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Investing in Water Stocks 101

The World's Most Important Commodity

Written by Luke Burgess
Posted June 9, 2016

Last week, I was up on my soapbox urging you to own gold. But after it moved over 5% higher in the past seven days alone, it's time to just sit back and watch our money grow.

As I mentioned to you last weekend, I think we'll have a great selling opportunity for gold and precious metal stocks next week. And I'll get back to you on that selling opportunity when the time comes. But in the meantime, I want to take some time to talk about a more important commodity: water

Gold is nice to have. But water is absolutely vital.

All life on Earth is dependent on water. And there simply is no other alternative.

We often take clean drinking water for granted. But the truth is, in most parts of the world, clean water is a very scarce resource.

Scientists estimate the total mass of the world's water at 1.4 quintillion metric tonnes. But less than 1% of that is suitable for drinking.

And as the world population continues to grow at an unprecedented rate, that small cache of clean water is rapidly drying up.

According to the United Nations, water usage is growing at twice the pace of population! If consumption rates continue, the World Economic Forum estimates there will be a 40% global shortfall of water supply in just 15 years.

Right here in the United States, it's estimated that more than one million miles of water mains are in place. And although new pipes are always being added to expand service areas, drinking water systems degrade over time.

Especially in the country’s older cities, much of the drinking water infrastructure is old and in need of replacement. In fact, some pipes even date back to the Civil War era!

To address the problem here and around the rest of the world, governments will need to spend trillions on water supply and infrastructure projects — creating what I believe will be one of the single greatest investment opportunities of the 21st century.

There are roughly 400 water-related companies around the world, many of them publicly traded. And most appear to be set for profit as clean water becomes scarcer.

The Energy and Capital team has previously mentioned to you some of our favorite water infrastructure stocks. These included Xylem (NYSE: XYL), the top “picks and shovels” play of the water industry, and Veolia Environnement SA (ADR) (OTC: VEOEY), the world's largest supplier of water services.

And over the next several weeks, we plan to bring you several different water investing ideas.

My colleague Keith Kohl just put the finishing touches on a brand new water investing report, which he will be releasing to Energy and Capital readers very soon. So be on the lookout for that.

Until then,

Luke Burgess Signature

Luke Burgess
Energy and Capital

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