 months or lingers for 3 years. Certainly, whenever it ends years of high inflation (hopefully not hyperinflation) will follow. The human costs, market costs and financing predicaments will be immense. Please don’t listen to those who think this is all going to pass by June to October of 2009. The next layoff response is still months away (and it may not be the last) and the best day for a laid-off person is the actual day they are laid-off. Months later, when jobs are still hard to find and money is scarcer, it is much worse.

We expect the markets to do better than the economy. There will be some significant rallies, and while we do not expect the November 2008 low in the stock market will hold, it might.

Without going into detail further detail on the economy and the markets, we encourage everyone to buy precious metals and precious metals mining shares with a portion of their portfolio. The dollar will be “toast” within 3 years. Those who want more on this should send a note to darrell@ResourceDevelopment.com to be put on the mining, metals and natural resource stock list.

For small-tech and nanotech investments, there will be three clear roads to profits over the next 5 years:

1. Successful short-term trading (2 week to 2 month periods)
2. Long/Short portfolios
3. Long-term investments (3-6 year hold periods) made at low points over the next 1-3 years

Clearly, for the near future, I do not expect intermediate-term investments in the 4 to 24 month timeframe to have much profit potential.

For those of you who would like my assistance, I may be associating with a Registered Investment Advisor (RIA) over the next few months and hope to offer separately managed accounts (SMAs) through brokerage firms in each of the three winning strategy areas listed just above.

Please send a note to darrell@Nanotechnology.com for further info in this regard, as it develops.

Best regards,

Darrell Brookstein

Managing Director

The Nanotech Company, LLC

www.Nanotechnology.com

darrell@nanotechnology.com

2009 Mining & Metals Investment Insight

January 12, 2009

Dear Mining Insights Subscriber,

I have been looking for a way to be of service to our most loyal readers. Especially in this extremely difficult economy, we need trusted, experienced and knowledgeable advisors.

We are developing a way that I may be able to provide a unique service for a few of you: More on that later.

Let’s take a look back at 2008 and a look forward at 2009/2010 and see what we got right and what we missed, and how we should proceed in the coming years.

What we missed:

1. We recommended a portfolio of mining shares in 2008 and they suffered large losses to date.
2. We recommended too many high-risk companies with small treasuries that cannot sustain them through 2009.
3. We overemphasized silver stocks – gold stocks did much better.

I apologize if this cost you money. While negative on the economy, I now believe even I was too early on the markets and most of 2008 was part of a different world that no longer exists. There were no bailouts. There were no multi-trillion dollar stimulus programs (yes, by the end of 2010 it will not be $775B; it will be more like $2.5T). I just thought things were horrible and getting worse; I didn’t know the roof was about to cave in. This was a time when TARP was merely a flexible, waterproof covering.

What we got right:

1. We warned of a recession and collapse in real estate in 2006 and in November 2007 warned that this would be the consensus view before September 2008.

2. We bought at the April and August lows; excellent timing for the first three quarters, and we did not buy in 2007 as many did at substantially higher prices.

3. We advised only 3-6% of portfolio total in mining shares.

4. While we advise holding core positions for the long-term, we recommended the sale of all other mining shares at the TSX Venture signal at 1444 in late September 2008. The index is now about half that. (Core positions include Animas, Canplats, Rare Element, Silver Wheaton, Intl Tower Hill, et al. per previous Mining Insights)

Where we are today:

Except for our core positions we still advise being out of the market.

It pains me say this, but while we have spoken about passing the early 1980’s double recession and the 1973/74 recession a while back, we have now made enough of a mess to say we have passed the Panic of 1907 and are fast approaching the Panic of 1893. While I am not a scholar in the field, the Panic of 1893 is considered this country’s most damaging depression with the exception of the Great Depression. This depression is starting to look in many ways like and echo the 1893 -1898 depression. It is unlikely that we will find a “bottom” for the economy before mid 2010 and if we keep putting the day of reckoning into the future like Japan did in 1990 (to today, continuing), we may see 11-16% unemployment and a bottom in 2013 or later.

My biggest question mark is how long this deflationary period will last. My work cannot see whether it ends in 3 months or lingers for 3 years. Certainly, whenever it ends, years of high inflation (hopefully not hyperinflation) will follow. The human costs, market costs and financing predicaments will be immense. Please don’t listen to those who think this is all going to pass by June to October of 2009. The next layoff response is still months away (and it may not be the last) and the best day for a laid-off person is the actual day they are laid-off. Months later, when jobs are still hard to find and money is scarcer, it is much worse.

We expect the markets to do better than the economy. There will be some significant rallies, and while we do not expect the November 2008 low in the general stock market will hold, it might.

One thing we said in 2008 that we still believe is that when we compare the TSX Venture Exchange Index highs between now and March 2010 with the average of the April and August 2008 TSX Venture lows where our purchases were made, the profit potential will be extraordinary.

For the time being we are in a continuing bear market in precious metals mining stocks that I expect to end by September 2010 (and possibly by August 2009). The bottom will be indicated in one of two ways. Either a bottoming formation will be made in 3 to 6 months or the GDX (Gold stock ETF) price of $34.46 will be exceeded.

What will work now:

1. Buying for the long term at significant bottoms over the next 6-30 months
2. Trading for two week to two month timeframes
3. Equal dollar amount Long/Short investing

For those of you who would like my assistance, I may be associating with a Registered Investment Advisor (RIA) over the next few months and hope to offer separately managed accounts (SMAs) through brokerage firms in each of the three winning strategy areas listed just above.

Please send a note to darrell@ResourceDevelopment.com for further info in this regard, as it develops.

I will be speaking at the Vancouver Cambridge House Conference Jan 25-26 and look forward to seeing some of you there. Visit http://cambridgehouse.ca/ch_jan2009.html

Best regards,

Darrell Brookstein

darrell@ResourceDevelopment.com

2009 Nanotech Fortunes Update

A 2009 Update to Nanotech Fortunes: Make Yours in the Boom; Winning Strategies (2005)

Revisiting in a Serious Recession or Depression


By: Darrell Brookstein, Author of Nanotech Fortunes
Managing Director
The Nanotech Company, LLC
San Diego, CA
Phone: (in U.S.) - 858 794 0848
Email: darrell@Nanotechnology.com


December 7, 2008

People at the highest levels of authority in our government, commercial and investment banks, hedge funds and leading corporations had no idea of risks involved in what they and their policies were doing; simple, basic understandings that should be expected of any fiduciary. Combined with a failure of oversight (not lack of regulation), greed, incorrect response to the problems based on incorrect assumptions, we are where we are today: in a serious, 18-30 month recessionary period, that can turn into either a decade plus long Japan-like situation (1990 forward) or international depression with just a few more missteps.

Given where we are, new paradigms that we detail for each group below are required for small tech-interested investors, brokers and investment banks, hedge funds, venture capital firms, angels, publicly traded and private companies and professional services providers in the space.

In Nanotech Fortunes, written in 2004/05, Chapter 15 – Six Steps to a Nanotech Fortune (pp. 144-193) was the longest and most important section. When the first copies rolled off the presses in May 2005, we felt that the first nanotech investment boom had not occurred and was unlikely to begin before the mid-2006 to 2009 timeframe. In late 2005, I noted we had a serious decline ahead in the equities in general, tech stocks specifically and nano and microtech-related stocks most seriously. Reiterating this again more strongly in December 2006, our Nanotechnology.com Small Technology Stock Index (the strongest related index) has recently fallen more than 52% from its high and we are trading at about 6-year lows.

We believe that depending on your level of interest and role in the nanotech-investing world, the devastating economic, financial and investment environment that has surfaced over the last three to seven months will have dramatic affect; you need to drastically change what you’ve been doing.

Let’s examine the edits we would make today to Chapter 15 of Nanotech Fortunes.

If you are:


A Publicly Traded Advanced Technology Company

Scarce capital to grow or survive is about to become even more scarce. Count on this lasting (with possible short-lived windows) at least 2-4 more years.

If you do not have excellent, targeted IR and financial PR, you are not going to survive unless you dilute yourself incredibly (or have a full treasury to last 5 years already).

We have yet to see a single, publicly traded nanotech, “small tech” or advanced technology company with the proper understanding of the correct roles of IR or financial PR, much less doing what we consider to be even a “good job”.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


A Private Advanced Technology Company

You’ve been having a hard time getting attention (much less capital) for more than a year. Sorry, but it is about to get much, much worse.

VCs and even Angels are looking for late stage, large dollar deals, and despite their continued failures to achieve positive investment outcomes they are likely to continue doing this.

The TSX Venture Exchange alternative that I’ve been speaking and writing about for years is even tightening up due to the recent natural resource debacle (not to mention the recession/depression in which we find ourselves).

In this atmosphere, only the most polished, most prepared, have a realistic chance of success. To put yourself in front of the best possible groups with the best possible presentation, you need maximum professional assistance.

We have a long history of working with micro- and small-cap public companies.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.



A VC or Private Equity Firm

Venture and other private equity firms still have not gotten a handle on how to make money in advanced technologies. The keys for the near future will be to focus only on companies: A. requiring very little capital to achieve an exceptional ROI in a very tight timeframe and B. that save industries capital, lower expenses or make existing processes more efficient.

Our firm has uncovered only five companies that fit this model today.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


A Hedge Fund Manager

Except for a couple of atypical, VC-style private placements, hedge funds have done very little in the space. As their model suffers with the markets and economy through this most difficult period in their history, very little new is likely to be done.

This is an incredible opportunity for a forward thinker, not afraid to buck the pack. There will be no competition. A relatively small amount of capital, partnered with our firm’s merchant banking capabilities in “small” and advanced technology companies that save industries capital, lower expenses or make existing processes more efficient, would own the space for decades.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


A Broker or Investment Bank

We have seen a number of investment banks and individual brokers fail in building the type of nanotech and advanced tech practice I first wrote about in 2004.

A few have financed deals that have just done horrendously.

Incorrect ways of looking at valuation and faulty research are usually at fault.

I have tried to get more than one well-capitalized group to turn this job over to our team. A more “merchant banking” style formula, proper research and a better valuation process would give this concept the success and the string of wins it needs to establish itself and the forward thinking broker or investment bank will reap substantial rewards.

Individual brokers could market and earn fees on separately managed accounts (SMAs) that trade fully-hedged long/short, options strategies or pairs trade strategies (the only strategies we believe can succeed in the flat or down markets we anticipate) run by professional managers or they could manage these types of trades for their clients by subscribing to a professional newsletter.

Prior to the collapse in oil prices, alternative energy, green tech, solar and cleantech, etc. seemed to many investment banks to offer the greatest potential for creating wealth from cutting edge technology companies, but that’s hit a fork in the road (or a brick wall) for the time being.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.

An Angel Investor

In 2004, the typical angel was an individual who invested $20K to $200K per deal and invested mostly on his own or with a small group. He or she saw himself or herself as pre-A round, seed investor willing to take serious risk to make a serious profit.

Since then things have changed a lot.

Angel investing is much more institutionalized, with large, geographically and interest-centered Angel groups making “group” decisions. These decisions, more and more look like venture capital firm decisions because the Angels no longer want to invest in anything in which a VC will not also invest.

This “group think” is destroying creativity and the institutionalization of the process appears to lower risk, but actually just ensures that small deals with high profit potential don’t get done: No one wants to do a deal that won’t be of interest to a large VC firm.

Some Angel groups would benefit from a higher-level scientific, technological and commercialization consulting than they can get within their group when looking at the cutting edge of technology.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


A Very Affluent Investor or Family Office

Except for a couple of atypical, VC-style private placements, the truly wealthy and their Family Offices have done very little in the space. As their model suffers with the markets and economy through this most difficult period in their history, very little new is likely to be done.

This is an incredible opportunity for a forward thinker, not afraid to buck the pack. There will be no competition. A relatively small amount of capital, partnered with our firm’s merchant banking capabilities in “small” and advanced technology companies that save industries capital, lower expenses or make existing processes more efficient, would “own” the space for decades.

Also, while all investors should get a professional financial plan or current plan review, ASAP, those with net worth between $10M and $80M are at particular risk. These individuals usually have advisors who are unfamiliar with high inflation/deflation hedging and are too small to have developed, professional family offices.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


An Advanced Technology Professional Services Provider

Up until the last 9 -18 months, this group was doing well.

Accountants, consultants and attorneys were about the only ones making money in the nano and micro space.

The world has changed, of course, and the universal tight capital is killing billings.

Marketing and reaching new clients is paramount at this time, and through our connection to Nanotechnology.com, we have access to the decision makers.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


A Stock Investor

A major up-move (related to short-covering and the Obama honeymoon period) for short-term speculators has begun and will likely end between now and February 28, 2009 (we look for a high of between 92 and 101 basis the SPY. Traders should begin looking for places to reenter short positions between 93 and 97).

Other than that, we see little chance of a real market bottoming for long-term investors before the period between July 2009 and September 2011.

On cutting-edge technology companies: Affluent investors should begin long-term investments only in early-stage private companies that can save industries capital, lower expenses or make existing processes more efficient.

Others should avoid the public markets for these types of shares until a bottom is in place in the Nanotechnology.com Small Tech Index.

All investors (especially those with net worth above US $2.5 million) should get a professional financial plan or current plan review, ASAP, with that rare advisor who understands how to plan/hedge for both rampant inflation and deflationary scenarios.

Please call or email me to explore how we can be of assistance in any of the above. We serve customers; we tailor individual solutions; we believe every situation is unique and deserves individual attention.


Darrell Brookstein, Author of Nanotech Fortunes
Managing Director
The Nanotech Company, LLC
San Diego, CA
Phone: (in U.S.) - 858 794 0848
Email: darrell@Nanotechnology.com