Water is being described as the blue gold in an era of investment
opportunity, and in certain circles it is now suggested that
within 20 years, the emerging water cartel will rival the
current Opec countries for trade and economic dominance.
For this reason, equity in large water producing companies
may be an excellent stock to buy, on the world market. Remember
New Orleans, although the levees had burst their banks, one
of the major demands that could not be met was the need for
drinking water and water to wash!
The world supply of fresh water is not increasing, and less
than two per cent of available supply is not described as
fresh water! This opens the market for water purification
technologies and plants. The outcome may suggest that here
lies an emerging opportunity for big dividends on the stock
The gilt edge in reaping huge stock market investment returns
resides in an ability to predict whats likely to happen
in consumer demand, years before it happens. They call it
foresight, and its the cloth from which visionaries
are cut. Fresh water is just an example.
Blue chip stocks aside, the opportunity to win big-time on
the stock market from a portfolio of tired old stocks, is
uninviting to say the least!
And to get in on the blue chip, you have to start with a lot
of money. For example, using recent quotes, you will need
about $17,000 to own a mere 200 shares in a top bank trading
on the exchange.
To own an ordinary share in average companies that trade on
the exchange, will require about $10- $14 to purchase a solitary
To select, you have to look at what is called EPS- earnings
per share. This is an indicator of a companys profitability
and is an important indicator. You will need to see the profits
in at least two periods: one annual and another say, quarterly.
You will also need to know how much equity shares are available.
Essentially you divide the profits by the number of shares
to determine the per share earning for the company. Do it
for the last quarter and for the last 12 months, and determine
the average. Then if you can, look at an historical period.
If theres a fluctuating between negative and positive
EPS values, with no well graded growth trend, it is probably
NOT a good share to buy; unless you can envision an industry
You will also need to compare/contrast EPS for other companies,
and develop an appreciation for the range from aggressive
growth picks to the low and stable prospects.
Of course split share offers, new issues and mergers and acquisitions
colour the equation. The exercise will definitely give you
a fair gauge about whats going down.
Now if you have to invest $80 per share to earn $3 per share,
perhaps you can find an alternative where you can invest $20
and earn the same $3.
Investing in the stock market is really for those with time
to play with figures and seek out projections. But it is really
simple ratios and calculations, that with practice, become
off the bat and easy to do!
Enough people knew the levees would break in New Orleans,
we see the after effect of civil war, tsunamis, and political
greed, so how will the market turn?
The best stock tip is the one that figures the demand- supply
equation before other people notice. Youve heard the
rhyme of the ancient mariner: water, water everywhere, not
a drop to drink!