Importance of Water
Extracted from ‘North Burnett News’, Central and North Burnett Times, 16 August 2018.
Has anyone ever watched the movie The Big Short? It’s about the global financial crisis which of course was triggered by the United States housing bubble. For anyone still struggling to understand the GFC ad how the world came crashing down seemingly overnight I can highly recommend it.
The movie consists of three stories, leading up to the 2007 housing market crash. One of the stories told is that of Michael Burry. Burry (a 47 year old American physician, investor, and hedge fund manager) made his investors reportedly $700 million and himself $100 million on the back of the GFC using his foresight and interpretation of data readily available. So you well may ask, why on earth am I telling you all this?
This is why…The last line of the movie, printed on a placard, is “Michael Burry is focusing all of his trading on one commodity: Water.” I found this very interesting. The man who made money at the time the rest of the world lost money because of the way he interpreted data was now investing in water. This is an extract from an interview he did for New York magazine in December 2015 (just as the movie was released).
“Fundamentally, I started looking at investments in water about 15 years ago. Fresh, clean water cannot be taken for granted. And it is not — water is political, and litigious. Transporting water is impractical for both political and physical reasons, (…) What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas. This is the method for redistributing water that is least contentious, and ultimately it can be profitable, which will ensure that this redistribution is sustainable. A bottle of wine takes over 400 bottles of water to produce — the water embedded in food is what I found interesting.”
So, my question to you is: do you find this interesting? Although investors typically think of gold, silver and even coal as precious resources before water even springs to mind (pardon the pun), the reality is, water is invaluable. Allegedly 195 conflicts since 2000 have been waged on water. Whilst nearly 70% of the world is covered by water, just 1% is accessible. By 2025 it has been suggested that 2/3rds of the world’s population will live in water-stressed regions and by 2050 food production will need to double to feed them. Michael Burry is saying water is expensive to move but food makes it viable. Given this information, imagine if we lived in a part of the world with access to clean, fresh water next to rich arable soils, on which we could grow clean and green produce. Wouldn’t we consider ourselves one of the luckiest places on earth? In the North Burnett, we don’t have to imagine. This is us. If we can sure up water security (including reliability) what a wealthy region we would have into the future.
Our job is to ensure our decision makers understand waters importance in our world’s future and that not every region/state or country has the same opportunity.