Water Index

A link on the Yahoo Finance site described the creation of a water index by IBM and Waterfund, LLC.  The index intends to be for water what  the Case-Schiller Index is for housing.

IBM needs no explanation.  Waterfund on the other hand "is developing Software-as-a-Service solutions to measure the financial risk of supplying freshwater. Waterfund is also pioneering the first financial risk management products catered to the needs of the water industry."  Make of that what you will.

The story reminded me that someone I knew had put a great deal of money into a company named Pure Safe Water Systems (PSWS).  He'd had business dealings with the company, was favorably impressed, and expected his investment to provide a comfortable retirement.

From time to time I'd checked on the stock because I've been interested in water for a several decades since a newsletter from my local water service showed that the cost of providing potable water had increase several fold over time.  Most of the increase seemed to come from testing and purification, not from infrastructure costs.

Shortly after that I heard of a bet between two eminent economists concerning the cost of raw material/commodities over time.  The details are fuzzy now, but I think the one who said that commodities actually got cheaper with time bet that the other economist couldn't identify a  number of commodities whose cost would increase over the next several years.

When I heard that, I said I would take that bet with everything I owned and bet on the cost of water.  Potable water is getting scarcer around the world.  Just look at the rising consumption of bottled water over the last few decades.

PSWS which among other things makes portable water purification systems seemed poised to take advantage of the increased number of natural disasters.  Prognostication should be so simple.

The first time I checked the price, the stock was selling for about 25¢ and the person was expecting the price to go to $1 in a few years. 

It was not to be.  There have been some interesting money-making opportunity when the price went from 10¢ to 15¢ and again 6.5¢ to 10¢, but in general, the price has gone down.

My heart sank when I saw the closing price today: 0.0021 0.0002(8.70%).

By any measure whatever money he'd put in was now worth less than 1% of what it had been when he first told me about the company.  (For those who avoid math at all costs, it looks like this:  for every dollar he invested he now has less than a penny)