(And the reason why it is about to make
a few smart investors very rich)...
Dear Fellow Market Hound,
Las Vegas is sinking...
And the reason why could make you very rich.
Let me explain.
The Plague of the Sinking Cities
By the way, it's not just Vegas.
Mexico City, New Orleans, and Milwaukee... along with Shanghai, Tianjin, Taiyun, and 43 other cities in China... are all also sinking. So are Venice, Sydney ,and Melbourne... rural South Dakota, Nebraska, Colorado, Wyoming, Kansas, Oklahoma, Texas, and New Mexico.
The Jinmao Mansion, China's tallest building. sank a few inches at the foundation just last year. And in Cangzhou, it's gotten so bad the roads actually buckle, old buildings tilt and topple, and lamposts sometimes just pop out of the pavement like the were planted in butter.
The cause is... water.
We're using a lot more of it. And that there's a lot less left, especially under some of the world's biggest cities, than most people think. Take the aquifer.
An aquifer is a huge deposit of soft rock and silt under the earth.
It soaks up water like a sponge.
Hundreds of cities are built on top of aquifers because that's where the water is. You can suck it out of the aquifer like a kid in summer slurping juice from a water ice. But that water, like all overtaxed resources, can't last forever.
As soon as the water gets used up, the ground in the "aquifer" compacts. And the cities sitting on top of the soil literally start to sink into the earth. It's that simple.
Vegas, a desert town that sports dancing fountains on the strip and processes as many as 35 million tourists per year, nearly sucked its aquifer dry. Now they're desperate to get water elsewhere to keep sinkholes from swallowing the center of town.
Nearby Lake Mead, behind the Hoover Dam, is already half empty. So Vegas plans to build a $5 billion, 345-mile pipeline stretching from central Nevada into the neon city.
Local Farmers Call It "Craps Versus Crops"
Local farmers and little towns might not be happy about coughing up their water supplies to benefit the big city. But it's still happening. Almost everywhere you look.
In China, for instance, as much as 72% of the water supply for cities comes from deep under the cities. However, now the scenic springs have started to dry up. Former rice fields have turned to sand. Rivers have turned to dust.
Every inch Shanghai sinks, they lose over $30 million in property damage.
They're in the hole, so far, over $35.1 billion. Which is why China's three biggest cities have not only shut down hundreds of groundwater wells... but they're also looking to build over 420 miles of water pipeline, also to bring in water from the countryside.
In Mexico's capitol, a formerly "underground" pipe now juts 26 feet into the air, right next to the Monument to the Revolution... the underground metro now looks like a sinking roller coaster... and 100-year-old underground pipes burst as often as 40,000 times per year.
They're also looking to rebuild their water-delivery network, including plans for freshwater pipeline into the Cutzamala River, over 80 miles away.
In Sydney, plants get watered with the shower runoff... in India, farmers have drilled over 21 million "tube wells" looking for new water... and in Egypt the mighty Nile barely reaches the Mediterranean.
Supplies are that scarce.
Here's what's strange...
Water is more vital than any other commodity on earth. Yet not only do most of us never give it a second thought... but you can't trade it directly, on any financial exchange, like you can wheat and grain, orange juice, steel, gold and silver, or natural gas and oil.
Still, world water trade is soaring.
Turkey ships water to Israel and Cyprus. Singapore buys water from Malaysia. Scandanavia will soon ship enough water to Iran to fill the equivalent of 1000 Olympic-sized swimming pools per day.
It's only a matter of time.
That doesn't mean, though, you have to wait to start making money.
The Secret Growth Market The shocking fact is, most investors don't know water-related investments have already made silent fortunes for some of the world's more savvy market players. Holding just one water stock -- Aqua America -- would have given you gains 49 times larger than other investors made holding the S&P 500 over the last 10 years. You also could have made, just on water stocks, more than other investors made on Wal-Mart.. Home Depot... IBM... American Express... even ExxonMobil, McDonald's, or General Electric. Top water stocks quietly crushed the market... with gains of 332.8%... 412%... 354%... even 766% and 818%. Compare that to Home Depot, up only 303% over the same period... Wal-Mart up only 351%... or American Express, up only about 370%. Buffet's Berkshire Hathaway is already heavily invested in this. They've got a big position in water pipelines and valve equipment. And Mario Gabelli is in too, with a stake in Watts Water Technologies (WTS). Mega-rich T. Boone Pickens has already socked away over $200 million, just buying up water rights in Texas. Take a look at this chart...
Most Investors Overlooked
It's no wonder the Christian Science Monitor calls water stocks "blue gold"... and Fortune magazine is calling water investing "the oil of the 21st century." What's more, these water stocks usually pay dividends. For instance, the biggest publicly traded water company has shelled out a healthy dividend to investors every year since 1945 -- with 15 increases in dividend payouts just in the last 14 years. You get the point. But does all this mean you've already missed out on the biggest gains? Not at all. That's why I'm writing to you today. Let me introduce myself...
Huge Untapped Potential, Yours FREE My name is Chris Mayer. Maybe you've seen me on Fox Television's weekly "Bulls & Bears." Maybe you've read my analysis in the Daily Reckoning, Grant's Interest Rate Observer or even my own Capital & Crisis, a private subscriber-only market analysis service for value-savvy investors. Here's the thing. If you know me at all, you know how I typically pick winning stocks. As a former commercial banker, I typically avoid more "exciting" companies. I just don't like taking risks. And most of the time, I don't thing you should either. When I read companies or investing situations for the bank, for instance, I was making lending calls on $400 million companies. At those levels, you don't mess around. You don't take chances. And you don't make mistakes. Even a "near-perfect" business can fail to make the cut. Simply because they don't fit the button-down, straight-laced, strict evaluation model an international bank demands. Up until now, I've always used that same strict approach to picking the stocks I recommend to my readers in Capital & Crisis, and to investors everywhere else that I share my analysis. But today, I want to suggest to you a different approach. See, so many of those companies that invite just a slightly higher risk over a dramatically higher opportunity for profits. For all different kinds of reasons. With all different shades of opportunity. And a chance for investors to make not just 10% here and 50% there... but money-doubling, tripling, even money-quadrupling gains. Often in very short order. I call these, for lack of a better term, "special situation" investments. And if you can get in on them before anybody else, you stand to make a fortune. The three water stocks I'm about to share with you are exactly these kinds of "special situation" opportunities that I've been dying to share with more savvy investors, for some time. In fact, I've spend the last year researching just these three opportunities here. And out of the 103 publicly traded water companies in the U.S... not to mention the 359 water-related companies traded worldwide... I'm absolutely convinced these three "special situation" stocks will make you the most money as this trend explodes over the years ahead. I've documented every detail of my research in a FREE report I'll send you. It's called "Blue Gold: Three Blockbuster Water Plays Ready To Burst Wide Open." I'll show you how to send for a copy in just a second. I'll also show you how to get up too a year FREE of many more special-situation recommendations just like this. Along with a guarantee that you'll make at least 300% gains on your initial investment before we're through. But first, let's get back to water so we can take a closer glimpse of what lies ahead...
Set to Soar 500% Higher
Says Lehman Brothers, exploding populations and industrial demand, along with agriculture needs and more, practically guarantee that the market for water-related industry will explode at least 500% over the next decade.
That alone practically makes water stocks in general a surefire bet.
And of course, water investing has already quietly outperformed oil or natural gas, gold, silver, biotech, and even regular old tech -- all during one of the biggest resource booms in market history.
You just don't hear about it because water, unlike other essential resources, isn't traded on any commodity exchange. Will that be the case forever? Absolutely not. So should you start snapping up shares in water utilities?
No. Because I'm about to give you three much better ways to invest...
"Blue Gold" Blockbuster Stock #1:
The Single Biggest
Under your feet, the U.S. has nearly 700,000 miles of aging pipeline and pumping stations. Some of these U.S. systems were built during World War II. Others are over 100 years old.
Old pipes wear out.
When they do, pressure falls. Water leaks out. In fact, U.S. cities lose as much as 30% of their clean water supply to leaks alone. That's not all. Leaks reverse pressure and suck in things like arsenic, human waste particles, chlorine, and decayed metal.
Think about that the next time you fill a glass from the tap!
It's not good. Yet, with over 55,000 public drinking water systems... about 20,000 public wastewater treatment plants... and around 75,000 dams and reservoirs... in the U.S. alone... you're also looking at a massive opportunity, thanks to all that infrastructure waiting to be updated and repaired.
Here's the kicker...
New 2005 water purity laws from the EPA demand that those systems get updated. U.S. spending on new water infrastructure alone could top $1 trillion by 2015, according to both Merrill Lynch analysts and the Wall Street Journal.
And remember, that's just the U.S.
China's market for water-systems infrastructure will grow at nearly twice the global rate -- with as much as $250 billion in new spending, just between now and the end of 2008.
While a lot of water-industry infrastructure companies will make a fortune replacing or providing that equipment, the one I've pegged for you here could crush all the rest on total shareholder performance over the months ahead...
How To Ride The "Blue Gold"
Buyout Boom for Even Greater Profits
One of the keys to rebuilding worldwide infrastructure, obviously, will be replacing those many miles of pipeline. But there's more. See, the water in the pipes doesn't move by itself... it needs huge pumps to keep it flowing.
Some of these pumps are so powerful, they move water as fast as 40,000 gallons a minute.
Without these pumps, you'd barely get a trickle from your showerhead. Your hose wouldn't spray enough to water your garden. Your kitchen tap would do nothing but drip, even all the way open. Your toilet would never refill.
These mega-pumps are the true "beating heart" of the water-delivery network.
This first company I want to reveal to you dominates the water-pump market. Now I realize, that all might sound pretty dull to the average cocktail-party investor. But you'll have the last laugh when you share this little string of facts...
Last year, sales this pump company's sales were stunning $231 million. That was with a 17% increase in U.S. sales and a 21% jump in overseas sales. "The demand for clean water," says the company's top brass, "has never been stronger." Take note, we're talking about a company that started with a handshake back in 1933.
And it's not just sales.
Earnings per share for this company just jumped a mind-boggling 180%. Net profit on these sales grew even faster still, giving the company enormous operating leverage and a huge pile of cash. Plus, the company carries zero debt. It's no wonder they've paid shareholders growing annual dividends every year for the last 33 years straight.
That's just the boring fundamentals.
Here's the "special situation" that makes this company even more attractive. Even though this outfit is huge in its sector, it's Wall Street footprint is tiny. So not only could soaring growth send the stock skyrocketing... the size of this company makes it an extremely ripe takeover target too. You should know, in the water industry especially, massive takeovers happen all the time. And when they do, shareholders make out like bandits.
Just last year, there were nine major takeovers in the water-pump industry alone.
As Stephen Hoffmann, an analyst for U.S. Water News, says, "It's safe to say that the market for the enormous range of pumps in the water industry is at least a multi-billion dollar market and growing."
One more Cherry On This Sundae
Here's something else you're going to see before other investors...
Besides being a takeover target, this company is also a backdoor play on the energy boom. Virtually all the major oil producers who tap into Canadian tar sands use this company's pumps. Meanwhile, the U.S. government also contracted this company to provide pumps in Iraq.
How high could this fly?
Well, last year, this company cranked out earnings of $1.02 per share. So let's do the math. With this year's consensus earnings looking to hit $1.63... and, I believer, an outlook for $5 earnings per share over the years ahead... you can multiply the current share price by a conservative 15 times earnings... and you're looking at a home-run share price as high as $75 just two to three years from right now.
In other words, you'd be tripling every single dollar invested.
The company I'm talking about is still small. It's got a market cap of just $300 million. Which is why this particular "special situation" opportunity won't last for long. Simply because, when a lot of investors crowd into a smaller company, the share price can soar fast. Only the earliest investors get in at the lower share price.
This is also why I'm going to limit many of these "special situation" recommendations only to a much smaller, more savvy group of investors. For that reason, I want to send you the FREE report I've just written.
Again, it's called, "Blue Gold: Three Blockbuster Water Plays Ready To Burst Wide Open." I'll show you how to get a copy as soon as this evening, if that's what you'd like to do. And that's just the beginning...
The "Special Situation" Stocks
Most Other Investors Will Miss
Like I said, I come across opportunities like this all the time.
Not just in the water industry, of course.
In fact, these more sophisticated "special situation" picks are everywhere.
Excellent companies that are just a little too new and untested. Or companies with a breaking turnaround story. Companies targeted for a mega-acquisition. Or a solid, conservative play that just happens to list on an exchange where most Wall Street investors fail to explore.
I've been dying to share these kinds of "special situation" opportunities with you for a very long time. Finally, I can. That's why I want to introduce you to a completely new service... with an entirely new way of looking at the world of investing, trading, and making profits. It's called "Mayer's Special Situation Report."
And in every issue, every alert, every update, it gives you and other savvy investors the chance to jump on the kinds of opportunities most other mainstream market devotees will never discover.
How often do these "special situation" opportunities come up? In my last 24 recommendations, I've spotted the opportunity for "special situation" profits in as often as one in every three opportunities. But I had no viable way to share them with you until now. I'd like to start sending you these "special situation" alerts as soon as possible.
Your FREE copy of "Blue Gold: Three Blockbuster Water Plays Ready To Burst Wide Open" is where we'll get started. Here's another glimpse of what you'll find inside...
"Blue Gold" Blockbuster Stock #2:
Making Money, Drop by Drop
With only 2.53% of the world's water being fresh... and most of that frozen in glaciers... companies that find, transport, treat, and deliver H20 to the masses stand to make a fortune.
Take bottled water.
It's a $100 billion industry. And growing.
Bottled water sales in
In
And nobody drinks more bottled water than we do right here in the
Even though, ounce for ounce, you pay about four times more for bottled water than you do for a gallon of gasoline -- even with gas at today's eye-popping prices.
Bottled water is the fastest growing drink sales category in the world.
Why?
Dying For a Drink
The big money isn't in bottled water. It's in water treatment.
Consider...
- Half of all hospital beds worldwide are filled with people suffering from water-related diseases. Around the world, about 30,000 people a day die from water-borne diseases -- the same as crashing 150 jumbo jets every day.
- In
- Meanwhile, less that 15% of
- Only 310 of the 669 largest cities in
- In the
- Worldwide, we pollute as much water as we use up every year -- with fresh water disappearing faster than the population rate, according to the World Bank. What about desalinized water? It's expensive. You need energy to remove the salt -- which can bump up the cost as much as 20 times what we pay for fresh water to irrigate our crops.
The second "special situation" company you'll find in your FREE copy of "Blue Gold: Three Blockbuster Water Plays Ready To Burst Wide Open" has booked rich contracts to solve those problems. And in the process, could make you very rich as a shareholder too.
For instance, the Chinese Ministry of Water Resources just announced a plan? to build a mind-boggling 360,000 new waterworks. Within the next three years, 90% of Chinese cities will need treatment plants. Meanwhile,
This company has booked many of the contracts to provide this technology. This is a cash bonanza for anybody selling water treatment technology in Asia. And for investors who hold their shares.
The Water Stock to Own
If You're Only Buying One
Maybe that's why this one company, detailed in your FREE report, has been called a "proxy for the entire global water crisis."
Not only do they have a lock on major projects in
With more than 16 years in the general water treatment business, this is the oldest listed water company on its exchange. And the total value of new business this company in 2005 was tenfold what it was in 2002. Today in 2006, it's now nearly four times larger than it was at this time last year.
By the way, yes, they also own a huge chunk of the desalinization market, both in
Plus, this $1.2 billion company has loads of cash.
And you don't have just me saying this. JP Morgan and Bloomberg analysts both peg revenue for this company to soar six times over within the next two years. With net profit growing 294% by the middle of 2008.
That's astonishing.
But so is this...
What makes this a "special situation" stock is the fact that, in March of this year, this company sold off -- for a 20% profit -- an oddball contract they had in the Middle East. This gave them lots of extra cash to reinvest in better projects in
It also tightened their focus on lower risk, higher profit ends of the business. And it erased what would have been a future obligation to fork over as much as $200 million in future projects in
This move alone could double this company's pre-tax profit margins.
There's something else.
In April of this year, this company also picked up a 51% stake in a Dutch company that develops and makes ceramic filtering membranes for the biotech, drug, oil, gas, and petrochemical industries. Very few companies own the expertise to make these kinds of filters, even though they're in high demand.
Plus, as part of the deal, the company I'll name for you in the FREE report also won the exclusive rights to market and sell these new ceramic filers anywhere in the world except Europe. Once
At the current rate, target revenue for this company could rocket to nearly $471 million by the end of 2008. That's a fivefold jump. At these profit margins, that'd put net profit at better than three times current earnings. Which tells me this stock could jump from under $3 today to better than $7.50, in less than 18 months... for a gain just shy of 190%.
How would you feel about nearly tripling your initial investment?
You can read all about it in your FREE copy of "Blue Gold: Three Blockbuster Water Plays Ready To Burst Wide Open," yours along with a FREE trial subscription to my new "Mayer's Special Situation Report" stock alert service.
New Ways To Make Gains,
Everywhere You Look
As I said, don't think we're just talking about undiscovered water stocks.
I come across these "special situation" plays everywhere you can imagine. In every stripe and color. Real estate and land-related companies, manufacturing and mining, shipping companies, utilities, cash-rich companies on foreign exchanges.
I've wanted to let you in on these for a long time.
Finally, with "Mayer's Special Situations ," I can.
ADR-listed investments, takeover-targets, cutting-edge tech that's just found it's footing but looks like an excellent buy. There's really no limit to where we can take this, once you understood that all I'm doing is applying my same cautious banker's pragmatism to a much wider, more exciting field of opportunity.
The latent potential for a "special situation" investment lies in virtually any company we'll look at. Last April, for instance, I pulled together another special report. Inside, I named five stocks with a higher-than-normal stockpile of net-tangible assets.
I sent this report out to a small group of profiteers, including people just like you. Two of the stocks have more than doubled already. And on average, anybody who took on all five recommendations has already socked away gains of 63% gains on the whole portfolio.
I would have loved to share these stocks with everybody.
But many of them were just too small to name for a wide audience. I expect to discover plenty more of these cash-cranking investments over the year ahead.
Not just opportunities we'll uncover inside balance sheets, but foreign-listed stocks, LEAP plays, option plays, companies on the brink of a major share buyback, upcoming spin-offs, and special dividend announcements.
I could go on with that list forever.
Back-door plays that give you unseen ways to get in on a booming market, "access-constrained" investments that open doors not usually obvious to most investors, even stocks your broker might not know how to buy yet, which I can show you how to snatch up while it's still early and there's still time for you to make a fortune on the play.
You can gain access to these special opportunities for up to a year FREE, as part of an introductory offer on my new "Mayer's Special Situation Report" service.
Details in just a second.
But first...