It is time, once again, to talk about water.
More specifically, it’s time to talk about a monster that lives deep down in the depths—a monster that is often talked about, but rarely, if ever, seen.
This monster has been lurking for over one hundred years, waiting to rear its ugly head. And now the time has come for this beast to unleash fury the likes of which the market has never seen.
Industry insiders have named this creature after the Loch Ness Monster—take just one look and you’ll know why.
You’ve just met Nessie, the industry-accepted prediction of expenditures for water pipe replacement over the next 50 years.
It stems from an American Water Works Association (AWWA) report from 2001, although its implications are only now starting be felt. (It is important to note that this chart is only for the twenty utilities in the study. The chart for the entire country would look similar, but with much higher numbers.)
That same report said that for utilities "the water supply business will never be the same."
All the Hype About Aging Pipes
The oldest pipes in our nation’s infrastructure date all the way back to the late 1800s, are made of cast iron, and typically last about 120 years.
During the roaring ’20s more pipes were laid to accommodate our expanding population. But these pipes are forecasted to last only 100 years because materials and manufacturing techniques changed.
The last major installation of pipes came during the boom after World War II. These pipes are scheduled to last 75 years.
A quick look at the following table will tell you just how real this scenario is:
| Installed | Durability | Replacement |
| 1890s | 120 years | 2010-2020 |
| 1920s | 100 years | 2020-2030 |
| 1940s | 75 years | 2015-2025 |
It’s like the current dilemma facing Social Security. According to the AWWA report, "pipes laid down as long as a century ago [have] created a financial obligation that is now coming due."
By 2010, the 20 utilities in the study will be spending over $100 million annually on pipe replacement. That number will increase every year until it hits about $240 million by mid-century.
When the dust settles, they’ll have spent upwards of $10 billion. The nation’s other 220 or so water utilities will spend in the $110 billion range.
Just imagine the investment opportunities that will be associated with that kind of capital outlay.
And that’s just on pipe replacement.
Perks of the Water Works
If the chance for profit in the pipes sector is big, the chance for profit in the rest of the water industry is ginormous.
I’ve written a lot lately about the various ways to get big returns from water.
Let’s take a moment to highlight a few of those plays.
Water Rights
That’s over 257% in five years!
Groundwater Treatment
Over 55% in the past three months!
Desalination
Over 41% in three months!
Introducing the Green Chip Water Index
It’s because of gains like these and the coming investment in water infrastructure that I’ve decided to unveil the Green Chip Water Index.
This list of 20 water-related companies—including the three just mentioned—will be exclusively available to Green Chip Stocks members starting today.
Already this year, my index has outperformed the Dow nearly three times over.
One stock in the index is up over 119%—in eight months.
To get a piece of the water action, and everything else that Green Chip has to offer, click here to sign up at our discounted rate today.
You won’t want to miss this.
Until next time,
Nick
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