Investment Lessons You Can Learn From Bin Laden

September 29, 2006 –

binladen.gifLast week the Dow Jones MarketWatch reported that Bin Laden was seriously ill or even might be dead according to French intelligence reports. Time Magazine cited unnamed Saudi sources as stating that there were “multiple credible reports over the last several weeks” that as a result of a water-borne illness, Bin Laden, was severely ill and most probably dead. Since then, there has been a flurry of denials.

Whether these reports are later substantiated or prove to be false, there is a very important point to take away from this. Simple, clean water, or lack thereof, may have accomplished what USD $1 trillion could not. So far, estimates from well-respected economists regarding the cost of the United States war on terrorism hover at about $1 trillion. And so far, it has not proven enough to bring down the ever elusive Bin Laden. But access to clean water, something that over 1 billion people in this world lack, almost did (or may have).

By 2025, the United Nations predicts that 2 out of every 3 people in this world will suffer from shortages of clean water. freshwater.gifAnd that estimate includes not only developing countries, but developed countries as well. By 2020, the United Nations projects that global water usage will increase by 40%. Many people, especially those who live in urban, modern cities, have no idea of the water crisis that is creeping steadily upon us. They assume that because our planet is 75% water by surface area and 97% water by inhabitable volume that the supply of fresh water is infinite. Yet many people that dwell in modern cities live in water stressed regions (meaning water consumption exceeds 10% of renewable freshwater resources). In fact those that assume that our access to fresh water is infinite are the most wasteful.

Our problem is not one of supply of fresh water, but poor management and wastefulness. The developed world’s thirst for certain food products also heavily contributes to poor water management. For example, to produce 1 kilogram of beef takes 130 times more water than it takes to produce 1 kilogram of potatoes (just 100 litres). Unfortunately, this developing water crisis is creating an opportunity for the worst aspects of capitalism. Clean fresh water is becoming commoditized and certain companies are seizing this opportunity to privatize water. If your water bill increases by 300%, it’s not like you would stop paying it. You have to pay the higher prices and higher prices will be coming your way (if they haven’t already reached you already) as the global water giants fight to privatize water in your neighborhood.

Ethically, if you have a problem investing in these companies, and I wouldn’t blame you, then there are many other ways to make money from this water crisis as well. In the U.S. and the U.K., the water pipeline infrastructure is rotting and in great disrepair. It will cost billions of dollars to replace the infrastructure and no doubt, companies that provide this infrastructure will benefit. Furthermore, certain companies are developing desalination nanotechnology to make conversion of saltwater into freshwater cheap and efficient. Obviously, those companies that succeed in doing so will also profit handsomely while providing at the same time, a nice social benefit to the poor (as long as their technology is sold at a reasonable cost to the countries that need it the most). For the next five to ten years, a good investment in water is a wise investment choice.

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