JBL: Three for the Road

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.