Estate Living Magazine Investment - Issue 34 October 2018 | Page 34

unless we find policy certainty that attracts both technology and
capital back into the water sector, we are doomed to succumb
to the slow onset disaster of revolution driven by growing
unemployment and fuelled by the anger of the dispossessed.
So, how do we actually ‘invest’ in water?
On the practical side, it’s a good time to consider harvesting
rainwater or putting in a borehole or wellpoint. But there's a lot
more to drilling for water than you may think. Charl Marais, CEO
of Countrywide Drilling, explains: 'As well as the physical
factors, like where to drill and how to pump,
store and deliver the water, there are a lot
of legislative and planning issues that
require careful negotiation.' So –
just like you want a good financial
advisor before you dive into
the stock market – you should
consult a knowledgeable
professional who can guide
you through every aspect
of acquiring water security.
But that's not investment,
that's just common sense.
So, before we discuss the
actual mechanics of investing
in water, let’s look at The Big
Short quote more carefully:
‘Michael Burry is focusing all of his
trading on one commodity: Water.’ There’s
the rub. Water is not a commodity.
Michael Burry is not investing in water, as such. He is, he explained
in an interview with financial media house, Bloomberg, investing in
farmland with good water supply. And that’s wise, because water is
not a commodity. It is, according to Turton, a flux. And, while it
can – technically – be stored, it can’t be created or destroyed,
only circulated. ‘Water’, he says, ‘moves in time and space. Good
stewardship is recognising water is not a stock to be consumed
once and discarded. If we respect water and treat it as a flux it
comes back to us in time and space.’ Good stewardship is not
about hoarding; it’s about equitable distribution. So, the best
way to invest in water is perhaps to invest in companies involved
in water infrastructure – particularly the more sustainable side of
infrastructure.
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Turton suggests two areas or strategies. The first is the provision of
basic water infrastructure where none exists – and this is, anyhow,
a basic human right (with profitability just an added bonus).
And the second is in the development and implementation of
water recovery and storage. This, he says, ‘is likely to become
the cutting edge of smart investment.’ But it requires that we
embrace a paradigm of abundance based
on the known chemistry and physics of water, constantly flowing
around the planetary atmosphere and through the biosphere
driven by the hydrological cycle. The water we drink today went
through a dinosaur kidney 65 million years ago, and a human
kidney about a week ago. Water is therefore a flux, moving in
time and space, but we manage it as a stock – as something
of finite volume in a linear economy. If we change our thinking
we now embrace the circular economy, and unlock the known
chemistry and physics of water as an infinitely renewable
resource.
Strangely, while the above is actually common knowledge – we
all learned about the hydrological cycle at school – it’s taken an
awful lot of lobbying by environmental and human rights activists
for us to start thinking about ways to practically implement
this inherent quality of water in order to rationalise our use,
distribution and recovery of one of our most strategic resources.
And – hey – here’s the good news: it can be profitable.
It is in this circular economic model, Turton explains, ‘where
investment happens. Because – unlike in the linear economy
where cost is to be avoided – in the circular economy investment
yields returns.’ Water is the ultimate economic enabler, he
continues, ‘so there are also multiple transactions that drive this
yield. So investment into the technology that recovers water
from waste, removes salt from the sea and mine water, and
recycles water is very smart indeed.’
And all this could be summarised as good stewardship, which
makes sense. There’s no point in investing in water if we don’t
stop treating it like garbage – that’s about as sensible as burning
down all the trees to prop up the leaf exchange rate.
Jennifer Stern