Investing in Water
Editor’s Note: Today’s article comes to us from Nick Hodge, editor of Green Chip Review and Alternative Energy Speculator. He’s been paying close attention to mounting water problems, and is going to share his insights with us in a new series called Blue Gold. Enjoy.
Water is the next great bull market. You heard it here first.
Evidence of that counterintuitive statement abounds. It just comes at us piecemeal, so it’s hard to put it all together.
You may have heard of the drought conditions in the Southwest and Southeast. Or you may have heard of depleting snowpacks that feed California with freshwater. Or you may have even seen headlines about diminishing aquifers in Texas, or dire water warnings in the Middle East or Africa or… well, you get the point.
But it’s hard mentally to translate all those murmurs together into a roar. . . to understand really the severity of the problems, and to understand the giant scope of the related profit opportunity.
Take this morning, for example. . .
Water Problems Hit Home
I went to the dentist this morning for a regular cleaning and found myself in a conversation with one of the hygienists.
We were making small talk about our families and interests, and she eventually told me about a cousin of hers who recently bought a lake house in Tennessee.
I learned her cousin bought the beautiful home on the shores of Lake Douglas early last year. "Great investment," she said, "got a great price."
The only problem: no water.
That’s right. What was a waterfront lake home early last year, complete with front yard dock access, now has a wide sandy beach where water once lapped against their dock pilings.
Now this came as no surprise to me. . . I’ve been writing about water issues for some time now and have cashed out numerous winners in the water sector.
But you should’ve seen the surprise on the hygienist’s face as she told me about it, almost angry— describing how they couldn’t even put their boat in last year.
She was even more shocked as I went on to tell her about the serious drought issues in the Southeast — they’re so bad Georgia and Tennessee are doing legal battle over their border to decide who gets access to freshwater contained in the Nickajack Reservoir.
I covered that story in a piece about U.S. water shortages well over a year ago. So I’m familiar with the water problem. (In that article I said Gorman Rupp (NYSE: GRC) was a bargain at the time, below $30.00. It ran to $46.00 in the next few weeks.)
But back to Lake Douglas.
My dentist visit this morning renewed my interest in that part of the country, so when I got into the office I did a little digging.
It didn’t take long to find an article from a local paper that described the problems at hand. According to that article, local reservoirs in Tennessee are down "more than 20 feet" and are suffering from drought conditions "that extend back four years."
Here’s recent photo of Lake Douglas that illustrates the severity of the issue (If you look closely, you can see where the waterline should be on the cliffs in the distance):
I can just see her cousin’s dock extending out into the sandy abyss.
But that’s the thing about water problems. . . even though we hear about them all the time, we don’t acknowledge them until they hit home.
Water Issues: Coming to Two of Three People Near You
Of course, water scarcity isn’t being monopolized by Tennessee. As I said earlier, you hear about water problems all the time.
Dry forests in California, lawn watering restrictions in Florida, pollution in the Great Lakes. All water problems with potentially profitable solutions.
Even in North Dakota, where water is currently overabundant, lack of adequate infrastructure is causing millions of dollars worth of damage. Particulate and sediment runoff, coupled with the flood’s impact on water treatment facilities, means their water supplies will most likely be worse-off after the flood than before.
Make no mistake, water issues are a slumbering giant. They will wreak havoc and create fortunes.
And that’s the point of this series, Blue Gold.
You see, about one third of the world’s population currently live in areas that are water-stressed.
In less than 20 years, that number will rise to two thirds.
That means there will only be enough water for one household out of yours and your two neighbors’.
Changing the trajectory of that forecast will cost trillions, as world governments, agencies, and corporations come together to combat the problem.
Indeed, water will be the new hot commodity.
IBM is getting in on it. Google has expressed interest. Oil companies are busy securing water rights to ensure they have enough to continue drilling. CNN is even doing a special series on it, so you know the issue is gaining traction. . . as well as marketability and profitability.
It’s a blue gold rush.
Over the next few weeks, I’ll spend some time covering the numerous challenges and opportunities about to emerge in the water industry.
From decaying infrastructure, to rising population, pricing mechanisms, and desalination. . .
I’ll give you a thorough understanding of the severity of looming water problems and the insight you’ll need to profit from them.
Call it like you see it,
Nick
P.S. As I said, I’ve been covering the water industry closely for the last two years. And readers of the Alternative Energy Speculator have been translating this in-depth knowledge into easy gains. From infrastructure specialists to pipe rehabilitators, we’ve realized numerous winning water plays and are in position for many more. Use the Blue Gold series for all it’s worth, but join Alternative Energy Speculator to start profiting today.