I’ll get to my market update in a few minutes. But first, did you see the cover story of U.S. News & World Report last week? I hope so. It confirmed what I told you more than three years ago!
The headline of the main article: “Why You Should Worry About Water.”
It’s about the world’s growing water crisis, which I first alerted my subscribers to in the August 2004 issue of the Real Wealth Report.
The facts …
Fact #1: The United Nations says two-thirds of the planet could soon suffer a shortage of this amazingly precious natural resource.
In China, an estimated 500 million people go without access to clean water every day.
In India, the crisis is even worse. Over half the cities in India are suffering from a shortage of potable water. They have essentially become nothing more than cesspools, causing tens of thousands of men, women and children to die every year.
Even Australia, a country loaded with natural resources, is being hit hard by water shortages. So much so that a 10-year, $10 billion national spending bill was introduced this year in Sydney.
Globally, every 45 seconds of every hour … of every day …
a child dies from lack of potable drinking water
Including adults, an estimated 1.1 BILLION people in the world now live without access to clean drinking water.
According to the World Health Organization, more than 4 billion could be living under stressful water conditions by 2050.
This is a problem. A big one. So much so that Fortune magazine recently stated that “Water promises to be to the 21st century what oil was to the 20th century: The precious commodity that determines the wealth of nations.”
Fact #2: Governments around the globe are about to spend nearly $1 TRILLON trying to solve the shortage. So they’re aware of the problem — acutely aware. That’s especially true in China, where hundreds of billions of dollars will be spent.
And unlike the oil crisis, the water crisis can be solved. Some of the top solutions include:
- Water purification
- Water supply and distribution
- Wetlands management
- Coastal engineering
- Erosion and sediment control
- Groundwater hydrology
- Storm water control and treatment
- Sewage and wastewater treatment
- Ocean water desalination
As you can see, the water crisis can be attacked on several fronts, from pollution control to ocean desalination. That means there are going to be loads of companies that can profit from it.
Don’t get me wrong: I’m not asking you to profit from the world’s growing water crisis at the expense of others. Instead, I’m suggesting that one of the best ways to solve a problem is to invest in companies that have made it their mission to solve unique problems like water shortages.
With that in mind …
Fact #3: There are only a handful of companies that are positioned to reap the windfalls.
Sorting them out to determine which of the water companies to invest in takes some digging and studying. Just being in the water industry isn’t enough to ensure that a company is a good investment.
In my Real Wealth Report, I’ve identified three of the companies that I think are “MUST OWNS” for any investor RIGHT NOW. I call them my “Blue Gold Recos” — for obvious reasons …
Blue Gold Recommendation #1:
A $380 Million Company Headed for $1 Billion
This water industry specialist is my top pick in the industry. It operates all over the world, and is active in filtration, water engineering, purification, delivery solutions, and more.
This small company is by far the biggest potential winner in the world’s looming water crisis. It is in more places around the world then companies 10 times its size. It has more technology, more patents, and more engineering experience than just about any other water company out there.
It manufactures the highest quality activated carbon filtration granules on the market today. The powder is used in water filtration all over the world, from small filters that you add to your kitchen faucet to giant filtration plants used by municipalities around the world.
It’s a tiny company — for now. Total market cap is just over $380 million. And in my opinion, its share price is dirt-cheap, trading at just over 2.5 times book and more than 1 times annual revenues. In the next two years — three max — I expect this company could easily be a $1 billion organization — an easy TRIPLE.
Blue Gold Recommendation #2:
Water Company With Political Ties To Beijing!
This water company does it all: Water purification, supply and distribution, engineering, hydrology, sewage and wastewater treatment, saltwater conversion, emergency water management and more!
It has a solid balance sheet and hardly any debt. Its earnings are rising, and it’s signing new customers virtually every week.
Plus, the company is politically connected in many of the markets it does business in. That includes Beijing, where Chinese authorities are spending an estimated $235 billion over the next five years to fix that country’s water problems.
I don’t have to tell you what a huge benefit it is to have connections to the government of China, the most populated and fastest-growing economy on the planet.
In my book, the profit potential in this company’s share price is an easy QUADRUPLE in 12 months, or less.
Blue Gold Recommendation #3:
Potable, Portable Water For When
Natural Disasters Strike A Country
This water company is small but growing. Its products are showing up all over the world as governments big and small, and even small villages, place orders for the company’s portable water filtration stations.
It’s hard to believe, but do you know what the biggest problem leading to the greatest loss of life is when a natural disaster strikes? The lack of clean potable water!
This company specializes in getting water there, on the scene of disasters, in 24 hours or less. Its technologies and products are starting to be embraced by local officials and authorities all over this country — and beyond.
It’s just a 10-cent stock now. All it has to do is earn 25 cents a share, and with a price-to-earnings multiple of say 20 (which is conservative) — it will trade for $5 a share.
Mind you, this is a penny stock. But as you can see, it has HUGE UPSIDE. Moreover, because its share price is so low, you can’t lose more than 10 cents a share, plus your broker’s commissions.
How you can find out more details …
I’d love to give you my top three Blue Gold recos. But I simply can’t. They’re exclusively for active subscribers to my Real Wealth Report.
You can get them by joining now at the low cost of just $99 for a 1-year subscription.
Or, you can grab two years for just $189, an even better deal.
All you have to do is join Real Wealth now …
You’ll be able to get the recommendations the same time my active subscribers do, with all the details you need to know to make these three recos work to maximize your profit potential.
Plus of course, you’ll get everything else my Real Wealth Report offers you.
Speaking of which, as I write this …
Real Wealth Report’s Open Gains Hit $47,000!
- Open positions in the gold market: Three positions, all winners, with gains of up to 65%! That’s $6,548 in open gains.
- In core natural resources, such as oil, gas, aluminum and more: 14 positions — 14 winners. Gains of as high as 102%! Another $31,953 in open gains.
- In more speculative natural resource stocks: 9 positions, 7 winners, 2 losers. Gains of up to 117%, and one of the losers is down 8%. The other loser is down a mere 1%! The total: $6,866 in open gains.
- The Income Portfolio: With gains of up to 35%! Yet another $1,283 in open gains.
How will all those positions fare going forward? Naturally, it’s impossible to say for sure, but I think they’re headed for even more gains.
First, even though the U.S. dollar bounced this week, it remains in a firm long-term downtrend. Conversely, inflation should continue to rise in the months ahead, boosting natural resource prices.
Second, there is no evidence of a slowdown in either China or India. So the two major sources of global demand for natural resources continue to rage ahead.
Third, we’re seeing some short-term pullbacks. But that’s all they are — Healthy, normal pullbacks that will pave the way for more gains ahead.
So use them wisely. Don’t be afraid of them. Instead, view them as buying opportunities. I’ll of course keep you posted if anything changes.
Lastly, to all you fathers out there, have a great holiday!
Best wishes,
Larry
About Money and Markets
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