status is none of yer' damn business!! :-)
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Water: The Ultimate Commodity
by Jim McWhinney (Contact Author | Biography)
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In the closing days of 2005, the PowerShares Water Resources Portfolio became the most recent addition to a growing number of ways to invest in water. This new exchange-traded fund (ETF) is designed to track the performance of the Palisades Water Index, an unmanaged benchmark. Why the interest in water? Like gold and oil, water is a commodity - and it happens to be rather scarce. (To see the lastest news in the commodity market, visit Commodity News at Forbes.com.)
Global Water Resources
About 70% of the earth's surface is covered in water, but 97% of it is saltwater, which is unfit for human use. Saltwater cannot be used for drinking, crop irrigation or most industrial uses. Of the remaining 3% of the world's water resources, only about 1% is readily available for human consumption.
Global Shortage
Rapid industrialization and increasing agricultural use have contributed to worldwide water shortages. Areas that have experienced water shortages include China, Egypt, India, Israel, Pakistan, Mexico, parts of Africa and the United States (Colorado, California, Las Vegas and the East Coast), to name but a few.
Pollution also highlights the need for clean water. In the U.S., the dead zone off the Gulf Coast highlights the impact of fertilizer runoff, and methyl tertiary butyl ether (MTBE), an additive in unleaded gasoline, can be found in well water from California to Maryland. Overseas, highly publicized incidents in Russia, China and elsewhere demonstrate that pollution isn't limited to the West. Of course, fouled water supplies further limit the amount of fresh water available for human use.
Indexes
Like any other scarcity, the water shortage creates investment opportunities, and interest in water is at an all-time high. Here are some of the more popular indexes designed to track various water-related investment opportunities:
Palisades Water Index - This index was designed to track the performance of companies involved in the global water industry, including pump and filter manufacturers, water utilities and irrigation equipment manufacturers. The ticker symbol for the Palisades Water Index is ZWI. The index was set at 1000 as of December 31, 2003. It closed at 1351.08 on December 30, 2005.
Dow Jones U.S. Water Index - Composed of approximately 23 stocks, this barometer climbed from 500 to 800 over the 12 months ending December 31, 2005. The ticker for the Dow Jones Water Index is DJUSWU.
ISE-B&S Water Index - Launched in January 2006, this new index represents water distribution, water filtration, flow technology and other companies that specialize in water-related solutions. It contains 20 stocks. The ticker for the ISE-B&S Water Index is HHO.
S&P 1500 Water Utilities Index - A sub-sector of the Standard & Poor's 1500 Utilities Index, this index is composed of just two companies, American States Water (ticker: AWR) and Aqua America (ticker: WTR). In 2005, the S&P 1500 Water Utilities Index rose in excess of 45% .
The Bloomberg World Water Index and the MSCI World Water Index provide a look at the water industry from an international perspective, although it can be rather difficult to find current information about either index. There are also a variety of utility indexes that include some water stocks. (For further reading, see Indexes: The Good, The Bad And The Ugly.)
Investment Opportunities
A look at the holdings of any of the water indexes provides an easy way to begin your search for suitable investments. Companies from blue chip stalwart General Electric to micro cap Layne Christensen are all seeking a piece of the water market. In addition to direct stock purchases, some of the larger firms offer dividend reinvestment plans. Firms seeking to profit from water-related businesses include beverage providers, utilities, water treatment/purification firms and equipment makers, such as those that provide pumps, valves and desalination units.
When it comes to bottled water, the market is growing internationally. Demand is on the rise from China to Mexico, following in the footsteps of the spike in U.S. consumer demand. The Beverage Marketing Corp. reports that the bottled water market in the U.S. grew 19% in 2004, and U.S. consumers drank 26 gallons of bottled water per person in 2005, up from 11.7 gallons in 1995. On the desalination front, some 100 countries currently rely on desalination for at least part of their freshwater consumption needs.
If stock picking doesn't interest you, ETFs, mutual funds and unit investment trusts (UITs) also provide plenty of opportunities to invest in water. The PowerShares Water Resource ETF (ticker: PHO), mentioned earlier, tracks the Palisades Water Index, and the iShares Dow Jones U.S. Utilities Index ETF (ticker: IDU) provides some exposure to water-related stocks. On the mutual find side, as with ETFs, pure-play water funds are hard to find, but funds such as the New Alternatives Fund (ticker: NALFX) and the ICON Telecommunications & Utilities Fund (ticker: ICTUX) provide some exposure to the sector, as do numerous other utility funds and ETFs. (To learn more, see Introduction To Exchange-Traded Funds.)
Additionally, two unit investment trusts that specialize in water-related investments are the Claymore-Boenning & Scattergood Global Water Equities UIT (ticker: CGWEAX) and the Claymore-Boenning & Scattergood U.S. Water Equities portfolio (ticker: CUSWAX).
Conclusion
Recent years have seen an upswing in the demand for investments that seek to profit from the need for fresh, clean water. If the trend continues, and by all indications it will, investors can expect to see a host of new investments that provide exposure to this precious commodity and to the firms that deliver it to the marketplace. There are currently numerous ways to add water exposure to your portfolio - most simply require a bit of research.
Just as with any other investment in commodities or sector funds, wise investors should limit their exposure to water. Generally speaking, highly concentrated investments such as these should not represent more than 10% of the assets in a well-diversified portfolio. Limiting exposure to concentrated positions provides some opportunity to capture positive returns while limiting overall portfolio volatility.
For more information about concentrated portfolios and diversification, see Do Focused Funds Provide A Better Outlook?, Introduction To Diversification and The Importance Of Diversification.
Madoff scandal, SEC role under scrutiny
Goldstein, 76, was among the thousands of investors who trusted Wall Street figure Bernard Madoff with their money while counting on federal regulators to protect the investing public from fraud.
"Somewhere inside of me was the thought that this was a regulated industry. It wasn't. The warning flags were just pushed aside," Goldstein told a House panel Monday.
Red flags were raised to the Securities and Exchange Commission over a decade but weren't pursued, and Republican and Democratic House members said that reflected deep, systemic problems at the market watchdog agency.
Goldstein, a retired New York fabrics distributor, was among the witnesses as the House Financial Services Committee looked into why the SEC failed to uncover what may be a swindle amounting to $50 billion.
Goldstein testified that "everything I worked for over a 50-year career is gone." He held an IRA retirement account with Madoff's firm for 21 years.
Now, he says, he's been forced to cash in life insurance policies to cover his mortgage, but "just can't make it" past April. The only choice he says he has is to sell his home — which he fears he won't be able to do in a housing market that has collapsed.
In a New York City courtroom Monday, a federal prosecutor asked that Madoff be jailed pending trial, saying the disgraced financier violated an agreement with the court by mailing watches, jewelry, cufflinks and mittens worth more than $1 million to relatives and friends. The judge said he would rule on the request after both sides submitted written arguments.
Thousands of individuals, including ordinary people and Hollywood celebrities as well as big hedge funds, international banks and charities around the globe, lost money investing with Madoff. A prominent French financier who had entrusted his fortune and his clients' money to Madoff was found dead at his office in New York on Dec. 23, an apparent suicide.
The SEC's internal watchdog, Inspector General H. David Kotz, said he is so concerned about the agency's failure to uncover Madoff's alleged Ponzi scheme that he is expanding the inquiry called for last month by SEC Chairman Christopher Cox. Cox had pushed the blame squarely onto the SEC's career staff for the failure to detect what Madoff was doing.
Kotz told the House hearing he will examine the operations of the SEC's enforcement and inspection divisions and will make recommendations, steps beyond what Cox had called for.
It appears that the complaints against Madoff's operations by securities industry executive Harry Markopolos and others were "brought to the right place" within the SEC, Kotz said, and to enough people that action could have been taken.
Among other facets, Kotz's review will delve, as Cox had asked, into all SEC staff contacts and relationships with the Madoff family and the firm — and the possible impact on staff decisions.
Kotz is examining the relationship between a former SEC attorney, Eric Swanson, and Madoff's niece, Shana, who are now married. As an SEC attorney, Swanson was part of a team that examined Madoff's securities brokerage operation in 1999 and 2004. Neither review resulted in any action against Madoff, a former chairman of the Nasdaq Stock Market who was a member of SEC advisory committees.
If he were to find evidence of collaboration between SEC staff and Madoff's firm, Kotz told the hearing, he would call for the strictest measures against those involved, including dismissal and possible referral to the Justice Department for criminal prosecution.
To Rep. David Scott, D-Ga., such collaboration was self-evident. Madoff "could not have done it without some complicity," he insisted, and for SEC staff involved, "Their heads have got to roll."
"Clearly, our regulatory system ... failed miserably and we must rebuild it now," said Rep. Paul Kanjorski, D-Pa., who presided over the first congressional airing of the Madoff scandal.
In the Senate, Banking Committee Chairman Chris Dodd, D-Conn., and Sen. Richard Shelby of Alabama, the panel's senior Republican, announced that they have opened an investigation of the Madoff affair.
The Securities Investor Protection Corp. and the trustee handling the liquidation of Madoff's firm announced that they mailed more than 8,000 claim forms to customers on Friday.
SIPC's president, Stephen Harbeck, faced pointed questioning at the hearing as lawmakers spelled out the math: an estimated $50 billion in losses from Madoff, but just $1.6 billion available to SIPC. The industry-funded organization, created by Congress to protect investors when a brokerage firm fails, can provide funds up to a maximum of $500,000 for each customer.
Lawmakers, many of whom had received calls from constituents and charities in their districts that lost money, jumped on the opportunity to show concern. The hearing was held on the final day of the current Congress.
Republicans warned against rushing to new regulation as a response to the SEC breakdown.
"What we may have in the Madoff case is not necessarily a lack of enforcement and oversight tools, but a failure to use them," said Rep. Spencer Bachus of Alabama, the panel's senior Republican.
Thanks bud. Will check NANX out.
Good morning people.
You sure that got that right FJ. Key words are "JUST BEGUN".
lol, good people there. Wise to listen to their advice.
I agree. Something coming soon for PURO. Chart is looking sweet too!!!
PURO chart.
PURO Chart. Finished up 44% at HOD. Still room for this to move and also looking for company updates soon.
SSCC look interesting. This a long term play for you or just a trade? Any info you can share about it?
Me neither Ford.
PURO up 44% today and closed HOD. More coming for this one people.
Sure did. The hammering will continue tomorrow.
LOL, closed at HOD to boot.
.20's easily.
LOL and damn near the 1 million in volume.Tomorrow we gonna rock some more.
LOL Woohooo!!!!
.18 is up!!!!
Would not surprise me the least little bit.
LOL, good question.
Oh yeah. Good place to start tomorrow from no doubt.
Little over 15 minutes left. Can we get to .18?????
PRSC 10 million float. Seems everyone is waiting on a NEw Jersey contract to be finalized worth 50 million. Todays candle will will be very important.
Drinking Water Statistics
Each year more than five million people die from water-related disease. (20)
30 percent of water-related deaths are due to diarrhea. (21)
84 percent of water-related deaths are in children ages 0 – 14. (21)
98 percent of water-related deaths occur in the developing world. (21)
For the first time, the number of people without improved drinking water has dropped below one billion. (1)
Less than 1% of the world's fresh water (or about 0.007% of all water on earth) is readily accessible for direct human use. (2)
A person can live weeks without food, but only days without water. (3)
A person needs 4 to 5 gallons of water per day to survive. (4, 5)
The average American individual uses 100 to 176 gallons of water at home each day. (6, 7) The average African family uses about 5 gallons of water each day. (7)
World Water Coverage. View larger map.
90 percent of all deaths caused by diarrheal diseases are children under 5 years of age, mostly in developing countries. (9)
Sustainable management of water resources and sanitation provides great benefits to a society and the economy as a whole...access to safe drinking water is essential for achieving gender equality, sustainable development and poverty alleviation. (8)
Water systems fail at a rate of 50% or higher. (10,11)
Poor people living in the slums often pay 5-10 times more per liter of water than wealthy people living in the same city. (12)
http://water.org/waterpartners.aspx?pgID=916#Ref_20
New chart. Breakout coming here/
It's possible.
NTWK - New HOD .78. Chart below.
Roger that.
Indeed it is. Nothing a little buying frenzy could fix
We'll see, just having some fun. Depends on how many buyers we get int he last hour.
Ok we will break that .18 resistance and move quickly to .20 just before close.!!! LOL.
saying .18+. Think we will see some serious buying EOD.
LMAO - Me too.
PURO - Any news regarding contracts in Sierria Leone, Malaysia, British Columbia or anywhere else we have not heard about will send this up ina major way. I have placed my bets.
AIG is good for the long term when picking up a few here and there.
2 1/2 hours left, Anyone think we can hit 1 mil in volume today??
"just know that over my many years of trading/investing some people choose to harass T/A's because they can"
And due to this fact more and more TA's are not talking to individual investors anymore without the companies permission first.
NTWK .75 now.