TheWaterInvestor.com was established for one purpose; to provide interested investors with a tool by which to better understand the dynamics of the water industry and to shift through all the 'noise' surrounding investment in the business. I have been engaged in the water industry for over 25 years and have seen as much evolution as most. And now, with the unprecedented interest in the water theme, I felt compelled to share what insight I have with others. (And yes, some information is 'shared' at a subscription cost.) But the shear benefit of exposing subscribers to targeted information is almost priceless in this age of information overload; why is water a good investment, which areas have the greatest potential and why, and what are the best individual opportunities among the diverse and fragmented range of water companies?

Over the years I have received hundreds of calls asking what is the best way to invest in water. As you can imagine, there is no simple answer to that question. But, aside from the fact that I do not recommend individual stocks, there are many indicators that point to companies that are likely to be successful.

Among the two investing approaches, "top down" or "bottom up", I am decididly a top down investor. It should be made clear that both of these approaches have the same goal; to screen for good individual stocks to invest in. As applied to water investing it is obvious that I have already made the decision to invest in the water sector. From that starting point I break down the "big picture" into component themes based on my knowledge of the business. This does not involve detailed company analysis. It involves looking at the particular global problems associated with water and identifying the underlying factors that determine which categories are likely to equate with investment potential.

If a viewer is interested in detailed analyst-type of discussions, save you money. I do not labor over statistical models to predict earnings estimates. It is up to the individual investor to take my analysis of the drivers in the water industry and make an individual decision as to whether a particular stock mentioned as a participant is suitable for their particular situation. That is not the 'cop-out' that it sounds like. I don't think I have ever identified an attractive theme in the water industry and then made an investment decision based solely on earnings estimates. If the theme is good, the financial performance is likely to follow. When beneficial, I will direct viewers to analyst coverage or post an article in the News page.

How To Use TheWaterInvestor.com

It is important to understand how I intend for viewers to use this site.

The Home page has three key components. The first section is labeled 'Featured Articles'. This section is not intended to be any where near an all-inclusive survey of articles based on a simple Google search of the word 'water'. Anyone can do that. The Featured Articles are updated weekly and designed to draw viewer attention to information that I believe is significant. In other words, I use my knowledge of the business to screen through mountains of material in search of relevance. Is the outcome biased? Of course it is. It is one more way for me to support what I believe. These items may reinforce an idea, direct investors to certain trends or highlight activities of companies of interest. In this way, TheWaterInvestor.com is not intended to be a repository of all news related to water. There are many industry and trade sites that are established for this purpose. And many of these sources are selected as advertisers to expose investors to other, more generalized, information. Most have their own agenda or a target audience. TheWaterInvestor.com has no industry agenda other than understanding it better.

The second component is the graphical presentation of the Palisades Water Index??. This is an index that I co-developed to serve as a benchmark indicator of the water industry. It is calculated and published by the American Stock Exchange. The Palisades Water Index?? is a market basket of stocks that meet very specific inclusion requirements and is designed to be a proxy for industry performance not an indicator of individual stock performance. It is an Index, much like the S&P 500 and, while necessarily more subjective that such a definitional list of stocks, it is non-discriminatory in that if there are six water utilities that meet the market capitalization and liquidity requirements, then they are all included in the Index. I do not make a judgment as to which water utilities are the best investments. This is an individual decision that can be made based on the information derived from TheWaterInvestor.com

The third component is subscription-based. I write the "Featured Commentary" section to make sense of the many facets of the water business. On occasion, I will strike an agreement with other industry pundits to present their position. But by and large, this is my commentary on the water industry and cuts to the chase relative to investing in water. Again, I do not ever provide a recommendation to buy or sell a stock. I provide intelligence on why or why not a particular investment theme makes sense, and this often speaks to the positioning of a particular company.

The News page is basically a supplement to the 'Featured Articles' but expands the reach to the next tier of water industry information. It is designed to accomplish the same objective of the "Featured Articles" section but with a broader net. As such, the News page will contain more industry-oriented items. The Stocks page presents one of the most comprehensive lists of the global universe of water companies available. It is designed for informational purposes only and is accompanied by a stock quote capability. The stock list can be sorted by region or by category to be used as a research tool. Stock symbols are provided along with a company website where available.

The Private Equity page is presented to provide investors with insight relative to activity within the private equity business. Viewers can draw on this information to identify the areas of interest to financial and strategic buyers. Links to company sites will provide more detailed information on the business of these particular companies.

I hope you enjoy TheWaterInvestor.com and find the information a useful tool in better understanding the activities within the water industry and in making informed individual investment decisions. As our objective is to meet the needs of water investors we welcome your feedback and comments on how to best serve your needs. Please send to: info@thewaterinvestor.com.

Steve Hoffmann