Hi guys,
I gave it a little thought and to me logically, obviously, factually etc. the best long term investment (at least 20-30 years) in the world is in water. I might have been slightly inspired by the ending of The Big Short where it's revealed that Michael Burry invests mostly in water - he is also short in TSLA :).
Specifically I am talking about investing in companies dealing with the desalination of seawater business.
Facts supporting my claim/analysis:
Human population doesn't stop growing and the planet is already overpopulated with around 2-3 billions. This only means more and more water consumption.
Humans are 50-60% water. 2 days without water and you die. Long term investments like Bitcoin and Gold cannot save you from dehydration if there is no water to buy/drink. If two commodities (not essential to keeping you alive) have trillions of $ of market cap, imagine what market cap could the drinkable water reach if it becomes globally scarce.
Still most water we use is freshwater found in nature - this water is exponentially decreasing due to the industry demands, the pollution and the increase in population. Global climate change probably helps as well.
Literally almost everything costs thousands of liters of water to make but we don't notice it because there is still a lot of free/cheap and easily accessible water for use. A cup of coffee takes 150 liters to produce. A kilogram of meat takes 5000 - 20000 liters. 1 kg of chocolate takes 17 000 liters. Sure not all of that is drinkable water but it's not dirty water as well so water treatment plants will benefit from the need of such water.
Desalination of seawater is the only efficient, fast and cheap way to turn most of the planet's water into drinkable water. The freshwater sources took probably thousands of years to form and we almost depleted them mostly in the last two centuries!
The desalination business is growing fast and is still very small which looks like a great investment opportunity. Market cap is just $32 billion. The global desalination capacity increased by 65% between 2010 and 2015 without any major global water events. Even in California it's already a perpetual water crisis without an easy solution. With the fast depletion of water everyone around the world will be forced to look for alternatives and they will all turn to desalination plants as there is simply no alternative.
At present there are 35 desalination plants only in the UAE. They have no other efficient ways to get potable water as there are simply no freshwater sources around.
How to invest?
The only almost perfect company I managed to find is CWCO (Consolidated Water). I have stocks in it but I cannot make a very good recommendation as I haven't discovered alternatives and I might be misleading potential investors. I call the company almost perfect because it deals with everything related to the business. But one issue is that currently it heavily relies on tourism due to the location of it's plants. Do you know of other 100% desalination companies?
Most of the currently available investments in water are overall a joke - water ETFs/indexes contain mostly water supply/utility/sewage companies and/or companies which use a lot of water which is very non optimal if one expects the price of water to increase in time. Think about it. If you know that gold will increase in price would you invest in a company which finds gold or in one which sells shovels for digging of gold (and other minerals)...
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