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SuperModels Recent articles: • Rolling the dice on bird flu, 2/22/2006 • Snowbum stocks that really shred, 2/15/2006 • O Canada, can we have Alberta?, 2/8/2006 More... | SuperModels 20 stocks that are running on water Water as an investment? You bet, since demand is accelerating and isn't affected by inflation, recession, interest rates or changing tastes. By Jon D. Markman Biotech, energy, steel and semiconductors have charmed investors with their muscular start to the year. But theres one little group that has paradoxically been on fire this year, and may be the most liquid investment opportunity in the world. With an introduction like that, you just had to figure that I am referring to the most humble natural resource in the world, and that is water. Did I say humble? Maybe not so much anymore. A brand-new exchange-traded fund designed to track the performance of water stocks, the PowerShares Water Resource Portfolio That swamps the performance of the red-hot AMEX Biotechnology Index, ($BTK.X), up 8% this year; the Philadelphia Semiconductor Sector Index, ($SOX.X), up 6%; the iShares Dow Jones U.S. Basic Materials Sector Index
The must-have commodity Whats behind the move? In January of last year, I explained in a column (Invest in the coming global water shortage ) that a key attraction of water as an investment is that demand is accelerating and is not affected by inflation, recession, interest rates or changing tastes. You can live without steel. You can live without oil. You can live without gold. But try living without water, and you wont last too long. About eight to 10 days, by most estimates. Related news and commentary on MSN Money
The problem is not that the world is running out of water. Scientists seem to agree that there is pretty much the same amount of water on the surface of the planet now as there was 10 million years ago, as physical forces ranging from respiration to precipitation replenish the supply and maintain hydro-balance. No, the problem is that drinkable surface water is increasingly polluted due to the urbanization of rural areas and industrial farming, particularly in the developing world and China. And all the while, there are simply a lot more people who want a sip. When you look at the Earth from outer space, you see a lot of water. But less than half of 1% of it is fresh; the rest is either seawater or frozen in the polar ice caps. The United Nations, which will celebrate World Water Day on March 22, reports that the consumption of water worldwide is doubling every two decades -- twice the rate of world population growth. Already, 1 billion people do not have easy access to drinking water. By 2025, the U.N. figures that 2.7 billion people will suffer from severe water shortages. If you think world conflict over oil has been bad, wait until you see major fights over water rights. The worst conflicts are projected for arid Africa and the Middle East, where Israel, Syria, Jordan and Lebanon dispute rights to draw fresh water from the Sea of Galilee and Litani River, and Turkey and Iraq battle over the Tigris and Euphrates. Meanwhile, in the Central Asia regions of Uzbekistan and Kazakhstan, communist-era planners ruined the freshwater rivers that fed the once fertile basin of the enormous Aral Sea and turned the area into a toxic dustbowl. And in China, damming and pollution have damaged numerous key waterways, including the very important Yellow River. The list goes on and on.
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