Below is an excerpt from a conversation that Chris and I had last night. It concerns emerging markets, and some thoughts on how best to enter them. I’ve just posted the conversation as is, not even bothering to modify for typos and mispellings. In a few weeks, I’ll post more thoroughly on this topic, as it interests me, and deserves my full measure of attention. Also, this is just an aside, and not a substitute/cop-out for my weekly article, that will follow sometime tomorrow.
(21:46:58) Chris: how do you feel about nanotech?
(21:47:28) Frank: I feel it’s returns are even further off than biotechs, but that there are some VERY promising things happening
(21:47:43) Chris: like?
(21:48:06) Frank: new polymers and materials, especially related to batteries that do nice stuff.
(21:48:14) Frank: Carbon Nanotubes
(21:48:31) Frank: I can get more specific, but I’d have to go back through my material
(21:49:22) Chris: is that part of nanotech?
(21:49:32) Chris: isn’t nanotech just little machines?
(21:49:41) Chris: or is anything that’s really small…
(21:51:18) Frank: I used to think tiny machines
(21:51:32) Frank: but the tech is pretty much, just exceptionally small shit.
(21:54:01) Chris: you seem to like the mutual fund when you’re unsure of a market but want to get in
(21:54:20) Chris: is there some research backing that, or is it just common sense?
(21:54:22) Frank: that’s an investment service.
(21:55:14) Frank: but also, you’re right. I think it’s common sense, especially for me now. I need to build a portfolio to get the attention and services I desire to take the proper risks.
(21:55:33) Frank: that aside, I don’t see those markets as primed
(21:55:45) Chris: in what sense?
(21:55:56) Chris: ready to grow big
(21:55:58) Chris: ?
(21:56:23) Frank: I can make good returns on stocks that I need not be wary about. That have a history and are undervalued, or are in emerging markets.
(21:57:33) Frank: I want to not miss out entirely on gains on emerging markets, but those markets are also not ready to explode, though they will be in a number of years, and by then I can identify players. I can then leverage my other holdings to gain a strong foothold, and benefit greatly from the growth in a shorter period of time.
(21:58:43) Frank: for instance today, there are a number of nanotech/biotech players. Few if any have shown a profit. SO most of the investing is pure speculation. Once you see a few promising technologies, you can identify who has the know how, and as they approach profitablity you can jump on and take the good ride.
(21:59:53) Frank: In the mean time, you can benefit from growth in the industry by investing in funds that target those markets, therby reducing your risk, and placing your money in the hands of people who make it their business to do the leg work I don’t have the time to do. Nor the contacts to exploit.