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- Vital to everything you do
- Don’t overlook this opportunity
- A question that you need to answer
What is the cheapest commodity?
I’ve talked about natural gas, and how extraordinarily cheap it is. In
the April 5th issue of the Resource Prospector,
I said that buying natural gas at current prices is like "buying gasoline
for 48 cents a gallon."
I’ve talked about coal too – and why I think it’s still
undervalued. We’re going to be using more and more coal every year, and
so are
We can’t escape this trend no matter how much we’d like to.
And I’ve mentioned that while I’m still super-bullish on gold,
I think silver can rise much higher, much faster in the near term.
I’ve made the case for these
commodities and others in past issues of the Resource Prospector,
and I still think these trends are extremely strong.
But
there’s one commodity I haven’t talked about, indeed, that no one is talking
about – and it’s still as cheap as it’s ever been.
And more importantly, it
will never go out of style. Scientists call it "the universal
solvent" for its unique ability to dissolve both acids and bases.
It’s also used by oilmen to help pump the last barrels of oil out of a well.
Natural gas producers use it to fracture reserves to release additional
gas.
It’s a vital component of
every electricity turbine, every nuclear power plant, every hydraulic
dam. It’s used to make clothing; it’s vital for food production and essential
to life throughout the planet.
It’s the world’s most
popular beverage.
You know
it as water. And you’ve probably been told all these facts before, that
97% of it is saltwater, and therefore undrinkable. You might even have
heard that much of the remaining 3% is locked up in glaciers and ice caps on
the north and south poles.
You probably also know that
water, even the somewhat rare, safe-for-drinking variety is extremely cheap.
According to the American Water Works Association, tap-water costs the
average American less than a penny a gallon.
What you might not know is
that you can easily invest in water. There are places in the world, most
notably
where the population is growing so fast that they have to throw billions of
dollars at this resource just to ensure the bare minimum of their water needs
will be met in the next 10 years.
That’s why the companies that treat water to make it safe to drink, and
safe to dispose of, are compelling investments. In fact, depending upon
your perspective, the case for water could even be stronger than the case for
oil, gold, coal or any other commodity. While I could get by for a while
without oil, I haven’t got a shot without water. I’d gladly trade my bottom
dollar for a gallon of water if I was dying of thirst.
But
it’s not just drinking water that’s in demand. Water demand is growing
for use in agriculture, industry, cooking, energy production – the list goes on
and on. And we use a lot of it. While you may only drink half a
gallon a day, you used around 25 gallons during your last shower. And it takes
1,857 gallons to produce a pound of beef.
Regardless of your feelings
on global climate change, pollution, or any of the apocalyptic scenarios
promoted by the zaniest of environmentalists- you have to ask yourself:
Will
there be more drinking water tomorrow, or less?
I don’t put too much stock
in the idea that the world will end tomorrow because of manmade pollution, but
I do think that a growing population coupled with even moderate amounts of
groundwater pollution simply means that more people in more places will have
less access to clean drinking water.
The problem (and implicit
benefit) is that most people, myself included, really just can’t get too
excited about investing in water. I took a 20 minute shower this morning,
and I’m thinking about washing my car this weekend. Water is so plentiful
where I live in
that many people do nothing but complain about the water on their
property. We’re just coming off of mud-season, a time when the snow and
ice in the mountains melts, and many non-paved surfaces are somewhat submerged
in mud.
So it’s tough to get amped
up about investing in something so common. But we should invest in
water for all of the reasons I’ve laid out in this issue. And while I
have your attention, I hope that you take the opportunity to just do it.
How?
Right now there’s a water
company in the SmallCap Investor Pro portfolio that specializes in
wastewater treatment in
It is a small company, but there’s some recent good news that makes for a more
exciting entry point for this stock. Yesterday the Wall Street firm Piper
Jaffray just initiated coverage on the company. Typically, when a firm
like Piper Jaffray initiates coverage, it’s a good sign for the stock. It
brings more attention to the company, and can have a domino effect as more and
more investors and institutions buy up shares. Click here to get more information on this water company
and how to become a subscriber to SmallCap Investor Pro.
Good investing,
Kevin McElroy
Editor
Resource Prospector
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