2010 Stock picks: 5 best “blue gold” stocks

By: ispeculatornew
Date posted: 01.07.2010 (5:00 am) | Write a Comment  (3 Comments)

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Gold has been one of those resources that have preserved value over time and over the past century; oil has also been a great source of money for those who own it. Thus, many refer to oil as “black gold”. Increasingly, the media and scientists are starting to agree on another trend; that water will be to the 21st century what oil was to the 20th.

We’ve all heard about Africa’s dryness and its impact on their population. But did you know that even in the Western world, water is becoming very valuable? California has been dealing with increasingly serious water shortage problems
which have impacts on farms obviously but also on many industrial companies.

There are now a growing number of investors looking to profit from what could be the “next oil”. Of course, as is the case for oil, there are many different types of companies that can profit from water’s increasing value such as:

-Companies that own water

-Companies that can help improve the efficiency of water use

-Companies involved in water infrastructure

-Companies involved in water transport & manufacturing

They are basically ranked as two different industries according to S&P: Standard & Poor’s Capital IQ (“CIQ”) industry classifications:

1. Water Utilities and Infrastructure Companies (25): water supply, water utilities, waste water treatment, water, sewer and pipeline construction, water purification, water well drilling, water testing

2. Water Equipment and Materials Companies (25): water treatment chemicals, water treatment appliances, pumps and pumping equipment, fluid power pumps and motors, plumbing equipment, totalizing fluid meters and counting devices

Since I am far from a specialist, the only thing I would seriously consider investing in is an ETF, here are that are good options in my opinion.

PHO – Powershares water resources

PIO – Powershares water portfolio

FIW – First Trst ISE Water index

CWW.TO – Clayrmore S&P Global Water ETF

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3 Comments

  1. Comment by OneDay — January 7, 2010 @ 8:36 am

    Interesting, really interesting. It’s not type of products I tend to check usually. Curiosity: what happened in March to bring all “blue gold” stocks down?

    About the great report from 60 min, it’s an alarming situation. Water is one of the most precious resources in this planet. I’m not at all trying to sound like an “Environmentalist Wacko” hehe There are lots of measures for saving water and the best ways/times to wash a car or water your lawn… Sometimes I think that population can help this, but companies should pay penalties for using and wasting too much water…

  2. Comment by OneDay — January 8, 2010 @ 8:07 am

    Actually, almost everything fell in March (stocks, oil, alternative energy) … I guess the market correlation is quite strong with “blue gold” stocks.

  3. Comment by IS — January 9, 2010 @ 8:57 pm

    @OneDay- Yeah, correlations were pretty strong during the whole crisis.. good points though OneDay:)

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