Water investments? Michael Burry was one of the first institutional investors to bet against the US subprime mortgage market in the mid-2000s, and today he’s concentrating all of his investment efforts on one commodity: water.
Burry’s focus on water has attracted plenty of attention to the commodity in the investment community but trying to profit from water isn’t easy. In comparison to other commodities, water is highly regulated. Most water rights are owned by governments, and utility providers are strictly monitored by government agencies to prevent price gouging or aggressive business practices that other firms might be able to get away with.
- Michael Burry: Of The Big Short Fame, Hedge Fund Holdings
- A Series Of Michael Burry’s Scion Value Fund Annual Letters
- Bizarre? “Michael Burry is focusing all of his trading on one commodity: Water”
All of these regulations are designed to ensure that water remains accessible for the world’s citizens but as H20 becomes a commodity without an exchange, how do you invest in water? Do you purchase the rights? Invest in farmland with native water supply? Or is it best to invest in infrastructure, delivery and technology solutions?