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JBL: Three for the Road

John Layfield

I have come to firmly believe a few things over the past couple of years that will dominate my investments in the next decade and probably longer.

First, water is our rarest commodity.

The aquifer in England is at one-third the normal level. The aquifer in west Texas is 400 feet below normal; in Chicago it is as much as 900 feet below normal levels. Also, water infrastructure is horribly antiquated. As much as 30% of piped water is lost due to dilapidated infrastructure.

There will have to be billions spent to repair this situation. Water, whether infrastructure or desalination for saltwater and brackish groundwater, is going to be a necessary focus of government and private institutions and an opportunity for a great investment.

Second, renewable energy is the future. Wind power has hit the inflection point at which it is cheaper than fossil fuels. Ocean power will also be a viable alternative energy source.

Solar is a long way from being economically viable, due to polysilicon shortages that will take years to work out.

Ethanol is for real. Ethanol can be produced for just over $1.10 a gallon without subsidies; that's a fact.

Congress drove up ethanol prices this year when it refused to phase out MTBE (methyl tertiary butyl ether), which ethanol replaced. That created an ethanol shortage, which drove up prices. This shortage will soon abate.

Ethanol is not the answer, but it is part of the answer.

Cellulosic ethanol will be huge.

Cellulosic plants built near landfills and commercial waste will help us get off of foreign oil, and will have the win-win of producing cheap alternative fuel and using a lot of waste that would go into landfills, which are an environmental hazard.

Most of the ethanol is produced in the Midwest; because ethanol cannot be piped, there will be a glut in the Midwest. Invest in ethanol plants on the two coasts.

While nuclear is not renewable energy, it will make a comeback. China is planning a huge nuclear boom. We will finally realize that power we can produce instead of buy from people who hate us is a good thing.

Third, content is king.

We will receive entertainment (content) on three screens: handheld, PC and television. How we receive it is up to distribution methods, which technology will dictate.

However, whether Pirates of the Caribbean is watched in theaters, downloaded or bought on DVD, content will always be king.

Good content will always make money, no matter how it is consumed.

Phone, Internet and television will become a commodity. This is great for consumers, bad for investors. It will be tough to pick winners in this sector.

I have also come to believe that you can't fight Father Time.

A broken back suffered in a match in England, compounded by a herniated and bulged disc, finally made me realize my career as a professional wrestler was over. I since migrated to the color commentary position much in the way that Jesse Ventura did before me.

I still do commentary for the WWE, but I have also taken a job on Wall Street with an investment bank. However, because of securities rules I cannot continue my column on TheStreet.com.

I want to thank TheStreet.com for allowing me to write about something I love, investment ideas.

So this is goodbye to my editors and the whole TheStreet.com crew as colleagues; we are now just friends. I also say goodbye to the readers, especially those of you kind enough to read my column. I had some fans, and I had a few that took me to task, some who were right while I was wrong. Through it all, I enjoyed every minute.

I have been impressed with how hard TheStreet.com worked for accuracy and unbiased reporting. With video, Internet and radio, it has become a full-service provider of financial news and analysis.

Thanks for taking the time for my column. If you see me on the street, please say hi. I would like to thank you in person for caring enough to read what I've written.

Remember, being poor is bad, staying that way is stupid.