Twelve years ago, at the infancy of the current bull market in gold, a small group of folks started buying up gold and gold securities. They didn’t ring a bell or tell their friends. They probably felt a little foolish doing so. They might have felt a little crazy; gold had been in a two-decade bear market.
Today, there’s a commodity that’s commonly used, extremely cheap and arguably in a 50- or 60-year bear market. It’s a commodity that people probably don’t even think about as very investment-worthy – but it’s completely vital to the modern world ... significantly more important than gold even. And I’m going to tell you how to invest in three companies involved in this commodity today that should see strong gains in the coming years, as well as solid dividends in the meantime.
Is buying now too early? I can’t say for sure. But what I can say is that a bull market in this commodity is as inevitable as the tides -- perhaps literally so.
In case you haven’t guessed, I’m talking about water.
I’m sure you’ve heard lots of claims about freshwater resources being decimated in California, Florida, and certainly Asia.
It’s true. According to the World Economic Forum, “analysis suggests the world could face a 40% shortfall between water demand and available freshwater supply by 2030. Many countries are already extracting groundwater faster than it can be replenished (Mexico by 20%, China by 25%, and India by 56%)."
I don’t believe that we’ll face these types of shortages; water is way too important. To account for the difference, you, me, the Chinese and everyone else will pay through the nose to get access to fresh water. What other choice do we have? I might be able to ride my bike to work if gasoline gets too expensive, but I’ll sell my bike and my car (and probably my gold and silver) in order to keep the fresh water flowing to my house.
The problem right now, and why you’re not seeing ads about investing in “blue-gold” on TV or in newspapers, is that water is still relatively plentiful. And it’s likely to remain plentiful for at least the immediate and foreseeable future. But that’s why it’s a great time to invest. When things are cheap, ignored and plentiful, you should be a buyer – especially when you know the trend is likely to reverse.
So today, I want you to think about becoming an investor in these boring, ignored cheap water companies. All three companies are basically just water utilities that provide drinking water and manage wastewater throughout North America.
I probably won’t be talking about water again anytime soon. It just doesn’t build the kind of excitement that other products do. But I think if you make a point of averaging into these companies, and other similar companies, you’ll have a nice chunk of your portfolio in an asset that should experience a long-term uptrend.
I’ve listed the companies below from largest to smallest. One is a large-cap, multi-regional firm, and the other two are small-cap, regional companies. Otherwise, they’re nearly identical in every other way. They all pay dividends between 3-4%. They all sell for between 18-19 times trailing earnings. And they’re all the boring kind of utility that pays and grows dividends, year after year.
If you’re looking for the next, huge, inevitable bull market, take a closer look at the companies below. Buy them early and often, collect the dividend, and patiently wait for the inevitable.