Water ~ Kevin Kerr

Most people do not consider water to be a commodity like many of our other vital resources such as agriculture and energy. That’s mainly because it’s not traded on a futures exchange and because in the West we have considered clean potable water to be a right, not a privilege.

Those days are over …

Clean potable water is becoming more expensive, more scarce, and more important than ever for both drinking and growing crops.

As you can see, having enough useable water is a matter of our very global survival.

So how can you take advantage of this incredible market and the opportunities it affords? Actually there are quite a few ways.

Water-Related Stocks

Anticipating all this future scarcity, many money managers invest directly in water supplies by purchasing shares of companies like PICO (PICO) and Limoneira (LMNR), which are basically farming and real estate holding companies. The attraction is mostly for their water rights.

But I think these approaches are very tricky and too tough to accurately estimate the real value of their water holdings.

Stock in companies that are involved in clean water supplies is another idea. One example is Molycorp (MCP).

Molycorp has designed a revolutionary water filtration system to purify the world’s most heavily polluted drinking water sources. This technology was borne from a joint development effort with the U.S. Army for use in man-portable devices that provide soldiers with clean drinking water regardless of the water source.

In my opinion, though, there are far better ways to take advantage of the critical demand in the water market …

Water ETFs

You could consider an exchange traded fund (ETF). One I like happens to be the largest water ETF available.

The PowerShares Water Resources Portfolio (PHO) is based on the Palisades Water Index™ (Index). This Index seeks to identify a group of companies that focus on the provision of potable water, the treatment of water, and the technology and services that are directly related to water consumption.

And if you are looking to leverage your investment for even bigger possible gains, you could use options on ETFs.

No matter which vehicle you decide is the best for this market, rest assured the growing urgent need of the world’s population for clean potable water will continue. And that’s not going to change anytime soon!

Yours for resource profits,

Kevin Kerr

TheTradingReport.com

PICO 29.45
LMNR 22.90
MCP 57.40
PHO 20.00
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