This from Martin:

I’m drinking on the job again.

No, not that kind of drinking. I’m swigging away from a one liter bottle of fresh water. Like most folks, I thought nothing of it when I bought it. I took its availability for granted, even though it’s that cool Voss stuff all the way from Norway.

But sadly, that’s not the case for approximately 40% of the world’s population, which lacks adequate fresh water supplies. What’s more, the United Nations says that two out of three people will be living in areas under “water-stressed” conditions by 2025.

Water shortages currently affect 80 countries and within 50 years, more than half the global population will be living with water shortages.

But hang on a minute… isn’t 71% of the Earth’s surface made up of water?

Yes, that’s true. But 97.5% of it is seawater, leaving just 2.5% that is drinkable. And only about 0.1% of all water is readily available. Most of it is locked up in glaciers, groundwater, and soil.

And water supply problems are only going to get worse… which opens up some very good investment opportunities.

Here’s the deal…

More People = More Pollution = Less Water

In 1900, there were about 1.6 billion people on Earth. Today, there are 6.5 billion. By 2025, the world population is expected to rise to 9 billion.

But here’s the problem: During the 20th century, human water consumption swelled six-fold and global water demand already exceeds supplies by 17%, according to the Population Institute.
And World Bank figures show that demand is doubling every 21 years. By 2020, the two billion extra people will require 20% more water than is currently available, according to the International Food Policy Research Institute.

And speaking of food, global population growth leads to increased industrialization and pollution. U.S. energy production requires about 40% of fresh water withdrawals. And the fact that people are also living longer means not only less drinking water, but also less water available for food production.

Crop production already claims 65% of fresh water, compared to 25% for industry and 10% for households. There is 7,000 liters (1,900 gallons) of water used for one kilogram of grain-fed beef… 5,000 liters (1,300 gallons) for one kilo of rice… and 1,500 liters (400 gallons) for one kilo of corn, according to the U.S. Geological Survey.

The point is… when it comes to water needs, it doesn’t matter one iota what the economy or stock market is doing. Every single person on the planet needs water… period. And with H2O in shorter supply, the world is set to invest approximately $800 billion over the next decade in order to improve the situation. This is the time for smart investors to run with this opportunity…

The China Problem

For all the talk of federal budget plans, economic bailouts, stimulus packages and all the other dizzying (and often demoralizing numbers), money is no object when it comes to satisfying the world’s water needs.

Put bluntly, no water = no people. Certainly no need to worry about the economy, unemployment, the real estate and auto industry debacles, or anything else if you’re not actually alive!

Of that $800 billion number I just mentioned, China has set aside $200 billion for its water infrastructure over the next decade. It makes the U.S. government’s $8.4 billion look like small potatoes in comparison – and woefully inadequate. The Environmental Protection Agency forecasts that the U.S. will have to spend $277 billion on water infrastructure by 2019. Nevertheless, China has some serious problems…

Two-thirds of the country already faces water shortages. Its annual water shortage is 40 billion cubic meters and it uses 30 more cubic kilometers of water than is replaced by rain.

Of its 1.3 billion people, 300 million don’t have access to clean drinking water.

According to Summit Global Management, “75% of China’s drinking water is unsuitable for drinking and cooking, and 80% of China’s seven major river systems no longer support fish.”

What’s worse is that at the current growth rate, China’s population is doubling every 12 years. More people = more food/drink needs = more agriculture development and industrialization = more pressure on water supply and demand.

So what’s the solution?

Thirsty For Profits? Try These Water Stocks…

Let’s kick off with a broad investment option. Because of their increased flexibility, lower costs, and the fact that they trade like stocks, I like ETFs (exchange-traded funds). With water, you can go for…

~ PowerShares Water Resources (NYSE: PHO), which tracks the price and yield performance of the Palisades Water Index. The fund includes big water companies like Veolia Environnement (NYSE: VE) and Ameron International Corp. (NYSE: AMN)

~ Claymore S&P Global Water Index Fund (NYSE: CGW), whose results aim to replicate the performance of the S&P Global Water Index. Like PHO, it holds Veolia and Aqua America Inc. (NYSE: WTR), plus Danaher Corp. (NYSE: DHR) and Severn Trent in England.

Breaking it down, Paris-based Veolia is one of the biggest water infrastructure stocks and is split into four groups: Water, Environmental Services, Energy Services, and Transportation. Click this link for a more detailed company profile and rundown of its water management operations – it has a very broad reach in the industry. With a P/E ratio of just 9, it’s trading at a hefty discount and coughs up a fat 15.8% dividend yield ($3.12 per share annually), too.

Aqua America’s fourth quarter revenues rose 7%, resulting in 3% earnings growth. With an aggressive acquisition policy that has seen the firm tie up more than 100 buyout deals over the past few years, it has boosted its customer base from 245,000 in 1992 to 950,000 today. It applied for $80 million worth of price increases last year, with $61 million approved. This resulted in a 10% revenue increase in 2008 and a 15.7% profit margin. It pays a 2.8% dividend.

There’s another option, too…

Salty Solutions

The National Academy of Sciences recently stated, “Desalination is a realistic option for increasing water supplies.”

In fact, global spending on desalination is set to more than double in four years in an attempt to boost the 11 billion gallons of drinking water that the process currently creates every day. That’s because even that hefty-sounding number still only represents 1% of water usage.

But desalination capacity is about to surge by 45% over the next seven years, producing an extra five billion gallons of water per day. And with 1,200 desalination plants worldwide, the cities of Las Vegas and San Diego (based in two states suffering some of the most severe water shortages in the U.S.) are discussing plans to build new plants themselves.

Yes, desalination is an expensive, energy-intensive process. But there’s one company that is attempting to solve it by not only producing clean water, but also recovering and recycling as much energy and waste as possible. It just signed a deal with China’s largest plant, too.

My colleague Marc Lichtenfeld, who’s as bullish as I am on the water industry and water stocks, added this small-cap, fast-growing company to the Xcelerated Profits Report portfolio last month. And just this week, he added another water-based company, whose shares are up around 230% over the past 18 months. Sales are continuing to rise – and demand for its products is red hot. It’s also active in China.

Boy, after all that, I’m really thirsty now. So while I find some more water, here’s what I’d like you to do. While I can’t reveal the names of those two water stocks that Marc recently added to our portfolio, what you can do is check out how you can become a member yourself. Go here for full details on the Xcelerated Profits Report. And if you like what you see, click this link to start profiting right away.

Water is critical. We can’t live without it. But with population growth, pollution, industrial expansion, and climate change resulting in shorter supplies as demand continues to rise, it’s no wonder governments around the world are pumping billions into the industry for infrastructure improvements. And water stocks could be one few areas that could truly benefit in this wretched global economy.

Source: Water Is The World’s Most Critical Commodity… Here’s How You Can Profit From It

Certainly, the market’s recent dramatic swings have scrambled the heads of many investors. Mostly, it’s been a nasty slide down — a history-making drop that has caused a lot of agitation and remorse. Many investors are giving up. “I just don’t have the stomach for it anymore,” a semi-retired computer programmer told the Wall Street Journal, as he moved his remaining assets into T-bills.

I share the computer programmer’s frustration and anxiety. But now is the time to really pay attention. The stock market’s history-making drop may be creating some equally historic buying opportunities.

This bear market has few precedents. Really, you have to look back to the 1930s to find anything like it. According to Barron’s, at the S&P 500’s late-November lows, the blue chip index had given back a decade worth of gains. And even after the market’s recent rebound, 2008 would still be the worst year for stocks since 1931, when they dropped 53%. In the whole of the 20th century, no decline has exceeded 50%, save for the 1929-32 bear market.

Other tidbits of interest from Barron’s: The current bear market is 284 days old. We are down almost exactly as much after 284 days as the 1929-32 and 1937-38 bear markets were after 284 days. Whether our bear market looks ultimately more like 1929-32 or 1937-38 is an open question, of course. The former went on to post a total loss of 86% top to bottom. The latter, though, rallied and made up 50% of the losses in the next six months. Another hopeful message: The average time to recoup a bear market loss has been 22 months, excluding the 1929-32 collapse. As with the big crash, so with the rebound — it will come when people least expect it.

Resource stocks look like they’ve already had their 1929-32 style crash in just the last few months. Many resource names plummeted 80% or worse from top to bottom. Even companies that looked like they were in decent financial shape only a few months ago are now scrambling to raise liquidity and stave off a financial crisis.

It reminds me of what Joe Scaminace, the CEO of OM Group (OMG:nyse), said during the company’s latest conference call: “We believe very strongly that the battle will be won and lost on the balance sheet in this environment.” I agree with him. A strong balance sheet means that financially, you are in control of your own destiny. It means you don’t need to raise money, nor do you have a looming debt coming due soon. It means you’re going to be a survivor. It’s going to come down to the survivors. The upside could be spectacular on the other side for them.

OM Group is among those with no net debt and plenty of excess cash. It’s also immensely profitable, even at these lower commodity prices. The long-term demand for cobalt-needy products, such as rechargeable batteries, provides a bright looking future (particularly as it relates to vehicles). Not without peril, of course, but I’d rather face those perils with financial strength of the kind OM has than weaker, more speculative ventures.

I also like companies like Ameron Intl. (AMN:nyse) and Contango Oil & Gas (MCF:amex), both of which have plenty of excess cash and no net debt.

Balance sheets contain the kinds of critical details people tend to ignore when times are good. But if ever there were a time to focus on balance sheet strength, it is now!

“A period of prosperity contains the seeds of its own destruction,” observed that storied investor, Phil Carret, in his book The Art of Speculation (1930). “Businessmen forget the painstaking care by which they have built up their enterprises and commit themselves to reckless plans of expansion.”

This financial calamity we’re going through now will lead to the demise of those who were reckless and stretched too thin. The benefits will ultimately accrue to those who kept a little something in reserve for just such a rainy day.

One stock in particular I would encourage you to give another look: Texas Pacific Land Trust (TPL:nyse). On Friday, it slipped below $20 per share. Texas Pacific Land Trust owns nearly a million acres of land. At Friday’s valuation, the market value of the whole company is about $200 million. The implied valuation is about $200 per acre. I don’t know that the company has ever sold acres for less than an average price of $200 per acre in the last several years. Last year, the average sale was $1,244 per acre. In the last quarter, ending Sept. 30, the company sold land at an average price of $400 per acre.

It’s hard to say what all the land is worth. The company opportunistically sells pieces over time and uses the proceeds to buy back stock. So as long as it nets more than the $200 per acre in implied value, shareholders win. So far, it’s done that easily.

Of course, that’s not all there is to this company. The company also owns a number of oil and gas royalties. In the last quarter alone, the trust generated $4.6 million in royalty income. This is nearly pure profit. The company has practically no expenses. In fact, it pays more in federal income taxes. My initial estimate put the oil and gas royalties at $20 per share, assuming oil at $70 and natural gas at $7. There is a lot of margin of safety in these royalties alone, even at currently depressed prices.

And finally, what’s great about this old trust is that it’s practically immune to the whole economic crisis. It does not have to sell land. It can sit on it and wait it out. The trust has been around since 1888. It will get through this.

Texas Pacific Land Trust is a low-risk business and a great long-term holding. Today’s market gives you a chance to add to your holdings at very attractive prices. And that, I suppose, is one thing we can be thankful for in all this mess.

Source: Anti-Depression Remedies