Dear Mr. Berko:

What can you tell me about nanotechnology? I’m told by a friend that this science will be the future of all industry, and he has a private investment in a start-up nanotech company that he says will make him a multimillionaire. I asked if I could invest $10,000 in that company, but they will not allow any new investors.

Can you tell me if this nanotechnology thing is as big as my friend thinks it is? And can you give me the names of some nanotechnology companies where I can invest $10,000 and maybe make a good profit?

E.O., Kankakee, Ill.

Dear E.O.:

Nanotechnology is indubitably the most revolutionary science of the 21st century. Its personal as well as commercial applications will surpass, by orders of magnitude, all that science has discovered since the beginning of time. That may sound like the raving of a madman and a ridiculously far-fetched boast. Well, I assure you that I’m not a madman (at least not in the commonly accepted sense of the word), and I promise you that this boast is uncommonly modest.

Nanotechnology is an emerging science, and researchers with atomic microscopes and powerful computers in Europe, Asia and the United States are on the cusp of mankind’s greatest discoveries. Big words for industry’s tiniest development. And tiny it is. A nanometer is one-billionth of a meter; about the size of 10 hydrogen atoms lined up in a row. And a nanosecond is one-billionth of a second, and in that time frame light won’t travel a quarter of an inch.

Matter behaves differently when its size is reduced. Reducing the size of matter into nanoparticles can increase its surface area by a factor of tens of millions. Think of a teaspoon of sugar dissolving instantly in a glass of iced tea while a sugar cube might take 60 seconds to lose its corners. Imagine how this absorption rate can affect the efficiency of prescription drug dosages in the body.

Other nanomaterials gain super strength. Carbon, which has a similar atomic structure to diamonds, becomes just as hard but as supple as yarn.

I don’t know enough about this science or its potential applications to pick companies that are in the vanguard. Dow Chemical Co., E.I. du Pont de Nemours & Co., Johnson & Johnson Inc., IBM Corp., Hewlett-Packard Co., Intel Corp. and General Electric Co. are devoting billions of dollars to nanoresearch. But these are not the companies that will provide you with the big returns you seek. GE or DuPont or Dow Chemical will certainly achieve breakthrough discoveries that may add a few billion dollars to their revenues. But a couple of billion to GE’s revenues will have about as much impact as would the advent of another fly to a slaughterhouse.

Hundreds of small nanocompanies are listed on the pink sheets and the bulletin board. Most of them are touted by penny-stock brokers as “soon to be the next Google or Microsoft.” And probably 99.9 percent of them are con games that will fold their tents and at some opportune point steal silently away into the night. But I can give you a few names that are legitimate enterprises and a pure play in the nano field.

I’m not recommending the following issues, because I’m not comfortable with my knowledge about this technology. But I believe that the following nano companies might have some honest speculative potential.

FEI Co. (FEIC-$22.25) designs and manufactures systems and products that provide an understanding of objects’ three-dimensional characteristics. Last year’s revenues were $465 million, and FEI should earn $1.25 per share next year.

Nanometrics Inc. (NANO-$11.66) manufactures high-performance metrology systems for semiconductors and integrated circuits. Metrology systems measure the thin film properties that are used in layer-to-layer circuit alignment. Revenues last year were just $42 million, but NANO could earn 90 cents a share this year.

NVE Corp. (NVEC-$18.31) had $12 million in revenues last year and made a profit of 45 cents a share. NVEC makes sensors and couplers using a nanotechnology that utilizes an electron spin, rather than an electron charge, to acquire, store and transmit data. NVE expects to earn 33 cents per share this year and 58 cents in 2006.

Nano-Proprietary Inc. (NNPP-$2.81) develops products and services based on novel applications of carbon nanotube technology. NNPP is also conducting research in this technology in the medical, X-ray and wireless communications industries. Revenues (primarily from research grants) this year will be about $400,000. The company hasn’t earned a dime, but its research might have traction.

Finally, Biophan Technologies Inc. (BIPH-$2.83) is conducting fascinating research with nanomagnetic particles. This will allow radiologists to use magnetic resonance imaging contrasting agents that can be manipulated to detect multiple diseases or tissue injury during a single image sequence. BIPH has no revenues, no earnings and is funded by research grants.

Good luck to you.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.