The hype cycle defined by Gartner has five distinct phases: the technology trigger, the peak of inflated expectations, the trough of disillusionment, the slope of enlightenment and the plateau of productivity (see link). In a nutshell, people get excited about a new technology, everyone then says that it will change the world and people buy in, everyone gets disappointed a few months later and sells out, and meanwhile the technology gradually becomes adopted and eventually it is of some use.
It could be that the nanotechnology hype curve is just about to head way off the scale. Just what we need in a time of falling markets and doubts about corporate governance - a technology-enabled get-rich-quick scheme. Or maybe not.
I recently received an email, which began:
"Dear Investor,
There's a MAMMOTH technological shocker afoot. And it's about to turn many big TECH BLUE CHIPS on their heads.
If you fail to reposition your assets now, you could not only get caught in one of the greatest stock market reversals of the industrial age...
...but also MISS OUT on one of the GREATEST wealth-building opportunities of your investing life.
If you want to REAP FUTURE PROFITS, write this name down now and REMEMBER that you read it here first:
NANOTECHNOLOGY."
The mail has the classic get-rich-quick spam mail tone, claiming that the senders have already made a "SMALL FORTUNE" and that you can too if you just pay them to tell you the five companies that could make you "10 times richer in your lifetime".
The tone of some of this hyperbole suggests that people will be pretty disappointed not to be wealthier than their wildest dreams within a few years. As we all know, when US investors get mad, they call a lawyer. There's a lesson in here somewhere. Let's hope we are not condemned to repeat the past.