If you’re looking for a commodity trade David Henderson of XPV Capital Corporation suggests something extremely precious.
Water also known as blue gold.
Although you might find water as a commodity trade hard to swallow, Henderson says there are 5 mega-trends in place that should drive demand through the roof. They are industrialization, urbanization, climate change, infrastructure failure, and population growth.
And if that list makes you think of water as an emerging markets trade, Henderson says think again. “All of those mega-trends impact the developed markets, too” he says. “Take infrastructure failure as an example. In the developed world we have infrastructure that was put in the ground right after WWII that had a 50-70 year life span. We’re seeing it fail every day.”
If you’re looking to trade the trend Henderson suggests looking at companies that supply the needed infrastructure buildout and repair. They are GE and Xylem as well as Pentair .
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