Decades of increasing vehicle weight may be coming to an end as cars get more lightweight materials.

(Reuters) – After a six-year lull, deal making is back with a vengeance. That means investors may need to rethink strategies to profit from increasing numbers of mergers and acquisitions.

Warren Buffett’s Berkshire Hathaway and Brazil’s 3G Capital Partners said on Thursday they would buy ketchup-maker H.J. Heinz for $23 billion, the same day AMR Corp and US Airways agreed to a merger worth $11 billion. These deals came a week after a group of shareholders led by company founder Michael Dell announced plans to take computer maker Dell private in a $24 billion buyout, and Liberty Media announced a $15.75 billion deal for British cable group Virgin Media.

Just in the past 24 hours, shares of Office Depot Inc and smaller rival OfficeMax Inc have soared on rumors that the two are in advanced talks for a merger that could be announced this week.

Deals are up 10.5 percent to $288 billion this year from the same period last year, according to Thomson Reuters data. Last year, global M&A rose just 2 percent to $2.6 trillion.

Analysts do not expect the value of this year’s deals to top the $4 trillion mark, as in 2007, mergers and acquisitions values should nonetheless jump significantly higher, thanks to a combination of low interest rates, high levels of cash on corporate balance sheets, and rising stock prices that give company executives the confidence to take risks. In a slow-growth economy, companies are also seeing it as a quick way to increase profits, and sometimes eliminate competitors, rather than invest in new operations of their own.

“I’m pretty negative about the market in general in 2013, but the one thing that could upset my hypothesis is M&A, because you have the perfect storm of conditions” for a rally, said Uri Landesman, president of New York-based Platinum Partners, with more than $1 billion in assets under management.

Mature companies with declining growth rates and lots of cash look to buy smaller companies to raise their earnings, which could push share prices higher as investors bid up the companies in potential deals, Landesman said. What’s more, cash-rich companies such as Apple have been targeted by activist investors for hoarding their dollars and not creating enough value for shareholders.

Investors who want to focus on mergers and acquisitions have two main options: play it safe with an arbitrage strategy, or make a bet that they can identify the next takeover targets.

MERGER FUNDS

The easiest way to benefit from potential mergers and acquisitions is through an arbitrage mutual fund or exchange-traded fund, analysts said.

These funds buy shares of the target company after an announcement while shorting the purchaser as a hedge in case the deal falls apart. This strategy tends to make money for investors as the spread between the deal price and the current stock price narrows. Investors rarely benefit from the pop in a share price once a deal is initially announced. Instead, this route is more akin to fixed income investing, where earning a positive return is the primary goal.

“People are starting to dip their toes back into the equity markets, and this is one way of doing it while focusing on capital preservation,” said Willis Brucker, an analyst who works on the $616 million Gabelli ABC fund, which charges a fee of 62 cents per $100 invested. The fund, which turns over its portfolio five or six times a year as deals close, also benefits from rising interest rates faster than an intermediate bond fund because there is little inflation risk, he said.

Because of their focus on capital preservation, arbitrage funds tend to underperform the broad stock market. The Gabelli fund’s 4.6 percent annualized return ranks among the top five funds among its 19 peers over the last decade, according to Morningstar, though its performance trails the S&P 500 index by 3.7 percentage points over that time. The fund also underperformed the Vanguard Total Bond Market Index fund by 0.3 percentage points over that span.

Investors could also opt for the IQ Merger Arbitrage ETF. The fund’s assets are only $12 million, giving it a relatively high bid-ask spread of 0.87 percent. Its track record, an annualized 0.1 percent over the last three years, is spotty compared with the broader S&P 500 over the same time.

“The merger concept was just not resonating with investors at all” after the financial crisis, said Adam Patti, the CEO of IndexIQ, the company behind the ETF. The fund, which costs 76 cents per $100 invested, is up 2.1 percent since the start of 2013, compared with a 0.6 percent rise in the average market neutral fund.

BUYING THE TARGETS

Investors looking for potential takeover targets could go to published lists from the likes of Morningstar, which includes Chesapeake Energy Corp, Leap Wireless International, and Kohl’s Corp among its 2013 takeover ideas. Some financial firms publish their own versions as well. UBS includes luxury retailer Burberry Group PLC, information technology company Legrand SA, and grocer Sainsbury PLC on its European “M&A Watch” list.

The downside of this method is that simply appearing on the Morningstar list, which has included more than 70 companies in each of the last two years, often leads to a rally in shares. So if you fail to act the moment the list is released, you may pay more for a stock that fails to attract takeover bids.

For instance, six companies that appeared on the Morningstar list in 2011 saw their stock appreciate by at least 17 percent between the time the list was published and the time they accepted takeover deals.

This year, Kohl’s is up 4 percent since Morningstar published its list January 29, more than double the performance of the S&P 500 over the same time. The company’s strong cash flow and growth potential makes it attractive to private equity investors, Morningstar noted.

A more lucrative bet for investors is to screen for small to midcap companies with cash on their balance sheets and good levels of free cash flow. These are the metrics that private equity investors look for when deciding to make a deal, said Brian Frank, portfolio manager of the $14.9 million Frank Value Fund, who looks for takeover targets as part of his strategy.

“Private equity funds love to borrow money and then have a company pay off that debt, which is very difficult to do if it already has a lot,” he said.

Frank began his position in True Religion Apparel Inc, a $715 million market cap company behind the high-end brand True Religion Jeans, in August.

He was attracted to the company because of the cash on its balance sheet, which at one time amounted to 40 percent of its market cap. In October it announced it was putting itself up for sale and while it has not disclosed any bids, Frank expects True Religion to be acquired for about $35 per share, a 25 percent premium from its current price.

Small-cap fund managers insist they don’t focus on takeover targets alone when buying a stock. Bruce Aronow, a portfolio manager of the $1.2 billion AllianceBernstein Small Cap Growth fund, expects a handful of the roughly 100 companies in his portfolio to be acquired in any given year.

To become part of his portfolio, a company must be growing earnings faster than consensus estimates. That strategy has helped his fund return an annualized 12.5 percent over the last 10 years, or 4.2 percentage points ahead of the S&P 500.

“We like companies that are on their way to becoming large quickly, and those are the companies that tend to get bought out,” Aronow said.

(Reporting By David Randall; Editing by Jennifer Merritt, Lauren Young and Martin Howell.)

(Reuters) – Andrew Adams takes the Wall Street adage “invest in what you know” literally.

Adams, the Minneapolis-based manager of the tiny $62 million Mairs & Power Small Cap fund, invests all but a quarter of his portfolio in companies that are headquartered or do the majority of their businesses in the Upper Midwest. He estimates that there are about 500 small-cap companies that fit the bill in the six-state region that includes Minnesota, Wisconsin, Iowa, Illinois and North and South Dakota, compared with 2,000 companies in the total small-cap universe in the U.S.

“We like to invest in stocks in our backyard, because we know the history better than anyone else,” he said. “To me, it feels like a pretty big pool to fish from.”

It’s a quirky strategy that has nevertheless worked for the fund’s investors. Thanks to gains like a 53 percent jump in Nebraska-based hunting retailer Cabela’s and a 54 percent increase in Minnesota-based business services company Deluxe Corp, Adams’ fund gained 26.8 percent over the last year, making it the best performing small-cap fund among the 1,525 tracked by Lipper. The average fund in the category returned 10.7 percent over the same time frame.

Region alone isn’t enough to get into Adams’ portfolio of 44 stocks, of course. He looks for companies with durable competitive advantages that also have high returns on their invested capital. His portfolio ranges from commercial banks like Wisconsin-based Bank Mutual Corp to chemical makers like Minnesota-based Hawkins Inc. Adams aims to hold on to a company for 5 to 10 years, and emphasizes meeting with company management to get a sense of where the business is headed.

That long-term mentality makes Adams loathe to sell a stock, but he will do so if a company’s shares look extremely overpriced. He sold out of his position in 3-D printing company Stratasys last year, which recently moved its headquarter to Israel from Minnesota after a $1.4 billion merger with competitor Objet. The combined company’s stock is up 92 percent over the last 12 months and trades at 80 times earnings.

“We’re really excited about 3-D printing, but the valuation couldn’t justify holding onto it even assuming above average long-term growth potential,” Adams said.

He used the money from the sale – the stock returned 200 percent for the fund while Adams held it – to buy Minnesota customer parts maker Proto Labs Inc shortly after its February initial public offering. The company makes limited-run plastic or metals parts using 3-D printers and benefits from the 3-D printing trend by servicing commercial orders, while Stratasys focuses more on consumers, Adams said. Its shares are up 57 percent since the IPO and trade at 44 times earnings.

The fund’s Midwestern focus fits the philosophy of privately held Mairs and Power, which was founded in Minneapolis in 1931 and has long had a tilt toward investing in companies in the region. The small-cap fund, launched in 2011, is just the third fund offering from the firm and its first new fund since 1961. Its other funds are the $366 million Mairs and Power Balanced Fund, which is up 15.1 percent over the last year, and the $2.8 billion Mairs and Power Growth fund, which gained 19 percent over the same time period.

Adams’ own background also plays a role: he graduated with both a bachelors and masters in finance from the University of Wisconsin. Prior to Mairs and Power, he co-managed a small-cap fund at US Bancorp Asset Management in Minnesota.

Not every company he buys is headquartered in the Midwest. He bought shares in investment management software company Advent Software, which is based in San Francisco, because he couldn’t find a Midwestern company in the category that offered the same potential. And he recently increased his position in supercomputer maker Cray Inc, which has its headquarters in Seattle but has divisions based in Minnesota and Wisconsin.

Adams believes Cray has the potential to compete with International Business Machines in the so-called “Big Data” business of analyzing large and complex data sets. Already, its customer base includes the Mayo Clinic and the U.S. government. He began buying shares of Cray in February of last year; the company is up nearly 140 percent since then.

Adams also recently increased his position in one of last year’s underperformers, Minneapolis-based biotech Techne Corp. The company, which has fallen 4 percent over the last year, produces antibodies used in gene research.

The company’s shares were downgraded to underperform by Credit Agricole Securities and research firm CLSA in January. CLSA cut its target price to $70 from $77, in part because of the company’s ongoing search for a CEO after former chief executive Thomas Oland retired in November. The company trades at approximately $68 per share and a price to earnings ratio of 22.8.

Adams pins much of the stock’s underperformance to concerns that looming government spending cuts will mean fewer government-financed research studies – and fewer customers for Techne. “This is going to pass, and the long-term thesis is intact,” he said.

Investors in the Mairs and Power Small-Cap fund will pay $1.25 per $100 invested, a fee level that Lipper considers average. The fund yields 0.14 percent.

(Reporting by David Randall; Editing by Jennifer Merritt and Phil Berlowitz)

(Reuters) – In the mercurial world of stock market trends, predicting whether the market is favoring growth or value styles is an either/or situation.

Sometimes growth stocks, which tend to produce consistently higher earnings, dominate. Then they fall out of favor, as value stocks, bought at bargain prices relative to their potential market value, take the limelight.

The nature of the beast in the growth vs. value tug of war is that when big money managers conclude that growth stocks may be getting overpriced then it is time to look for bargains. Since institutions tend to move in a herd, a switch en masse happens almost simultaneously and billions flow into bargain-priced stocks over a period of months. Sometimes the buying lasts for years.

Indeed, the value shift appears to have gained some ground year-to-date through February 15, as the value ledger of the S&P 500 rose 7.3 percent compared to 5.4 percent for growth stocks, S&P reports.

“We do think that this is a trend that could have legs,” says Todd Rosenbluth, director of Mutual Fund Research for S&P Capital IQ, a market research company based in New York. “But it’s still early in 2013.”

The last major value cycle ran roughly between 2001 and 2008. That was in the wake of the dot-com implosion and recession of 2001, when growth stocks largely crashed and burned after the manic tech-bubble run of 1998 to 2001. In the recovery from the 2008 meltdown, though, growth stocks have largely dominated, as companies rebuilt their earnings streams.

Although you can make money in either market phase, the value cycle might benefit you better because it tends to step away from stocks that can be overvalued and due for declines. Unlike growth stocks near the peak of their popularity, value stocks often offer more upside potential.

Sometimes popular growth stocks like Apple, are burdened with unrealistic upside expectations and any disappointment in news or earnings leads to a sell-off. Since hitting a 52-week high of $705 last September, for example, Apple stock has seen a precipitous decline and has been trading under $500 of late.

While short-term trends can be misleading, some recent evidence points to a value upsurge. Large-cap value funds, according to Lipper, a Thomson Reuters company, gained 17 percent for the one-year period through January 31. That compares with 16.8 percent for the S&P 500 Index and 13.3 percent for large-cap growth funds.

It could be that the recent value returns are driven by heavy weightings in the financial sector, underdogs in recent years that experienced a comeback last year and rose more than 24 percent as a group. Or, maybe the tide is turning and large institutions are making a shift toward value investing.

Although no one really knows when a cycle makes a turn in real time – it is best to make this call through the rear-view mirror – consistently investing in value offers a way to grab bargain-priced stocks with slightly lower volatility and higher dividends than their growth cousins.

HOW TO INVEST

In considering value stocks, it makes sense to diversify across countries and the size of companies: large-, mid- and small caps. Index funds generally give you the broadest array.

For large companies, the Vanguard S&P 500 Value ETF, invests in more than 350 stocks found in the S&P 500 Value Index. The companies in this portfolio may not seem like value stocks, but are mostly household names such as General Electric Co, Exxon Mobil Corp and AT&T Inc.

It is also a good way to own the company run by Warren Buffett, Berkshire Hathaway Inc, which is a living testament to value investing; the fund has a 2.6-percent stake in the company. The Vanguard fund was up nearly 20 percent for the year through January 30.

Vanguard also has a Mid-cap Value ETF that tracks the MSCI US Midcap Value Index and holds companies like Mattel Inc and Seagate Technology PLC. It was up 18 percent over the same period.

For small companies, you will not encounter any brand names, but you may see some greater potential for appreciation. The WisdomTree International SmallCap Dividend ETF focuses on companies across the world that also pay dividends, which is a rarity for companies under $1 billion in market capitalization. The fund returned almost 20 percent over the annual period through January 30. and pays a 3.4 percent yield.

By employing a balanced approach, you could split the difference between growth and value funds – 50 percent each – or simply buy a fund that tracks an index with a larger number of stocks in it. The iShares Russell 3000 Value Index holds 10 percent of its portfolio in small caps, although it is still dominated by mega-caps such as Procter & Gamble Co and Chevron Corp. The fund gained 20 percent for the year through January 30.

(The author is a Reuters columnist and the opinions expressed are his own. For more from John Wasik see link.reuters.com/syk97s)(Follow us @ReutersMoney or here; Editing by Beth Pinsker and Nick Zieminski)

Neural implants are set to be revolutionised by a new type of graphene transistor with a liquid gate, say bio-engineers

The emerging technology of neural prostheses has the power to change what it means to be human. The ability to implant electrodes into the eyes ears, spine or even the brain has the potential to overcome degenerative disease, mend broken bodies and even enhance our senses with superhuman abilities.

But despite numerous trials of electronic devices implanted into the human body, there are still many challenges ahead. The problem is that most of these devices are based on silicon substrates which are hard, rigid and sharp. Those are not normally qualities that sit well with soft tissue.

Consequently, any small movement of these devices can damage nearby tissue and in the worst cases, form scar tissue. What’s more, the hot, wet and salty environment inside the body can damage electronic components, limiting their lifespan.

What’s needed, of course, is a flexible substrate that is also biocompatible with human tissue. Now Lucas Hess and pals at the Technische Universität München in Germany say they’ve found the ideal material–graphene. Today, they outline their plans for graphene-based neural prostheses and the experiments they’ve already done to test its biocompatibility.

Graphene is ideal because carbon “chicken wire” is only a single atom thick and therefore highly flexible. It is also held together by carbon bonds, which are among the most stable known to chemists. That means it should be relatively stable inside the human body.

But graphene has another advantage. Hess and pals have shown how it is possible to use it to make transistors that are gated by the solution in which the transistor sits. In other words, the natural body fluids that surround these prostheses will form an integral part of their operation.

So-called solution-gated transistors are much more sensitive to electronic changes in their environment than conventional silicon devices. “[Graphene-based] devices…far outperform current technologies in terms of their gate sensitivity,” say Hess and co.

These guys have begun to test graphene interfaces with various cells such as retinal ganglion cells, reporting that graphene has excellent biocompatibility.

Of course, working graphene-based neural prostheses are some way in the future.  But Europe recently announced an investment of €1 billion in graphene research over the next ten years. If that doesn’t buy some significant progress in this area, nothing will.

The lab developed key technologies that have advanced personal robotics, but its funding wasn’t sustainable.

By Jessica Leber on February 12, 2013

Willow Garage, a private laboratory that built a popular open-source operating system for robots, as well as the PR2, a capable robot for use by researchers, is rebooting itself. In a blog postpublished yesterday, CEO Steve Cousins said it will move away from developing new research technologies, and would “enter the world of commercial opportunities.”

Founded in 2006 by early Google engineer Scott Hassan to advance the frontiers of robotics, the Menlo Park, California, lab has spun out several companies and created software and hardware now in use around the world.

Because the facility was independent and under little pressure to pursue short-term products, one of its key contributions to the field was making it easier for robotics researchers to share and build on each other’s work. However, its own long-term funding model—beyond Hassan’s personal backing—was never clear (a one-armed PR2 retails for $285,000, and there are fewer than 50 in outside research facilities today).

By last year, Hassan had become CEO of Suitable Technologies, a Willow Garage spinout that is building telepresence robots for stay-at-home office workers (see “Beam Yourself to Work in a Remote-Controlled Body”). Now Willow Garage will attempt to become a self-sustaining company in its own right. “This is an important change to our funding model,” Cousins wrote.

To some, Willow Garage’s timing is perfect if it wants to fulfill its goal of having a wide-ranging impact on the personal robotics field, although there would likely be near-term funding challenges to support its talented pool of researchers and roboticists (see MIT Technology Review’s “35 Innovators Under 35”: Leila Takayama and Brian Gerkey). Autonomous robots have advanced in laboratories to the point where the PR2 can now fold laundry and fetch a soda, and industrial robots can work side by side to assist human factory workers. But the costs of these advanced robots are still relatively high, and the practicalities are clunky.

“I think Willow Garage has a lot of good technology … it’s now really the time to do business. We are really close to the situation we were in with personal computing, when the world switched from expensive mainframes,” says Dmitry Grishin, founder of Grishin Robotics, a $25 million New York investment fund for personal robotics companies. “If you want to make a technology big, you need to bring it to market,” adds Grishin, the cofounder and chairman of the Russian Internet giant Mail.Ru Group.

Willow Garage’s move away from creating open-ended R&D tools is, however, a disappointment to the robotics researchers and companies that use its software.

The Georgia Institute of Technology is, for example, using its PR2 to develop software and user interfaces for robots that could assist elderly people living at home. “They have been a key facilitator of collaborative infrastructure for robotics,” says Henrik Christensen, Georgia Tech’s director of robotics. “We have to figure out how this can be continued.”

Willow Garage wrote that it will “not diminish” its support for the nearly 50 PR2s in use today and was already in the process of transitioning oversight of its Robot Operating System to the Open Source Robotics Foundation.

How Willow Garage will become a self-sustaining business isn’t clear, nor for how long Hassan will continue to support the endeavor. A spokesman declined to comment on its plans beyond the information posted on its blog, other than to emphasize it was not shutting down. Willow Garage’s spinoffs include Suitable Technologies and a company called Industrial Perception, which is developing robots that might autonomously load and unload pallets and shipping containers. Its motto: “Providing robots with the skills they’ll need to succeed in the economy of tomorrow.”

The sight-restoring implant made by Second Sight is the most advanced prosthetic to date.

By Katherine Bourzac on February 15, 2013

A prosthetic device that can restore some sight to the blind has been approved by the U.S. Food and Drug Administration. The company that makes the device, Second Sight, based in Sylmar, California, can now market the retinal prosthetic to patients with advanced retinitis pigmentosa, a degenerative eye disease that can cause blindness. This is the first approved treatment for the disease in the United States.

“This enables people who are completely blind to see enough to improve their mobility,” says Mark Humayun, a professor of biomedical engineering at the University of Southern California in Los Angeles who has been developing the device for the past 25 years. “It allows people to make out the sidewalk and stay on it without twisting an ankle, see unexpected obstacles like parked cars, make out a table, see someone coming through a doorway,” he says. Some patients can make out large letters, but the main function of the implant is to give patients enough sight to restore mobility.

The device, called the Argus II, has three main parts: a glasses-mounted video camera; a portable computer; and a chip implanted near the retina. The video camera sends image data to the computer, which is worn on a belt. The processor converts the image data into electrical signals that are beamed to a chip implanted near the retina. The signals are then sent to an array of 60 electrodes that stimulate the retinal cells. These electrodes essentially do the work of the light-sensing cells that have degenerated. So far, the system can’t help patients make out different colors, but it can provide them with enough visual sensation to sense the outlines of things nearby.

The Argus II was approved for use in Europe in March 2011 (see “A Bionic Eye Comes to Market”) and has been implanted in 30 patients in a U.S. clinical trial that started in 2007. The company has not announced its pricing structure in the U.S., but the devices retail for $100,000 in Europe, a price based on the expectation that the implant will last 10 years. Humayun says surgeons around the country, including those in Los Angeles, San Francisco, Philadelphia, and Baltimore, have been trained in the surgery to implant the device.

An estimated 100,000 people in the United States suffer from retinitis pigmentosa, a disease that slowly kills off the light-sensing cells in the retina, starting with the rod cells responsible for periphery and night vision, and eventually the cone cells, which provide central vision. The result is a gradual tunneling in of the vision, leading eventually to complete blindness. Humayun estimates that there are about 2,000 Americans in this late phase of the disease that would benefit from the device.

“This is a really exciting day—this is the first approved treatment for retinitis pigmentosa,” says Jacque Duncan, professor of clinical oncology at the University of California, San Francisco. There are some drugs in clinical trials, and there is some evidence that vitamin A slows the disease’s progress, but until now there has been no way to restore lost vision to the blind. “It’s very exciting to reach this point.”

Existing devices like pacemakers and cochlear implants also use electrodes to interface with the body. But none are as complicated as the retinal prosthetic, says Humayun. Cochlear implants use up to about 20 electrodes; the Argus II uses three times as many, all of which have to be wired up in a compact, biocompatible case that won’t overheat, and can tolerate the frequent movements of the eye. “This is the most complicated medical implant there is, in terms of the number of electrodes,” says Humayun.

Humayun says future software developments will expand the capabilities of the Argus II. The company is developing software that will enable the device to stimulate patients to see color by providing electrical signals at different frequencies.

Bitcasa’s limitless storage service is a cool idea, but it needs work.

By Rachel Metz on February 18, 2013

Imagine never having to worry about running out of space on your laptop, tablet, or smartphone for pictures, videos, or documents; or even having to remember where you saved a file. It’s a wonderful idea and we’re getting closer, but we aren’t there just yet.

I got a glimpse of this future while trying the latest service from Bitcasa, a Mountain View, California-based startup that wants to take cloud computing to its logical conclusion: allowing access any file, any time, no matter where you are, so long as you have Internet access. (Bitcasa does cache a number of your files on your machine so the files you use the most can be viewed offline.)

Previously in an open beta, Bitcasa left that designation behind this month. The company also announced an updated Mac application, an iOS app, and the arrival of a “freemium” model: anyone can sign up for the service and get 10 gigabytes of free storage, or pay $10 per month to upgrade to the infinite storage model (or $99 for the year, though the price is $69 for that upgrade from now until the end of February).

Several companies provide easy-to-use cloud storage. Dropbox, one of the most popular, offers users two gigabytes of free storage and its plans start at $10 per month for 100 gigabytes, or $99 per year. That sounds reasonable, but in America, we like our cloud storage capacity like we like our fast food: bigger. And nothing is bigger than unlimited, right?

With that in mind, I decided to test Bitcasa’s Infinite service on my own MacBook Pro, a Dell laptop I use for work, and my iPhone.

The company’s file-storage utopia is a great idea, especially as we increasingly switch between laptops, desktops, smartphones, and tablets, and gain reliable access to fast, wireless Internet. But to get us to this digital Shangri-la, Bitcasa has plenty of work to do.

From the user’s perspective, Bitcasa is fairly simple. You install the software on your computer, and, much like when you slide a memory stick into a USB port, a little green icon pops up called Bitcasa Infinite Drive. In addition to offering software for PCs, Macs, and iPhones, Bitcasa offers an Android app, an app for Windows 8 and RT machines, and even an extension for Google’s Chrome Web browser.

This drive sits on your computer desktop, and you can copy files to it by dragging and dropping them into it, or save them directly to it so they’re stored there and need not be kept on your computer.

You can also mirror folders, which means that Bitcasa will copy the contents of a folder to your drive, but you’ll also keep the items on your computer so you can use them when you aren’t connected to the Web. Bitcasa will keep track of any changes you make to files in these folders, and keep them synched with the cloud-based version. If, like me, you’re horrible at remembering to back up your files, this is an easy way to do so.

This simplicity is the coolest thing about Bitcasa: It’s easy to figure out how to add files to your cloud, and find them once they’re in there (though keep in mind that it can take a long time to upload large files). All data you upload is automatically encrypted, too, which should help reassure those concerned about storing sensitive data elsewhere.

It’s also very easy to share files with others—you create a link to a file or folder on your computer or on Bitcasa’s website, and e-mail it to your friends.

Another neat Bitcasa feature is the ability to see older versions of your files. This is especially useful if you’ve worked on a project over time and want to go back and see an earlier version, or if you delete a file and then realize you actually need it. You can access this through a Web interface, which I found a pleasant enough way to view Bitcasa files, despite its irritating white-text-on-a-black-background theme.

Unfortunately, in practice, I experienced some difficulties with the service. Initially, it was very slow to show changes on my different devices, be it to files I modified or new files I added to folders in my infinite drive (40 minutes to add a large folder of notes files, for example). I often felt it would have been faster to just e-mail these things to myself. This improved, however, after I downloaded an update to the software.

But files didn’t always go where they were supposed to when uploaded, such as a slew of images from an SD memory card that somehow ended up in the main Bitcasa drive, rather than in the folder with the rest of their batch.

There was another problem, though admittedly I couldn’t determine if this was the fault of my machines, Microsoft Word, or Bitcasa itself: Though I tried repeatedly, I couldn’t upload a Word document to Bitcasa on my Mac, make changes to it on my PC, save those changes to Bitcasa, then open it up again on the Mac (or vice versa). Somehow, the files always got corrupted or disappeared altogether. I had someone try replicating the problem on a Windows 8 machine and a Macbook Pro and they didn’t experience the same issue. I asked Bitcasa CEO and cofounder Tony Gauda about this, and he said his team would try to reproduce it internally but he didn’t think it was something they had seen so far.

I also had problems with the iPhone app. I briefly used a test version, then switched to the first version Bitcasa rolled out publicly. This one crashed nearly every time I opened it (I’m not the only one this has happened to, according to reviews in the App Store). An updated version worked better, allowing me to view photos, videos, music, and other files stored with the service, but it seemed slow to access files.

Two standout features here were the ability to download files to the iPhone so you can view them offline, and the capacity to connect your camera to Bitcasa so it will automatically upload a copy of any video or photo you take to the service. There’s no way to upload other files from the iPhone, though, which you can do on an Android phone with Bitcasa.

Bitcasa’s basic premise is a great one, and it’s clearly where computing and data storage are heading. First, though, it will need to work out the kinks.

(Reuters) – Investors worldwide pulled $3.62 billion from U.S. stock funds in the latest week, the most in 10 weeks after taking a neutral stance the prior week, data from EPFR Global showed on Friday.

The outflows from U.S. stock funds in the week through February 13 were the biggest so far this year. Investors still gave $1.81 billion in new cash to stock funds in the week ended February 13, the fund-tracking firm said, as demand continued for emerging market equities.

January was a strong month for stock funds, which reaped more than $18 billion in new cash in the first and last weeks of the month. Mom-and-pop retail investors regained confidence in the funds over the month, but started taking profits last week after the S&P 500’s monthly rise of 5.1 percent.

“Some of the momentum has slowed,” said Rick Meckler, president of investment firm LibertyView Capital Management in New York. “People are still taking profits,” he added.

The demand for equities went toward emerging market stock funds, which pulled in $2.44 billion in new cash. That amount still lagged the previous week’s inflows of $3.42 billion.

European stock funds lost fans for a second straight week this year with outflows of $38 million after investors pulled $264 million from the funds the prior week.

The S&P 500 rose just 0.5 percent over the weekly reporting period. Data showing that the U.S. trade deficit narrowed in December and strong international trade in China and Germany boosted sentiment.

Concerns over the euro zone debt crisis were rekindled, however, after European Central bank President Mario Draghi said the region would face further economic weakness.

Bond funds worldwide overtook equities with inflows of $2.58 billion, which was more than double their gains from the prior week. Investors who shunned U.S. stocks sought the nation’s bond funds, and gave $2.28 billion in new money.

“I think the immediacy of the ‘great rotation’ is way too early,” said Margie Patel, managing director at Wells Capital Management, on speculation last month that investors were moving out of bonds and into stocks.

“Fixed income investments have been too good of an investment for too many years for investors to just reverse course,” Patel added.

Emerging market bond funds grabbed $1.1 billion in new cash, which was roughly the same amount as in the prior week. European bond funds, however, suffered outflows of $1.19 billion, the highest in over a year, according to EPFR Global.

Funds that hold risky high-yield “junk” bonds had outflows of $207 million. Redemptions were milder than the previous week, when investors pulled $1.33 billion out of the funds.

Patel of Wells Capital said that outflows from high-yield bond funds are in response to yields on the safe-haven 10-year Treasury touching 2 percent in recent weeks, and that the funds will recover their inflows after Treasury prices rise. Friday, benchmark 10-year notes were last down 9/32 in price to yield 2.04 percent.

(Reporting by Sam Forgione; Editing by Bernadette Baum and Martin Golan)

(Reuters) – Inventors based in the United States led the world in nanotechnology patent applications and grants in 2012, according to a new study by law firm McDermott Will & Emery.

Nanotechnology involves manipulating matter that’s measured at the tiny “nanometer” length level. The diameter of a human hair is between 40,000 and 60,000 nanometers, said Valerie Moore, a patent agent and one of the authors of the study.

Nanotechnology patents come into play in everything from aerospace to medicine to energy, the study noted. For example, the technology can be used to incorporate antibacterial material into wound dressings, to increase the strength of car parts while decreasing their weight, and to enhance paint colors.

U.S.-based inventors accounted for 54 percent of the nanotechnology patent applications and grants reviewed in the study, followed by South Korea with 7.8 percent, Japan with 7.1 percent, Germany with 6.2 percent and China with 4.9 percent.

The study also looked at the geographic location of the owner of the nanotechnology patents and proposed patents. If an inventor works in the Silicon Valley office of South Korea’s Samsung Electronics Co, for instance, the U.S. is home to the invention, but the South Korean employer might own the patent.

McDermott’s intellectual property practice includes more than 200 attorneys and patent agents, and is one of the top ten law firms for nanotech patent and applications filings, according to information provided by the firm.

McDermott partner Carey Jordan noted that the percentage of patents issued to U.S.-based entities is not quite as high as the 54 percent of nanopatents with U.S.-based inventors. About 45 percent of the nanotechnology patents in the study were assigned to U.S.-based entities.

The study examined published U.S. patent applications, patents granted by the U.S. Patent and Trade Office, and published international patent applications that had the term “nano” in the claims, title, or abstract. Nanopatent applications were included to best quantify innovation occurring in nanotech, the study’s authors said.

The number of nanotechnology patents has grown continuously since the early 2000s, the study said. Between 2007 and 2012 the total number of U.S. patent applications, U.S. granted patents and published international patent applications grew from about 14,250 to almost 18,900.

The United States, the European Union, as well as Japan and South Korea, have increased funding for nanotechnology education and research since 2000, the study said.

Computer and electronics companies garnered the most patents, with International Business Machines Corp and Samsung topping the list. The fields of chemistry and biological sciences, which include medicine and agriculture, were next in terms of the number of nanotechnology patents.

Other leaders in technology patent innovation include the University of California, Xerox Corp, the Massachusetts Institute of Technology, and 3M Co.

(Reporting By Erin Geiger Smith; Editing by Nick Zieminski)

(This story was corrected to fix dateline and name of law firm in the first paragraph)