Investing in - WATER - thoughts

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ps56k
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Investing in - WATER - thoughts

Postby ps56k » Sat Mar 18, 2017 12:56 pm

Just watched the NatGeo special on the California water crisis -
http://channel.nationalgeographic.com/water-and-power-a-california-heist/

As a friend pointed out - the wild west has always had its battles around water rights,
and now it has been ramped up between the various modern day players.

BTW - I saw the Stella Artois (Matt Damon) TV water commercial -
and bought 2 goblets and sent them to our son in California.... even though the proceeds help the rest of the world.

Like the story presented, I think that water will become a fought over commodity - just like oil.
And most folks think that cutting back on your personal water usage will help - but it is NOT water usage by people,
it is the 80% used by the tree nut farmers and other ag and livestock land owners.

So, as an investor, how do you get involved with any of these water related ETF's - but yet still feel socially responsible ?
Some listed are - FIW, CGW, PHO, PIO

https://finance.yahoo.com/quote/fiw
https://finance.yahoo.com/quote/cgw
https://finance.yahoo.com/quote/pho
https://finance.yahoo.com/quote/pio
Last edited by ps56k on Sat Mar 18, 2017 1:00 pm, edited 1 time in total.

Mr.BB
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Re: Investing in - WATER - thoughts

Postby Mr.BB » Sat Mar 18, 2017 12:59 pm

I had some shares of PHO for a couple of years, really did nothing. Sold the shares late last year.
If you are going to invest in these types of stocks, you probably will need to have a long term (15-20) year horizon.

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ps56k
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Re: Investing in - WATER - thoughts

Postby ps56k » Sat Mar 18, 2017 1:05 pm

Mr.BB wrote:If you are going to invest in these types of stocks, you probably will need to have a long term (15-20) year horizon.

The battle is not going to be short term.
I had looked at these a few years ago, and didn't pull the trigger for the same reason.

At this point in time, it looks like the different aspects will involve -
- private land owners with their underground water holdings
- building tech to filter or transform salt water
- distribution and water supply transformation
- equipment to support all of the above

So - agreed - it will be flat until the water commodity becomes more of an issue, or the economics change - same as with oil and gas -

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Re: Investing in - WATER - thoughts

Postby NibbanaBanana » Sat Mar 18, 2017 1:25 pm

I think it's priced into the stocks already. I've watched them for decades and wished I had invested back then.

50% of the fresh water in the US is used for animal production. See Cowspiracy. http://www.cowspiracy.com/

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sat Mar 18, 2017 1:29 pm

ps56k wrote:Just watched the NatGeo special on the California water crisis -
http://channel.nationalgeographic.com/water-and-power-a-california-heist/

As a friend pointed out - the wild west has always had its battles around water rights,
and now it has been ramped up between the various modern day players.

BTW - I saw the Stella Artois (Matt Damon) TV water commercial -
and bought 2 goblets and sent them to our son in California.... even though the proceeds help the rest of the world.


Of course a direct contribution to the charities in question gives them *more* money for the same spending by you?

Like the story presented, I think that water will become a fought over commodity - just like oil.


If we are talking the Indus River basin in Pakistan & its struggle with India over water, or Ethiopia-Sudan-Egypt, then I see that argument. Also Syria-Turkey.

Water is so different a commodity than oil, though, that I don't see it generally happening:

- oil can only be used once, then it is consumed (except for recycled lubricants). Water is not-- you can recycle waste water back to drinking water (many countries do, although so far the US has a distaste for this)
- world oil production is not huge in volume terms, and per unit energy, oil is far and away the world's most expensive energy source (other than refined uranium). I t's also just about the highest density of energy we have (other than, again, nuclear materials)
- it's easy to move oil around the world. Natural gas, for example, is much less globally mobile (LNG is only about 8% of world consumption) thus, price of natural gas is far far lower in places like the USA
- the world does not sit upon vast oceans of oil (albeit the water is mostly not directly usable)
- floods of oil from the sky are not a serious problem for many parts of the world, nor does oil run into large open air reservoirs or rivers, generally


And most folks think that cutting back on your personal water usage will help - but it is NOT water usage by people,
it is the 80% used by the tree nut farmers and other ag and livestock land owners.


And? So their supply is cut back (eventually it will be). Food prices go up a bit.

So, as an investor, how do you get involved with any of these water related ETF's - but yet still feel socially responsible ?
Some listed are - FIW, CGW, PHO, PIO

https://finance.yahoo.com/quote/fiw
https://finance.yahoo.com/quote/cgw
https://finance.yahoo.com/quote/pho
https://finance.yahoo.com/quote/pio


I don't.

Sector bets seldom, if ever, work-- in portfolio terms you are taking additional risk for which you will not receive additional compensation-- irrational thing to do. Water companies often don't own the water they supply. If there is a shortage, then they supply *less* water and make *less* revenue.

Basically these are regulated utilities that supply water and whose profits are controlled by regulatory agencies. In the US, I believe the majority are, in fact, municipally owned.

Water processing equipment manufacturers? Sure. But none of them has a monopoly on the equipment they supply.

I could go on.

If you want to be virtuous, invest according to John Bogle's principles (don't take his word for it, there are literally thousands of theoretical and empirical academic studies, peer reviewed, supporting what he says), and then allocate some of your returns for appropriate charities?

Appropriate charities:

=- groups that work to supply clean water in emerging markets (like Water Aid, here in the UK)-- we actually have no clue, here, what a real water shortage is like

- not-for-profits that advocate sensible water use. Pacific Institute comes to mind (not sure of their funding structure)-- they publish good papers.

BTW I have similar feelings about renewable energy. But my (modest) contribution to organizations that lobby for sensible energy policy (in places outside the USA) makes a far greater difference to the world (I am sure) than investing in some solar stocks.

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Re: Investing in - WATER - thoughts

Postby knpstr » Sat Mar 18, 2017 1:50 pm

I was expecting to hear you say you just finished watching "The Big Short" and are following Michael Burry.
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Re: Investing in - WATER - thoughts

Postby willthrill81 » Sat Mar 18, 2017 1:57 pm

NibbanaBanana wrote:I think it's priced into the stocks already.


Bingo. This is a ticket to nowhere IMHO.

The question is not whether water stocks will perform well in the long-term but whether they will outperform the broad market over the next 10, 20, or 30 years enough to cover the risks of sector volatility. I don't see that happening.
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Re: Investing in - WATER - thoughts

Postby Johnnie » Sat Mar 18, 2017 4:00 pm

Long ago, probably solving the world's problems over cocktails, a friend and fellow Michigander said to me, "We have it made here - we have all the water!"

Yep. :)

Image

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knpstr
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Re: Investing in - WATER - thoughts

Postby knpstr » Sat Mar 18, 2017 4:02 pm

willthrill81 wrote:
NibbanaBanana wrote:I think it's priced into the stocks already.


Bingo. This is a ticket to nowhere IMHO.


Well, in theory.
:beer
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dm200
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Re: Investing in - WATER - thoughts

Postby dm200 » Sat Mar 18, 2017 4:04 pm

Years ago, someone told me an allegedly true story that a company in Saudi Arabia was sent to drill for water. The effort was a complete financial failure -- they struck oil instead.

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Re: Investing in - WATER - thoughts

Postby pokebowl » Sat Mar 18, 2017 4:44 pm

Doesn't Nestle already own everyones water already? Pretty sure if they found large amounts of water on Mars, Nestle would beat Elon Musk to the punch and get there first to obtain the water rights. :mrgreen:

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Re: Investing in - WATER - thoughts

Postby travellight » Sat Mar 18, 2017 4:47 pm

knpstr wrote:I was expecting to hear you say you just finished watching "The Big Short" and are following Michael Burry.


ditto, that came to mind as well.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sat Mar 18, 2017 5:24 pm

dm200 wrote:Years ago, someone told me an allegedly true story that a company in Saudi Arabia was sent to drill for water. The effort was a complete financial failure -- they struck oil instead.


The issue there would be that any oil "strike" belongs to the Saudi American oil company, now known as Aramco. The world's largest oil company, until an IPO takes place (and we don't know the terms of that), 100% state owned.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sat Mar 18, 2017 5:25 pm

pokebowl wrote:Doesn't Nestle already own everyones water already? Pretty sure if they found large amounts of water on Mars, Nestle would beat Elon Musk to the punch and get there first to obtain the water rights. :mrgreen:


I haven't read the Nestle sustainability report but the big food & drink manufacturers are under huge pressure re sustainability of their supply chains.

And that pressure is *not* going to go away, it is only going to get worse.

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Re: Investing in - WATER - thoughts

Postby Tycoon » Sat Mar 18, 2017 5:28 pm

...I might be just beginning | I might be near the end. Enya | | C'est la vie

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sat Mar 18, 2017 5:28 pm

Johnnie wrote:Long ago, probably solving the world's problems over cocktails, a friend and fellow Michigander said to me, "We have it made here - we have all the water!"

Yep. :)

Image


(I grew up on the shores of Lake Ontario)

1. the Great Lakes had horrible horrible domestic and industrial pollution. They are far far cleaner than they were in the 1960s, however there is still population and economic growth going on, so it's not like this question is full and finally settled. Yes acid rain and sewage are far less of a threat, but they have not disappeared.

In addition, there are invasive species, which are creating their own issues.

2. if the weather changes, there will not be such water

My father used to drive us north, and point out the boundary of Lake Aggasiz, which included basically the entire Great Lakes basin in its expanse at the end of the last Ice Age. Basically, the total freshwater of the Great Lakes has been shrinking after since.

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Re: Investing in - WATER - thoughts

Postby rob65 » Sat Mar 18, 2017 5:42 pm

This has the same problem as a sector bet on clean energy or any other emerging technology - even if your underlying hypothesis is true, there's no guarantee that existing companies in the fund will be the winners.

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Re: Investing in - WATER - thoughts

Postby willthrill81 » Sat Mar 18, 2017 6:38 pm

rob65 wrote:This has the same problem as a sector bet on clean energy or any other emerging technology - even if your underlying hypothesis is true, there's no guarantee that existing companies in the fund will be the winners.


Further, the "money may have already been made," the need may not materialize to the hypothesized degree one thought, or the sector may simply underperform the total market. No thanks.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Investing in - WATER - thoughts

Postby blueblock » Sat Mar 18, 2017 6:41 pm

Johnnie wrote:Long ago, probably solving the world's problems over cocktails, a friend and fellow Michigander said to me, "We have it made here - we have all the water!"

Yep. :)

Image


That may be true, but rest assured that Nestle, for one, is working hard to turn a natural resource into corporate profits by siphoning off the springs that feed Lake Michigan:

http://www.mlive.com/news/index.ssf/201 ... ntain.html

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Re: Investing in - WATER - thoughts

Postby Watty » Sat Mar 18, 2017 6:51 pm

One that that can't be denied is that if you invest in water you would have a liquid asset. :mrgreen:

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Cosmo
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Re: Investing in - WATER - thoughts

Postby Cosmo » Sat Mar 18, 2017 7:10 pm

ps56k wrote:Just watched the NatGeo special on the California water crisis -
http://channel.nationalgeographic.com/water-and-power-a-california-heist/

As a friend pointed out - the wild west has always had its battles around water rights,
and now it has been ramped up between the various modern day players.

BTW - I saw the Stella Artois (Matt Damon) TV water commercial -
and bought 2 goblets and sent them to our son in California.... even though the proceeds help the rest of the world.

Like the story presented, I think that water will become a fought over commodity - just like oil.
And most folks think that cutting back on your personal water usage will help - but it is NOT water usage by people,
it is the 80% used by the tree nut farmers and other ag and livestock land owners.

So, as an investor, how do you get involved with any of these water related ETF's - but yet still feel socially responsible ?
Some listed are - FIW, CGW, PHO, PIO

https://finance.yahoo.com/quote/fiw
https://finance.yahoo.com/quote/cgw
https://finance.yahoo.com/quote/pho
https://finance.yahoo.com/quote/pio


Is there really a scarcity of water in California? I don't believe so. You got an endless supply of water from the Pacific via desalination. In fact, the nation's largest desalination plant is located in San Diego County and is expected to furnish the county up to 10% of their water supply. The only thing that is stopping more desalination plants from being developed is that the price of water is still relatively cheap in California so it just isn't economical. As water becomes more scarce (through population growth coupled with the boom/bust of the water cycle), prices will go up and it will make plant development more economically feasible. On a separate note, I am in amazement on how California's water woes got turned around over just a few months' time. I would invest in desalination technologies. Unfortunately, the process is not very green and consumes a considerable amount of energy via osmosis.

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Re: Investing in - WATER - thoughts

Postby Geologist » Sat Mar 18, 2017 7:24 pm

Water has been thought of as an upcoming commodity to be fought over for decades. The question is whether you can make money by investing in it somehow. I'm dubious, unless you are actually inventing a new technology that will be useful somewhere (even if only in limited areas).

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Re: Investing in - WATER - thoughts

Postby willthrill81 » Sat Mar 18, 2017 7:25 pm

Cosmo wrote:Is there really a scarcity of water in California? I don't believe so. You got an endless supply of water from the Pacific via desalination. In fact, the nation's largest desalination plant is located in San Diego County and is expected to furnish the county up to 10% of their water supply. The only thing that is stopping more desalination plants from being developed is that the price of water is still relatively cheap in California so it just isn't economical. As water becomes more scarce (through population growth coupled with the boom/bust of the water cycle), prices will go up and it will make plant development more economically feasible. On a separate note, I am in amazement on how California's water woes got turned around over just a few months' time. I would invest in desalination technologies. Unfortunately, the process is not very green and consumes a considerable amount of energy via osmosis.


The only reason that desalination hasn't taken off there is because the market isn't willing to pay for it. Yet. But considering that California's population has stabilized (some theorize a net population decline for CA in the foreseeable future), I'm not sure that the problem will continue to the same extent as it has. Agriculture is the biggest water consumer though, and that's not going away soon, so who knows what will happen.

That uncertainty plus a lot more is why I'm not interested.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Investing in - WATER - thoughts

Postby TinkerPDX » Sat Mar 18, 2017 7:29 pm

ps56k wrote:Just watched the NatGeo special on the California water crisis -
http://channel.nationalgeographic.com/water-and-power-a-california-heist/

As a friend pointed out - the wild west has always had its battles around water rights,
and now it has been ramped up between the various modern day players.

BTW - I saw the Stella Artois (Matt Damon) TV water commercial -
and bought 2 goblets and sent them to our son in California.... even though the proceeds help the rest of the world.

Like the story presented, I think that water will become a fought over commodity - just like oil.
And most folks think that cutting back on your personal water usage will help - but it is NOT water usage by people,
it is the 80% used by the tree nut farmers and other ag and livestock land owners.

So, as an investor, how do you get involved with any of these water related ETF's - but yet still feel socially responsible ?
Some listed are - FIW, CGW, PHO, PIO

https://finance.yahoo.com/quote/fiw
https://finance.yahoo.com/quote/cgw
https://finance.yahoo.com/quote/pho
https://finance.yahoo.com/quote/pio


There's a million reasons not to invest in sectors / based on news / based on political views / based on any particular thing we expect about the future, since of course the market has incorporated all that info and probably done a better job of it than you can, and since concentration like this is antithetical to diversification....

But I'll admit that we do have one account where I basically do, in which we hold clean energy ETFs (icln, tan, fan, and grid; and yes I know they overlap some) and also PHO. I don't add to this and don't rebalance, just put all the dividends into bond funds.

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Re: Investing in - WATER - thoughts

Postby JonnyDVM » Sat Mar 18, 2017 7:31 pm

We could be like Immortan Joe from Mad Max!

I think any value in this has already been scooped up by people with money who saw a crisis building a long time ago. I could be wrong, but I don't think it's worth adding to a portfolio anymore than any other commodity.
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Re: Investing in - WATER - thoughts

Postby Cosmo » Sat Mar 18, 2017 7:45 pm

willthrill81 wrote:
Cosmo wrote:Is there really a scarcity of water in California? I don't believe so. You got an endless supply of water from the Pacific via desalination. In fact, the nation's largest desalination plant is located in San Diego County and is expected to furnish the county up to 10% of their water supply. The only thing that is stopping more desalination plants from being developed is that the price of water is still relatively cheap in California so it just isn't economical. As water becomes more scarce (through population growth coupled with the boom/bust of the water cycle), prices will go up and it will make plant development more economically feasible. On a separate note, I am in amazement on how California's water woes got turned around over just a few months' time. I would invest in desalination technologies. Unfortunately, the process is not very green and consumes a considerable amount of energy via osmosis.


The only reason that desalination hasn't taken off there is because the market isn't willing to pay for it. Yet. But considering that California's population has stabilized (some theorize a net population decline for CA in the foreseeable future), I'm not sure that the problem will continue to the same extent as it has. Agriculture is the biggest water consumer though, and that's not going away soon, so who knows what will happen.

That uncertainty plus a lot more is why I'm not interested.


Agreed. There is definitely a lot of uncertainty. I think desalination will eventually take off but probably not over the next 10-20 years.

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Re: Investing in - WATER - thoughts

Postby Phineas J. Whoopee » Sat Mar 18, 2017 7:50 pm

Fortunately for you, nobody else watched the same television show.
PJW

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Re: Investing in - WATER - thoughts

Postby knpstr » Sat Mar 18, 2017 8:02 pm

the longer the delay of the crisis, the quicker the solution is coming.

Solar energy will make desalination much more cost effective. Then we will have the oceans for our freshwater use.

...if you are in to the "long game"

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Re: Investing in - WATER - thoughts

Postby Johnnie » Sat Mar 18, 2017 8:30 pm

blueblock wrote:
Johnnie wrote:Long ago, probably solving the world's problems over cocktails, a friend and fellow Michigander said to me, "We have it made here - we have all the water!"

Yep. :)

Image


That may be true, but rest assured that Nestle, for one, is working hard to turn a natural resource into corporate profits by siphoning off the springs that feed Lake Michigan:

http://www.mlive.com/news/index.ssf/201 ... ntain.html

We veer toward politics, but as one wag has observed, there's no water shortage in Michigan - people need pumps to keep it out of their basements!

~~~~~~~~~~~

At the risk once again of approaching the forbidden zone, on the parallel California discussion:

John Steinbeck, writing about California’s Salinas Valley, where he grew up, in the novel “East of Eden” (1952):

I have spoken of the rich years when the rainfall was plentiful. But there were dry years too, and they put a terror on the valley. The water came in a thirty-year cycle. There would be five or six wet and wonderful years when there might be nineteen to twenty-five inches of rain, and the land would shout with grass. Then would come six or seven pretty good years of twelve to sixteen inches of rain. And then the dry years would come, and sometimes there would be only seven or eight inches of rain. The land dried up and the grasses headed out miserably a few inches high and great bare scabby places appeared in the valley. The live oaks got a crusty look and the sagebrush was gray. The land cracked and the springs dried up and the cattle listlessly nibbled dry twigs. Then the farmers and the ranchers would be filled with disgust for the Salinas Valley. The cows would grow thin and sometimes starve to death. People would have to haul water in barrels to their farms just for drinking. Some families would sell out for nearly nothing and move away. And it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years. It was always that way.



Excerpted by WSJ notable and quotable May 5, 2015

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HomerJ
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Re: Investing in - WATER - thoughts

Postby HomerJ » Sat Mar 18, 2017 8:37 pm

The Earth is 2/3 water.

If it gets scarce enough, they'll figure out how to pull ocean water and make it fresh. They can do this NOW, but it's really expensive.

But if fresh water becomes REALLY scarce, resources will be focused on the problem, and I have no doubt new methods will be invented.

Water certainly isn't the same as oil.

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Re: Investing in - WATER - thoughts

Postby willthrill81 » Sat Mar 18, 2017 8:49 pm

HomerJ wrote:The Earth is 2/3 water.

If it gets scarce enough, they'll figure out how to pull ocean water and make it fresh. They can do this NOW, but it's really expensive.


If you're willing to use a LOT of space and let the sun do the work for you, you can do it inexpensively. But doing it on a massive scale simply takes up too much space when you factor in that space is already at a premium in the places that need the water.

It's off topic, but I really wonder whether future generations will look back and say "What idiot thought it was a good idea to have huge cities with millions of people in the middle of a desert?"
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Investing in - WATER - thoughts

Postby White Coat Investor » Sat Mar 18, 2017 9:08 pm

ps56k wrote:Just watched the NatGeo special on the California water crisis -
http://channel.nationalgeographic.com/water-and-power-a-california-heist/

As a friend pointed out - the wild west has always had its battles around water rights,
and now it has been ramped up between the various modern day players.

BTW - I saw the Stella Artois (Matt Damon) TV water commercial -
and bought 2 goblets and sent them to our son in California.... even though the proceeds help the rest of the world.

Like the story presented, I think that water will become a fought over commodity - just like oil.
And most folks think that cutting back on your personal water usage will help - but it is NOT water usage by people,
it is the 80% used by the tree nut farmers and other ag and livestock land owners.

So, as an investor, how do you get involved with any of these water related ETF's - but yet still feel socially responsible ?
Some listed are - FIW, CGW, PHO, PIO

https://finance.yahoo.com/quote/fiw
https://finance.yahoo.com/quote/cgw
https://finance.yahoo.com/quote/pho
https://finance.yahoo.com/quote/pio


I agree there will be wars fought over water at some point in the future. There are already minor, non-shooting border skirmishes in places like the AZ-UT border between the respective state governments fighting over aquifers. But I doubt there will be wars fought over water during my investing horizon. And I have no idea if an investment in any of those ETFs is likely to outperform the broader market over my investment horizon.
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Re: Investing in - WATER - thoughts

Postby packer16 » Sat Mar 18, 2017 9:12 pm

If you want exposure to water rights these ETFs will not help you. There are a few publicly traded firms that hold some like PICO and PCYO but most are privately held. Private water rights only exist in the Western United State, primarily west of the Mississippi. The water right firms are like investing in land as water rights are required in some states (Nevada, Colorado & Arizona) to pursue development. Since water rights are dependent upon development, they may have little to no value until develop begins.

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Re: Investing in - WATER - thoughts

Postby HomerJ » Sat Mar 18, 2017 9:28 pm

willthrill81 wrote:
HomerJ wrote:The Earth is 2/3 water.

If it gets scarce enough, they'll figure out how to pull ocean water and make it fresh. They can do this NOW, but it's really expensive.


If you're willing to use a LOT of space and let the sun do the work for you, you can do it inexpensively. But doing it on a massive scale simply takes up too much space when you factor in that space is already at a premium in the places that need the water.

It's off topic, but I really wonder whether future generations will look back and say "What idiot thought it was a good idea to have huge cities with millions of people in the middle of a desert?"


Well, technically deserts have lots of space and sun to boil water :)

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willthrill81
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Re: Investing in - WATER - thoughts

Postby willthrill81 » Sat Mar 18, 2017 9:41 pm

HomerJ wrote:
willthrill81 wrote:
HomerJ wrote:The Earth is 2/3 water.

If it gets scarce enough, they'll figure out how to pull ocean water and make it fresh. They can do this NOW, but it's really expensive.


If you're willing to use a LOT of space and let the sun do the work for you, you can do it inexpensively. But doing it on a massive scale simply takes up too much space when you factor in that space is already at a premium in the places that need the water.

It's off topic, but I really wonder whether future generations will look back and say "What idiot thought it was a good idea to have huge cities with millions of people in the middle of a desert?"


Well, technically deserts have lots of space and sun to boil water :)


Not to get political, but check into what happened with Schwarzenegger tried to have a solar panel 'farm' installed in the California desert. The environmentalists pretty much made it a non-starter.
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Re: Investing in - WATER - thoughts

Postby Grasshopper » Sat Mar 18, 2017 9:54 pm

I live in SE Arizona Cochise county, I am blessed to live 1/2 mile from a 100K+ acre wilderness. My well is fed from snow melt and 17+ inches of rain a year. There has been a lot of interest in pecan growing lower in the valley, some big money is buying up large ranches, including Howard Buffett.

https://www.azpm.org/s/36761-for-sale-i ... r-willcox/

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Re: Investing in - WATER - thoughts

Postby whodidntante » Sun Mar 19, 2017 12:03 am

I would buy Xylem. They are going to benefit greatly from infrastructure building.

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Re: Investing in - WATER - thoughts

Postby SittingOnTheFence » Sun Mar 19, 2017 12:42 am

You may as well invest in a commodity that has more (ahemmm) liquidity. Like Gold.
I guess you are not considering actual water rights, but if you were, it's not as easy as you may think.
Besides the threat that local authorities can change the law, and have done that in the past decade, there are substantial fees involved in proving your ownership and then changing that ownership.

Then there is the question of are you talking about ground water or surface water. And are they under Federal jurisdiction or State jurisdiction? Western States have vastly different laws relating to ownership.

I live in an area that experienced amazing price jumps on speculation, and like most commodity speculation, amazing price drops too. If you want to play with commodity speculation, my suggestion would be gold before water because if you want to get out of your position then it's easier to do with gold.

ps: I once had a decades long position in gold and will never do that again.

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Re: Investing in - WATER - thoughts

Postby packer16 » Sun Mar 19, 2017 7:59 am

Since water rights are directly related to real estate development, it may easier to buy lots in the region you are interested in. Land speculation has probably created the most wealth in the US overtime of any asset but there are also great up and downdrafts depending upon the direction development goes. If anyone is interested there is a good book called "100 years of Land Values in Chicago" that provides a pretty good narrative of this over a reasonably long period of time.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sun Mar 19, 2017 8:42 am

SittingOnTheFence wrote:You may as well invest in a commodity that has more (ahemmm) liquidity. Like Gold.
I guess you are not considering actual water rights, but if you were, it's not as easy as you may think.
Besides the threat that local authorities can change the law, and have done that in the past decade, there are substantial fees involved in proving your ownership and then changing that ownership.

Then there is the question of are you talking about ground water or surface water. And are they under Federal jurisdiction or State jurisdiction? Western States have vastly different laws relating to ownership.

I live in an area that experienced amazing price jumps on speculation, and like most commodity speculation, amazing price drops too. If you want to play with commodity speculation, my suggestion would be gold before water because if you want to get out of your position then it's easier to do with gold.

ps: I once had a decades long position in gold and will never do that again.


I once read a couple of books on western water.

Had I followed a career my Dad might have wished I had, I might well have wound up in the western USA, working on water supply as a civil engineer.

Suffice to say the subject is absolutely fascinating.

But it is also incredibly complex. For the very reasons you cite:

- legal - who owns the water is anything but clear, or where it is clear, it is anything but straightforward. As California found when it tried to restrict water use-- people just switched to extracting (non replenishable in a time frame of only years) deep ground water.

In Harry Harrison's memorable science fiction novel "Make Room, Make Room" (the Charlton Heston movie Soylent Green has been reappraised as being better than it seemed at the time, but it is different) there is a riff about farming with fossilized water. It's worth digging out.

https://en.wikipedia.org/wiki/Make_Room!_Make_Room!

http://www.michaelowencarroll.com/hh/n07.htm

So the problem which Harrison's novel highlights is as valid today as it was thirty years ago, probably more so. And the novel was never really about 1999, it was only about the near future; and it was never really about New York City, but it was about our world, our Western cities generally. Make Room! Make Room! is about overpopulation, overconsumption, and the very real need for people to take a responsible attitude over birth control. It is also a warning which few people seem to have heeded.


I'd ammend what is written above-- places like Delhi, Mumbai, Shanghai, Beijing are more important in the modern parallels than most western cities (perhaps except Los Angeles/ SoCal & Phoenix AZ & Las Vegas NV).

The fact that in many Western US states, if it rains on your land, you *do not* own that water, and can be charged if you collect it without a permit, is quite a shock to those of us who grew up in the parts of North America with riparian rights (I really could not tell you the difference between Ontario and Alberta on this one, and for different reasons, they both have significant water supply issues).

- hydrology - complex and not remotely simple and not fully understood

- pollution - water gets contaminated

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Sun Mar 19, 2017 8:56 am

willthrill81 wrote:
HomerJ wrote:The Earth is 2/3 water.

If it gets scarce enough, they'll figure out how to pull ocean water and make it fresh. They can do this NOW, but it's really expensive.


If you're willing to use a LOT of space and let the sun do the work for you, you can do it inexpensively. But doing it on a massive scale simply takes up too much space when you factor in that space is already at a premium in the places that need the water.

It's off topic, but I really wonder whether future generations will look back and say "What idiot thought it was a good idea to have huge cities with millions of people in the middle of a desert?"


The question is surely closer than that.

The Anaszi? One of the leading explanations is the rains shifted, and they literally ran out of water.

You can (could) go to the Roman cities of Libya (fantastically well preserved, or were) and see the extraordinary steps they took to maintain what was then the breadbasket of the Empire as the climate dried up. You get something like the Forum at Cyraneae, and it is slanted slightly to drain holes. And underneath, large cisterns which underlay the whole of the centre of the city (I've walked through some of them, they are absolutely huge).

Climate change, and the bubonic plague, finished them off. It's quite poignant, because you have these churches that the later Byzantine Christians of the 5th, 6th century built before the coming of the Arabs, when the populations were perhaps 5% of their Roman Imperial peaks (from say 100k to 5k I recall the Cyrenean estimate to be). And they built primitive churches, using Roman pillars, but the pillars were all of different heights, different capitols, so they just stuck blocks under them to make them of the same height-- crazy quilt churches. And the quality of the mosaics is nothing like what the Romans did. It's very poignant.

Also the Mayan Temple culture. It was the New World equivalent of Classical Greece, with all these city states and competition thru sport and trade. You find these cities, competing using a particularly violent form of lacrosse/ football, rather than war, and competing to build the tallest temple to the Gods. But that part of Central America is built on limestone, water just percolates away. And it appears it stopped raining for 100 years.

By the end, they were ripping up the temples to the Gods and using the paving stones to build makeshift fortifications. Practising cannibalism and genocidal warfare. Then the temple cities were abandoned. Left to be found by western "explorers" (the locals always knew they were there, of course ;-)).

Part of the solution is rigorous efficiency. Las Vegas has ?doubled? in population but actually reduced water use. But there are still golf courses and green lawns-- they are not there yet. And they have been building intakes at successively lower levels in ?Lake Powell? because the reservoir level has fallen so much. And buying up other peoples' water rights. But that doesn't create more water.

Recycling of waste water has a long way to go. There's a cultural adaptation to using someone else's purified sewage water, but it's doable and safe.

Desalination is apparently not quite as good a solution as we tend to think/ hope:

- you leave behind concentrated salts, a pollution problem all their own

- it's incredibly energy intensive

- it is prohibitively expensive (I think Sydney Australia is finding that out)

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Re: Investing in - WATER - thoughts

Postby nedsaid » Sun Mar 19, 2017 1:48 pm

I actually think this idea has merit, some years ago I thought about buying water utility stocks.

The problem is that there are likely risks in this market segment that are not apparent to laymen. "Investing in water" which seems intuitive as it is something that we all need and use every day. There are a couple of industries like Oil and Electric Utilities that seem to be "no brainers" but have had risks show up in recent years. What I am trying to say is that what seems to be "no brainers" are actually not. One thing that I can think of is that these type of industries are very capital intensive.

You might be buying something that seems "cheap" when the market might be aware that there are huge capital investments that need to be made in the future. Infrastructure does not last forever. If you found something "cheap", it might be "cheap for a darned good reason. There might be a lot of deferred maintenance and replacement.

You have a good idea but I sure would do a lot of research on this before plunging in. I doubt that you will discover anything that professional investors don't know already. Hard to say if this sector would deliver above market returns.
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Re: Investing in - WATER - thoughts

Postby qwertyjazz » Sun Mar 19, 2017 2:44 pm

There is an argument that Syria was about water and farming that sparked it. Investing in water is not clear how you do it. In the US the infrastructure is old and needs upgrades. So do you buy concrete? Oil was an interesting concept as desalination is energy intensive. Maybe invest in alternative energy companies. The non ethical perhaps response is invest in military suppliers. Maybe human capital - hydrology might be a good field to be in if you study the correct topics. This is like the AI threads. Yeah water will be more important in the future. It is just not clear how to monetize that fact from an individual investor perspective.
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Re: Investing in - WATER - thoughts

Postby HomerJ » Sun Mar 19, 2017 2:47 pm

SittingOnTheFence wrote:You may as well invest in a commodity that has more (ahemmm) liquidity. Like Gold.


Made me laugh. Would read again. :)

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Re: Investing in - WATER - thoughts

Postby SittingOnTheFence » Sun Mar 19, 2017 11:45 pm

Valuethinker wrote:Part of the solution is rigorous efficiency. Las Vegas has ?doubled? in population but actually reduced water use. But there are still golf courses and green lawns-- they are not there yet. And they have been building intakes at successively lower levels in ?Lake Powell? because the reservoir level has fallen so much. And buying up other peoples' water rights. But that doesn't create more water.


Lake Mead. Also LV was paying homeowners to tear out there grass but I don't know the specifics.
As for 2x the population and reducing water use, not so sure about that. Do you mean gals/capita?
The golf courses are using recycled waste water.

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Re: Investing in - WATER - thoughts

Postby SittingOnTheFence » Sun Mar 19, 2017 11:53 pm

Valuethinker wrote:The fact that in many Western US states, if it rains on your land, you *do not* own that water, and can be charged if you collect it without a permit


Yes indeed, I forgot to mention that. Precipitation falling off your roof is prohibited from being collected. It is presumed that this water flows into a regulated stream or river for which certain folks own the rights.

There are also antiquated laws that prohibit the use of 'grey water' to keep your vegetation alive.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Mon Mar 20, 2017 4:08 am

SittingOnTheFence wrote:
Valuethinker wrote:Part of the solution is rigorous efficiency. Las Vegas has ?doubled? in population but actually reduced water use. But there are still golf courses and green lawns-- they are not there yet. And they have been building intakes at successively lower levels in ?Lake Powell? because the reservoir level has fallen so much. And buying up other peoples' water rights. But that doesn't create more water.


Lake Mead. Also LV was paying homeowners to tear out there grass but I don't know the specifics.
As for 2x the population and reducing water use, not so sure about that. Do you mean gals/capita?
The golf courses are using recycled waste water.


Thank you. I need to find some cites-- it's clear I don't have a good enough picture.

Consumption per head did drop, but I am implying it dropped by more than 50% and that seems extreme.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Mon Mar 20, 2017 4:21 am

qwertyjazz wrote:There is an argument that Syria was about water and farming that sparked it. Investing in water is not clear how you do it. In the US the infrastructure is old and needs upgrades. So do you buy concrete? Oil was an interesting concept as desalination is energy intensive. Maybe invest in alternative energy companies. The non ethical perhaps response is invest in military suppliers. Maybe human capital - hydrology might be a good field to be in if you study the correct topics. This is like the AI threads. Yeah water will be more important in the future. It is just not clear how to monetize that fact from an individual investor perspective.



It is true that Syria had a multiyear drought before its "Arab Spring" broke out, the Regime moved to crush the protesters, and civil war began. That's a long way from proving drought caused a civil war (but there seems to have been a similar dynamic amongst farmers in Tunisia).

Re US Bernstein did some analysis. Cemex is a clear winner-- particularly as they have the depots near the US border (both sides). Note that concrete has a very short shelf life (hours)-- what you are buying is the depot network and the mixer trucks. Cement (usually produced by the concrete companies) is a dense material that can travel long distances.

There's Holcim, Lafarge (I am forgetting who has taken over whom in the industry). Not sure if the Nigerian company is listed. Cemex.

Renewable energy is a bit like tech only worse-- you've got low barriers to entry (scale and capital are major barriers, though), rapidly changing technology, no one knows how we are going to pay for this.

Defence yes, but aways defence in a way. Defence spending is cyclical and we are in an up cycle.

Your last two sentences deserve underlining and repetition. I am certainly more confident that studying AI (even at the level of a working person ie not a degree) will be important in your future life and pay back, than I am studying hydrology or civil engineering.
Last edited by Valuethinker on Mon Mar 20, 2017 8:55 am, edited 1 time in total.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Mon Mar 20, 2017 8:41 am

SittingOnTheFence wrote:
Valuethinker wrote:Part of the solution is rigorous efficiency. Las Vegas has ?doubled? in population but actually reduced water use. But there are still golf courses and green lawns-- they are not there yet. And they have been building intakes at successively lower levels in ?Lake Powell? because the reservoir level has fallen so much. And buying up other peoples' water rights. But that doesn't create more water.


Lake Mead. Also LV was paying homeowners to tear out there grass but I don't know the specifics.
As for 2x the population and reducing water use, not so sure about that. Do you mean gals/capita?
The golf courses are using recycled waste water.


http://www.reviewjournal.com/news/water ... gas-growth

Those conservation efforts are how the valley has grown from 1.6 million to 2 million residents since 2000 while slashing aggregate water use by 33 percent, Entsminger said.


https://www.outsideonline.com/2016686/w ... -las-vegas

he efforts are paying off. Though total water use for the city rose only slightly between 2000 and 2010—by about 1.5 percent—Vegas added more than a million people. That works out to a 33 percent per person drop in water use. Vegas water officials hope to go even lower, with a per capita water-use goal of 199 gallons per person per day by 2035. That’s 20 fewer gallons a day than is used today.


the only problem with these happy articles is that the root is that LV gets an "unfairly small" proportion of the Colorado River. c. 2%/ However that doesn't mean that unfairness will be rectified, or that the Colorado River itself won't become significantly smaller in the future.


Water Resources

photo of Colorado River under bridge
The Colorado River
Southern Nevada gets nearly 90 percent of its water from the Colorado River. The other 10 percent of our water comes from groundwater that is pumped out through existing wells within Clark County.

Water Resource Plan

The Las Vegas Valley Water District is a member agency of the Southern Nevada Water Authority (SNWA), which develops and maintains a Water Resource Plan that serves all the member agencies.

The plan includes the history of water in Southern Nevada, the SNWA water resource portfolio, what will be done to meet future water demands and environmental impact issues.

Conservation

Water conservation is an important component of SNWA's Water Resource Plan.

Conservation efforts in the Las Vegas Valley have helped the community reduce its per capita water use by 37 percent between 2002 and 2015, even as the population increased by more than half a million residents during that time.

In 2015, Southern Nevada used 125 gallons per capita per day. (Note: This number reflects water from all sources used by residents and businesses served by municipal water providers, as well as recovered indoor water treated and returned to the Colorado River system and water used by 40 million annual visitors. Because different water agencies' calculation methodologies vary, comparing cities' water efficiency through the use of this metric is not recommended.)


More critical analysis

http://www.slate.com/articles/technolog ... irage.html
or perspective, that goal of 199 gallons per person per day by 2035 is twice California’s current statewide average water consumption. One of the best in the West, San Francisco, uses less than a quarter of the water per person as Vegas—just 49 gallons per person per day.


http://digitalscholarship.unlv.edu/cgi/ ... thropology

(note that LV includes re used wastewater and CA does not, so the numbers are not strictly comparable)

certain aspects of water use such as the amount of lawn
a household can own. Aside from residential use, a large amount of
water is still used in other areas of communities, such as golf
courses. A golf course can use up to 6.3 acre-feet of water per acre
of land without penalty. That’s over 2 million gallons of water for
each acre per year

Last edited by Valuethinker on Mon Mar 20, 2017 9:16 am, edited 3 times in total.

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Re: Investing in - WATER - thoughts

Postby Valuethinker » Mon Mar 20, 2017 8:42 am

Valuethinker wrote:
SittingOnTheFence wrote:
Valuethinker wrote:Part of the solution is rigorous efficiency. Las Vegas has ?doubled? in population but actually reduced water use. But there are still golf courses and green lawns-- they are not there yet. And they have been building intakes at successively lower levels in ?Lake Powell? because the reservoir level has fallen so much. And buying up other peoples' water rights. But that doesn't create more water.


Lake Mead. Also LV was paying homeowners to tear out there grass but I don't know the specifics.
As for 2x the population and reducing water use, not so sure about that. Do you mean gals/capita?
The golf courses are using recycled waste water.


Thank you. I need to find some cites-- it's clear I don't have a good enough picture.

Consumption per head did drop, but I am implying it dropped by more than 50% and that seems extreme.


See post above.


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