Rally On, Traders!

Water stocks are racing to records for a very good reason: in a world of 7.7 billion people, clean water is an increasingly scarce and precious commodity. Is it any wonder that LifeQuest World Corp. (OTC: LQWC) has jumped from $0.26 to $0.49 in just the last MONTH when the giants are moving like this?



Yeah, that's the water ETF. It's given forward-looking investors a double-the-money ride in only four years, beating the S&P 500 by a healthy 5-7% a year. Good times for the index fund types. But if you're chasing something even stronger, it's clear that LQWC is moving at a truly EXPONENTIAL speed. 

Take that four-year return on the ETF and compress it into the last MONTH. Practically the same action in 1/48 (2%) of the time. And go back to the long chart . . . there's still VAST room for further upside without even straining the historical record one cent.

The logic is simple. Water is hot stuff on Wall Street right now. The big boys know it's going to cost $1 TRILLION a year in new investment to satisfy global thirst. That's four Amazons or four Apples worth of cash flow . . . every 12 months. And LQWC is in one of the sweetest spots in that flow, making lots of news as its business ramps up.

Of course here around $0.50 we're a long way from the trillion-dollar Apple zone. Plenty of room for traders who missed the last four years of water boom to catch the wave, catch up and get happy. 

After all, a lot of money is chasing water because it's a critical need. Even here in North America where the rivers run free and public water is a fact of life, infrastructure funds are the FASTEST growing asset class, basically doubling every year lately. Huge. 

But water is still only a tiny slice of that landscape of roads and pipelines. And all of them together are still only $490 billion, which is barely enough to cover six months of the known need for water spending. These are staggeringly large numbers but it gives you a sense of the amount of investor money chasing these companies . . . and why there's still effectively INFINITE room for new kids with disruptive solutions to capture just a little of that sizzle.

New kids like LQWC. You probably haven't heard of them. Super early stages, not even a $0.50 stock yet. They only started booking revenue a few months ago and it's still more of a trickle of cash coming in than a real gusher. That's okay. Baby steps for baby stocks. This one is early in its preliminary sales cycle, collecting contacts around the world and scoring a few initial sales orders in the process. 

Nice news flow. It only took the company a handful of months between entering a market and making a big enough "splash" that it found an engineering partner to cover the whole country. But those early orders are a "proof of concept" showing that customers recognize the value of the water systems LQWC has to provide. It's actually pretty simple so it's no wonder the conversations are already paying off. 

The water cycle is all about bringing fresh fluid in and then taking it away to get treated to the point where you can use it again. LQWC has a special pipe that essentially does the treatment on its own. There's no need for a separate septic tank or purification plant.

Whatever leaves the building is clean enough to go back into the toilets or even sprinkle on your garden . . . no chemicals, minimal power drain, no smell, no goo. If anything, it's chemically ENHANCED so the crops love it, like getting an extra fertilizer boost.

In theory, this is a life saver for billions of people. And it's a critical piece of that $1 TRILLION global transformation the world needs, house by house, town by town, country by country.

Obviously little LQWC doesn't need to replace all the pipes at once and grab that $1 trillion immediately. Disruption is an ongoing process. You start small with a great idea and reach the early adapters. They talk. Pretty soon, you start getting critical mass. Then one day you look around and you've changed the world.

That's the game plan here. The important thing for investors is to recognize that the numbers have started moving the right direction and have almost endless room to expand. Even if LQWC only captures one MILLIONTH of $1 trillion, that's an exponential growth curve from today's base. And should this currently tiny company achieve REAL global market share . . . heads will spin.

But leaping from "proof of concept" to a fair slice of that trillion-dollar market takes time and planning. You can do it dumb or you can do it smart. Before LQWC management opened the sales flood gates, they took a step back and looked at the world we live in. Where are the water problems the worst? Where will governments and non-profit groups pour the money to make the biggest difference?

They started around INDIA. Massive population, nightmarish water system. Those rivers are not exactly clean by the time they reach the ocean. They never had anything like the Tennessee Valley Authority to trap the monsoon and ensure year-round running water. 

At least $3 billion a year needs to get spent over there just for maintenance. Building something like the TVA would cost at least $20 billion in today's money. You can almost see those millionths of global water investment multiply before your eyes here, can't you?

So LQWC set up a joint venture in India and three months later, the deals started coming in from hotel managers with one eye on environmentally demanding Western tourists and the other on regulations. Starting on January 1, every hotel needs to take responsibility for its own sewage. 

One Western tourist can easily pollute 1000 liter-sized bottles of fresh water a DAY. LQWC's partners estimate that all of India's hotels put together create 1/10 of the sprawling country's dirty runoff . . . that's 6 BILLION of those liter-sized bottles, every day, day in and day out. The country only has the capacity to process a fraction of that waste water. The rest just rolls out to sea. 

I think you see the scale of that initial opportunity now. The biggest of the initial systems LQWC sold can handle 100 tourists.or 0.0001% of the country's current flow, if my math is correct. They're practically toys, showpieces for the technology. The real money comes as the other 99.9999% of India's pipes gradually replaced with these smarter systems. Maybe it takes years, even decades. Either way, we're in the earliest stages and LQWC will capture as much as it can.

And hey, India is "only" 1/6 of the global population! LQWC has also found a partner in Bangladesh, where ground water is closer to the surface and purification is even more critical. There's a lot of cloth mills there. Every ton of fabric they process produces 8,000 gallons of waste water. But by the time anything comes out of LQWC pipes, it's clean enough for the European Union's finicky standards. Over a hundred million people are going to cheer and an environmentally focused government is going to make sure they have a reason.

South Africa. Yikes. Better water systems are critically required. And LQWC is there now. The demand is clear. Simply processing currently untreated raw sewage there will clean up 50,000 liters of water per SECOND . . . that's a lot of demand just waiting for a reasonable solution.

Now I could drone on about how the systems work, but when was the last time you really paid attention to septic tank science? Just watch the VIDEO. 

We're investors, not septic scientists. Forget the health impacts, the gloomy forecasts for social upheaval if people run out of something to drink and a way to get clean. Governments and private industry will throw whatever they need at the challenge. All we need to appreciate is that there's a serious global problem that people will pay a little money to fix.

It's no wonder pure plays on pure water are so precious to those high-rolling institutional investors. They have a stake in the long haul as well as next year's performance statement. (Performance has been pretty good for most pure plays. There's a reason these stocks are making friends on Wall Street.)

LQWC has issued a lot of stock over the past year to acquire its technology and build out its sales network, so it missed that boom. There's a lot of catching up to do here now. Are you ready?


 

Happy, Happy, Happy Trading!