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Searching for Synthetics and Striking Water
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ICO, Inc. (ICOC) has been sinking in spite of inclusion in a Motley Fool article saying that Synthetics have been doing quite well. Therefore, after selling ICO I considered buying another "synthetic". The companies Motley Fool includes in this group turned out to be a quite varied lot. Looking each company's "competitors" at Yahoo I see that Yahoo puts them in quite a variety of categories. ICOC is in Yahoo's "chemical company" category, where the rising stars are potash, nitrogen and fertilizer companies. There's nothing wrong with that, but I've already chosen some ag-related stocks. I didn't (yet) settle on a synthetic for the Strategy Lab fund. Meanwhile, I've been reading how water -- yes, water --is likely to be the next scarce product. Although it is "free", living in Colorado I've always been aware that there can be too little to go around for irrigation. Plus, in parts of the world making it safe to drink is a growing problem. This is also close to home because Colorado has a recent crisis with mine drainage contamination and the possibility that a blocked tunnel could blow out releasing heavy metals into the Arkansas River. In addition, there is an increasing need for super-purified water for scientific use. So for StrategyLab I ended up buying water-related companies Veolia Environnement SA (VE), which among other things provides drinking water plants, wastewater decontamination and recycling plants and Lindsay Corporation (LNN), even though Lindsay is involved in ag-related-irrigation. Well, I started out looking for synthetics and ended up with H2O which is about as un-synthetic as you can get. However during the search I found a promising MicroCap, American Pacific Corp. (APFC), which manufactures specialty and fine chemicals. It is too small for my contest criteria but I bought it for my Magic MicroCaps fund. | ||
Comments (5)
I've looked a lot at water as well, but I like ETFs for better exposure and less risk. PHO is Powershares water ETF that has no more than 4% weighted to one position. I don't own it in the SLO yet, but it is on my radar screen. Your thoughts?
--Jonathan
Posted by Jonathan Coyle | February 28, 2008 8:17 PM
I like PHO and I love ETFs in general; however to remain compliant we are allowed to have only 25% of our StrategyLab fund in ETFs. I save my ETF holdings for things I can't get any other way such as shorting and some foreign companies. So instead of investing directly in PHO I looked at the stocks they hold and bought two of them, VE and LNN.
Posted by toroandbruin | February 29, 2008 1:12 PM
I've been interested in water for sometime, for the same reasons you cite. I was trying to deduce who was best at desalinization - but it's likely a large conglomerate like GE.
I purchased PHO and CGW in real life, but am always on the lookout for a different angle on water. I see three or four ways to play it; those that own water rights, those that can turn salt into fresh, and those that move it.
Outside of the ETF's - I haven't found what I'm looking for.
Posted by Keith Barton | March 1, 2008 8:50 AM
Today I read another water article which leads to even more related companies and ETFs, which again lead to yet more. It's at http://www.forbes.com/2008/03/01/water-shortage-veolia-markets-equity-cx_ra_0229markets28.html?partner=yahootix
The article mentions that desalinization is so expensive because it takes a lot of electricity; however, the technology is improving.
Also, at the bottom of this article there's a link to the original Forbes article I read and another interesting one on China.
These leads should keep me busy doing more research this weekend.
Posted by toroandbruin | March 1, 2008 11:35 AM
Toro,
leave it to Keith to use angle and water together, a trout angler he is.
Arvada ,Co is where young DuffBeer lives 15 minutes from GoldenCity Brewery. 2nd largest brewer in Golden !!!!!
Hope those great micros get there water they need .
What will DuffBeer drink if they do not ????
Back in the 70's I worked for Jewel in Chicago . I never trusted
anyone with my investing my money. I had no one to teach me nor to learn from so off to the books and watching stock market shows.
I would read the WSJ everyday and during nice weather ( some winter Denver is having this yr ) I would sit outside and eat my brown bag lunch. A little old man noticed me day after day and as he would pass me he would say one of two things ---
" profit ,take profits even if it is only 1 dollar"
or
" water buy water we will always need it "
Toro you know as Marc does the west fights for water.
I like Lindsay you see a lot of their units across the eastern slope of Colorado as you approach Denver.
Nice post
Cheers DuffBeer
Posted by duffbeer | March 2, 2008 12:15 PM