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Yahoo! Finance and The Week The Trend Desk
Investing in Tomorrow's Liquid Gold
by Yahoo! Finance and The Week
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Posted on Tuesday, April 18, 2006, 3:00AM
Oil dominates the world economy. But get ready. There's a new liquid in town -- one that could prove to be an equally potent source of both geopolitical conflict and entrepreneurial activity.
By 2025, water will become the most serious resource problem in the world economy, according to the Center for Strategic and International Studies, a Washington think tank. The problems are twofold, researchers say.
First, the supply of water and the demand for it are rarely in the same place. For example, China has about 21 percent of the world's population but only 7 percent of its water.
Second, an astonishingly small amount of the world's water is actually usable. Water pollution is already the single largest cause of sickness and death worldwide. Indeed, CSIS's Global Strategy Institute says if all the water on Earth were compressed to a single gallon, only four ounces would be fresh water. Of that four ounces, only two drops would be readily accessible.
Human beings already use one of those drops. But about 92 percent of that single drop goes to agriculture and industry; just 8 percent goes to cities, towns, and municipalities. Think about that: For every gallon of water on the planet, only 8 percent of one drop is available for drinking, bathing, and other personal consumption.
As the world population rises -- particularly in China, South Asia, and parts of Africa -- the potential for calamity and conflict soars. But where danger exists, so does opportunity.
Water may be one of the richest investment opportunities of the next few decades. Any company that can improve desalinization techniques, find methods to transport water from where it's located to where it's needed, or figure out other ways to expand the useable water supply from less than a drop to, say, three or four drops might become the Shell or BP of H20.
In an excellent research report last month, UBS Investment Bank spells out the perils and promise of this emerging opportunity. The report notes the considerable uncertainty surrounding water investment but recommends four equipment and services stocks that are providing the "picks and shovels" in the pursuit of the new liquid gold. They are: Air Products and Chemicals, which does water treatment; Nitto Denko, a producer of separation membranes for refining and condensing water; Guangdong Investment Limited, a water utility; Pall Corp., which designs and manufactures filtration products.
Of course, nobody knows which specific companies will become the big kahunas of this field. But the broader strategy is obvious: To grow your portfolio over the long term, be sure to water it.
DIY Is A-OK
On the Internet, 2006 will be known as the year of user-generated content. From Flickr to MySpace to YouTube, the Web is becoming a glorious assemblage of ideas, images, and information created not by giant media companies but by you, me, Uncle Oscar, and the weird guy in the mailroom.
But lost in the hubbub is something just as cool. Just as people are putting the "we" in Web, as Newsweek recently phrased it, there's been a resurgence of interest in people who want to do the same for...stuff. The do-it-yourself trend in the offline world is also surging.
For example, there's the success of a new breed of hip DIY magazines. ReadyMade, recently nominated for a National Magazine Award, and Make, which features articles like how to turn your old VCR into a cat-feeder and how to build a backyard zip line so you can fly from tree to tree. Later this month, Make is sponsoring a Maker Faire, a Woodstock of sorts for tech DIY enthusiasts.
Then there's Instructables, an open-source style repository of instructions and documentation that aspires to be "a community for showing what you make and how others can make it."
The movement has also sprouted in Europe. Iconoculture reports on France's O'garage, which it describes as a "DIY garage for car repairs. Gearheads pay by the hour or half hour to use the facility's fully loaded space and professional grade equipment, including car lifts."
What are the investment implications? That's still coming into focus. But once again, companies that make the picks and shovels of the DIY movement will probably flourish -- as will those that push innovation to the legions of talented, intrinsically motivated customers willing to co-create the next big thing.
Ga-ga for Jajah
Earlier this month I began using a service called Jajah to make telephone calls. And from the get-go, I felt the same sort of neural twinge I experienced when I first encountered Mosaic, Napster, and TiVo: "Whoa, Nellie," I said to myself, "this is going to be big."
With Jajah, you can make calls over the Internet. No biggie that. Internet telephony has been around for awhile -- from the rudimentary calls of the late 1990s to today's spiffier offerings, such as Vonage and Skype.
But Jajah differs from these well-known services in some key respects. Unlike Skype, it doesn't require a headset. You can use your actual phone. No software to download, either. And unlike Vonage, it doesn't require a subscription. You pay only for what you use.
Jajah works as follows. Register on the site, then type in the number of your land line or mobile phone. When you want to make a call, pull up the site, and type the number you want to call. A few seconds later, your phone rings. Pick up your phone, the phone you're calling then rings -- and your call is connected. That's it. No need to strap on a Time magazine operator headset or shout into your laptop's mini-microphone.
The calls are crisp and clear. (I love Skype, but I often get an echo during the calls.) And they're cheap -- generally less than two cents a minute for anywhere in the world. For example, the total cost recently for three calls to Singapore, made from my Washington, D.C., land line and lasting 32 minutes altogether, was a whopping...56 cents (with my regular long-distance carrier, the bill would have run at least $15).
The only downside is that Jajah isn't free, while calls from one Skype user to another are. But when a service's only flaw is that its creators won't give it to you gratis, then you've got something pretty significant on your hands.
Do you Jajah? Trust me. You will.
Want to share a trend, suggest an item, or repair my car? Ping me at dantrend@danpink.com. I read every e-mail and respond to most.
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