Last year, @thestalwart and @boes_ , working for a different outlet, asked some of us what our favorite trade for the next decade was - I submitted a short note on WATER.
Here's another guy fleshing out how to play it. Embedded in his answer you may see mine.
The last line of the movie, printed on a placard, is “Michael Burry is focusing all of his trading on one commodity: Water.” It sounds very ominous. Can you describe this position to me?
Fundamentally, I started looking at investments in water about 15 years ago. Fresh, clean water cannot be taken for granted. And it is not — water is political, and litigious. Transporting water is impractical for both political and physical reasons, so buying up water rights did not make a lot of sense to me, unless I was pursuing a greater fool theory of investment — which was not my intention. What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas. This is the method for redistributing water that is least contentious, and ultimately it can be profitable, which will ensure that this redistribution is sustainable. A bottle of wine takes over 400 bottles of water to produce — the water embedded in food is what I found interesting.
The El Nino is still of significant magnitude. The Mid-America flooding is something we did not expect to start until Spring. Next up, the PGA hits Southern California - watch the weather at Riviera CC.