Mark Situ

How to Invest in Water

Mad Hedge Fund:

Thanks for your reply, which is a great complementary to my original post.

I think water infrastructure and some water ETFs are also great water investment vehicles. I will put more focus on these in my other posts.

This is my first post at SA and hope to attract more meaningful discussions here. Except sector overview, I will post some individual stock analysis.


On Jul 06 11:42 AM Mad Hedge Fund Trader wrote:

> Thanks for the names. If you think that the upcoming energy shortage
> is going to be bad, it will pale in comparison to the next water
> crisis, so investment in fresh water infrastructure is going to be
> a recurring long term investment theme. (See my earlier efforts to
> get you into the water space at www.madhedgefundtrader...).
> One theory about the endless wars in the Middle East since 1918 is
> that they have really been over water rights. Although Earth is often
> referred to as the water planet, only 2.5% is fresh, and three quarters
> of that is locked up in ice at the North and South poles. In places
> like China, with a quarter of the world’s population, up to 90% of
> the fresh water is already polluted, some irretrievably so. Some
> 18% of the world population lacks access to potable water, and demand
> is expected to rise by 40% in the next 20 years. Aquifers in the
> US, which took nature millennia to create, are approaching exhaustion.
> While membrane osmosis technologies exist to convert sea water into
> fresh, they use ten times more energy than current treatment processes,
> a real problem if you don’t have any, and will easily double the
> end cost to consumers. While it may take 16 pounds of grain to produce
> a pound of beef, it takes a staggering 2,416 gallons of water to
> do the same. The UN says that $11 billion a year is needed for water
> infrastructure investment, and $15 billion of the US stimulus package
> will be similarly spent. It says a lot that when I went to the UC
> Berkeley School of Engineering to research this piece, most of the
> experts in the field had already been retained by major hedge funds!
> At the top of the shopping list to participate here should be the
> Claymore S&P Global Water Index ETF (seekingalpha.com/symbo...),
> which has appreciated by 32% since I first brought it up. You can
> also visit the PowerShares Water Resource Portfolio (seekingalpha.com/symbo...),
> the First Trust ISE Water Index Fund (seekingalpha.com/symbo...),
> or the individual stocks Veolia Environment (seekingalpha.com/symbo...),
> Tetra-Tech (seekingalpha.com/symbo...), and Pentair (seekingalpha.com/symbo...).
> Who has the world’s greatest per capita water resources? Siberia,
> which could become a major exporter to China in the decades to come.