"We are actors in a play written by others."

Mark Carney

Following up on last month’s letter

Last month’s Absolute Return Letter on freshwater scarcity caused more than a modest stir. Most months I get 10-20 emails from our readership, most of which contain questions that can be dealt with instantly, but this month was different. Everything from “what a brilliant piece” to “you are a nutcase – you don’t understand anything” popped up in my inbox, in the first few days following the publication.

Apart from the fact that I don’t entirely disagree with the latter observation, allow me to make a few comments before moving on to this month’s topic. One frequently asked question in the emails to me was “how do I invest in water?”. As many of you know (because I have said so many times before), regulations prevent me from being too concrete on those sorts of things, as it is perceived as marketing. On top of that, we are still early in our own research into water but, should you be interested, drop us a line and we will be in touch when ready.

Exhibit 1: Strategies targeted by natural resources investors in the next 12 months
‍Exhibit 1: Strategies targeted by natural resources investors in the next 12 months
Source: Preqin Natural Resources Online

In that context, take a quick look at exhibit 1. According to the findings of Preqin, water is not (yet?) on the radar screen of that many investors, which is a major plus in my book. Just saying!

10 years of despair

And now for something completely different, as they say.

What happens when you earn less (in real terms) than you did last year? You are forced to cut back on things you enjoy, and you feel that your living standards are moving in the wrong direction.

Now, add to that the unpleasant scenario of your life savings – your retirement pot – dwindling. The pressure rises. You begin to have sleepless nights, and you are prone to making irrational decisions. Quite often (but not always), you also turn more left-wing in your political convictions.