Harris & Harris Group, Inc. (TINY) offers investors a unique, almost paradoxical opportunity to invest in nanotechnology and emerging technologies. While $TINY is only one stock, investing in Harris & Harris Group does not equate to "putting all your eggs in one basket" when it comes to nanotechnology investments. As a venture capital firm and business development company (BDC), Harris & Harris Group has a unique, robust portfolio of companies engaged in the research, development, and commercialization of nanotechnology and microsystems technology.
While it's been a while since my last update here, I figured I'd take some time to post an update regarding my investment in Harris & Harris Group, Inc. ($TINY).
Considering that $TINY is hosting:
"Meet the Portfolio Day"
Starts: 03/13/2012 08:00AM
New York, New York
Now would be a good time to give my own brief introduction and analysis on some of Harris & Harris' portfolio holdings that really interest me.
But, before I begin, I'll give the background story on how I came to invest in Harris & Harris.
In short, it was a simple "stock tip."
A friend of mine who was a biology major at Texas A&M asked if I knew about a company called Solazyme.
While I didn't know about Solazyme at the time, I was interested.
With that, I did some digging.
Very quickly into my digging, I was impressed with Solazyme's work but disappointed with the fact that they were a private company and the subsequent fact that I was unable to invest in Solazyme.
Nonetheless, I dug further and came to discover that one of Solazyme's sources of venture capital funding was Harris & Harris...a public company that I actually could invest in.
With that, I first purchased shares in $TINY as a means to invest in Solazyme "by proxy."
Was there solid research behind my decision?
No..not for the first 30 shares of $TINY @ $3.80 at least.
(I wish I could post a corresponding purchase date but I transferred from Merrill Lynch to ShareBuilder a while back and I can't figure out how to get that bit of information from ShareBuilder's website)
As for my next 10 shares of $TINY purchased @ $5.08 on 6/23/2011 through my ShareBuilder account, that's a different story.
My decision to increase my position in $TINY largely stems from my belief in the long-term potential of the following companies that are part of Harris & Harris' diverse nanotechnology portfolio:
SOLAZYME ($SZYM)
For me, Solazyme's marketing of "renewable oil" is something of value that has long-term potential itself.
Since Solazyme has so many diverse business activities beyond transportation fuels, I'll just post a link to the company's website below.
Visit the Solazyme website
NANOSYS, INC.
Since the above excerpt from Harris & Harris' website doesn't explicitly show or say what Nanosys does, I'll give you the simple explanation:
Nanosys helps make electronic devices look better and last longer.
Since a picture is worth a 1000 words, see for yourself:
Pretty, bright, and crisp huh?
Now I've been a "closet copywriter" ever since I can remember.
And, while I don't own an iPad, maybe I can apply my developing copywriting "skills" to Nanosys' equally developing commercial activities.
Perhaps a good tag-line for the above image could be:
"Brighter is better....See the Nanosys difference yourself."
Who knows? Maybe that'll stick.
D-WAVE SYSTEMS, INC.
First off, D-Wave Systems is very unique from my perspective because I rarely encounter the term "quantum computing" unless it's attached to a major research university like MIT.
Additionally, while I've written about the "black swan" potential of quantum computing and the Central Intelligence Agency's venture capital activities with respect to In-Q-Tel and Recorded Future's predictive analytics IT services, I would say that these diverse parties and interests could potentially become involved with D-Wave Systems' commercial endeavors should the company make significant advances in quantum computing.
Without going too in-depth on this speculation, I will say that this could mean:
-Future investment in D-Wave Systems from In-Q-Tel.
-Future contracts with governments, military agencies, and intelligence agencies worldwide.
-Future contracts with corporate IT security firms and various government contractors in response to continued developments regarding cyber-threats, hacktivism, and sensitive data leaks.
DISCLAIMER: I am not withholding or privy to any "inside" or otherwise sensitive information regarding D-Wave Systems' partnerships and business contracts.
I simply figure that if D-Wave Systems provides good, useful, and cutting edge IT and quantum computing technology, then they might attract the attention of the aforementioned parties who might find good use for their products one day.
With that, this song is dedicated to D-Wave Systems...
May you break Moore's Law and get away with a fat wad of cash:
HzO, INC.
Recently named an honoree for the "embedded technologies" category in the 2012 International Consumer Electronics Show, HzO looks like a company with immense growth potential.
Imagine the long-term potential of HzO's technology...
HzO develops a protective coating for practically any electronic device or technology that could get ruined by water or any other intrusive and damaging foreign substance.
As cool and convenient as that sounds, HzO has the potential to become something more than a company with the capability to put "Otter Box" out of business.
The sheer magnitude and long-term potential of HzO's industrial coating does not compare to the commonplace "protective cases" for iPads and ever-so-delicate smartphones*.
*I am a pragmatic (but not proud) owner of a Samsung Rugby (not a smartphone).
^While a "dumb" phone, the Samsung Rugby is "ruggedized" to military grade standards^
Yes, I am frequently told that I need a smartphone.
Yes, I was once made fun of and called "Zach Morris" by a stranger at a bar.
Yes, I will be getting a smartphone in the near future:
^Samsung's "Galaxy Xcover"...a ruggedized smartphone ^
Here's another random advertising tag-line:
"The Samsung Galaxy Xcover...Your smartphone in shining armor."
Maybe that'll stick too...
Back to the point:
Despite my enthusiasm for HzO's growth potential, always remember that "you could plan a pretty picnic, but you can't predict the weather."
With that, I'll end with my "black swan" possibility regarding HzO:
HzO could be bought out by DuPont or any other large industrial chemical company.
Reasoning?
Consider the story for Harris & Harris' investment in Innovalight, Inc.
INNOVALIGHT, INC.
Once a promising solar energy start-up, Innovalight was known for developing a special ink that can boost the efficiency of solar panels.
However, it must be noted that adding Innovalight's ink to improve the efficiency of solar panels requires an extra step in the manufacturing process:
Sparing projections on the global growth of solar power, international trade issues regarding China's manufacturing of solar panels, and all other colorful issues concerning solar power, the brass tacks on Harris & Harris' investment in Innovalight is that their investment wasn't bad, but wasn't stellar either.
With that, I personally believe that IPOs (initial public offerings) for TINY's portfolio companies are more lucrative and exciting than corporate buyouts like Dupont's acquisition of Innovalight:
For one, buyouts tend to be rather explicit in terms of the money and payout. With that, the "speculation" element for buyouts isn't as great as it is for IPOs.
With IPOs, $TINY day traders and long-term investors alike can sell on factors like favorable price and volume swings, widespread coverage of the IPO (which can bring more investors to discover $TINY's ticker), and other factors that have a greater speculative element.
Furthermore, if a $TINY investor really believes in one of $TINY's portfolio companies, then they might have to pay a high price for their conviction.
For example: If one truly believed in Innovalight's product, then they will have to consider purchasing shares in DuPont.
That's a big jump in price.
$TINY's 52 week trading range: $3.17 - $6.30 (as of 2/8/12)
Dupont's ($DD) 52 week trading range: $37.10 - $57.00 (as of 2/8/12).
So, with respect to HzO...
Consider that:
1) HzO may not have a sure-fire IPO.
2) Continued personal investment in HzO may not be affordable in either the post-IPO OR the buyout scenario.
3) HzO's product may not even undergo widespread implementation, regardless of its impressiveness.
For #3...consider things like:
-The monetary utility of "planned obsolescence" in the consumer electronics industry.
-Added manufacturing costs for electronics that use HzO's coating.
-Marketing particulars for HzO like...
Can or will the coating be applied at the buyer's request after purchase of non-coated electronic devices?
Will manufacturers pay a "per unit" premium for HzO's coating if used during the manufacturing process?
Licensing terms?
Warranty stipulations?
and more...
So that's that.
As far as future updates are concerned, I think I'm going to take a "quality over quantity" approach to upcoming posts.
Nonetheless, expect the next post to discuss technologies similar to those discussed here.
However, while there will be a nanotechnology investing component to my next update, the average investor can't have stock ownership in any of the entities to be discussed or even physical ownership of the actual technologies being funded (for now at least).
And yes, you'll want to have physical ownership of at least two of the upcoming products to be discussed.
Here's a hint for one of those products:
What makes the above animal so special and such a good hunter?
Stay tuned.
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