"I'm scared of anybody with nano in their name."

That quote from Kevin Landis, who manages investments at Firsthand Capital Management in California, is the sound-bite-du-jour in the nanotech community.

But I did a little investigating and found that Landis' judgment hasn't always been spot-on. His Firsthand Technology Value Fund, lost 87 percent of its value when the dot-com bubble burst.

To Landis' credit, however, the fund gained 12 percent last year, outperforming 88 percent of similar funds. The Firsthand Technology Value Fund contains no nanotechnology shares.

In another sign that investors may be backing off, Lux Research now bills its nanotech index as a "benchmark" rather than a collection of shares that are expected to rise, according to Matthew Nordan, president and director of research at Lux.

And 16 of the 25 companies in Merrill Lynch nanotechnology index reported losses last year. Analysts expect 12 to lose money this year, according to estimates compiled by Thomson Financial.

Visit Nick Baker's Bloomberg News report, "Around the Markets: Waiting for the next big thing," to learn more.