Investing in Water IV


Investing in water offers extra benefits (finally) now.

Seche-plant

Turn waste into electricity.   See below how Seche Environnement does.

I am finally bullish on equity markets and have been waiting for  this moment for over a dozen years.  Hallelujah!

Here is why and how 44 years of experience pays off.

I first began offering investment ideas in the mid 1960s.  Had an investor started following the market in 1960, by 1966 he… or she, might have thought that it would climb forever.  This chart of the Dow Jones Industrial Average from 1960 to 1980 from stockchart.com shows why one might have been enthused.

I was.

stockcharts.com dow

(click on charts to enlarge)

In 1966 equity markets revealed their cyclic nature to beginners like me and nearly wiped me out.  Thank God the emerging markets emerged because for the next 15 years the Dow actually dropped.

Investors younger than I were probably fooled again if they began investing in the 1980s.

tockcharts.com dow

The Dow just rose… and rose and rose until investors learned the second word in equity markets behind “boom” which is “bust”.   This stockchart.com chart above of the Dow from 1980 to 2000 shows how badly the DJI performed .

The crash of 1999 has been followed by 13 years of terrible ups and downs in the Dow and other equity markets as well.

tockcharts.com dow

From stockchart.com the Dow from the year 2000 to now.

By 1990, I had learned a lot. Equity markets move up in down in cycles of approximately 15 to 20 years.  We can see this trend since the 1900s in this chart.

Dow Charts

This history suggests that equity markets have been in the bear cycle for almost 14 years and are now approaching their darkest hour.

But even in the bear… opportunity exists.

For example, in 2006, working with Jyske Bank in Copenhagen we created five portfolios for educational purposes.  One of the five multi currency portfolios was the Asian Emerging Multi Currency Portfolio. The portfolio started with a $100,000 investment and a $200,000 loan in Japanese yen (more on the loans in a moment).

In the first year (2006) this portfolio rose 114.16%. Then we made the five changes mentioned (two funds dropped and three added). In 2007 this portfolio rose 122.62%.

Then we did even better!  In 2007 we created (with Jyske) a Green Portfolio consisted of six shares.

This Green Portfolio rose 266.30% in one year!

Yet due to the many years of experience I knew this was a short term bull phase of a bear market so in late 2007 we began to unload.

In early August 2007…well before the 2008 market crash… our study of the market began to show increased risk.   We sent a first warning that said:  “We have enjoyed two years of enormous growth.  Periods of high growth are normally followed by periods of low growth.”

August 17, 2007 another message sent to our readers said: “The numbers are close enough that we could be entering the fourth sub cycle down (similar to 1976 to 1978).  If so expect a sustained drop in markets for two to three years.”

On September 21, 2007, another message read: “Equity markets dropped again violently last month. Now these markets have recovered again. Yet this may be a last gasp party.”

A October 15, 2007 message reviewed how leveraged investments rise and fell faster than investments without leverage.

The message on Oct 26, 2007 was it was entitled “Leveraged Investments Gone”. Just before markets started to head south this lesson warned: “I have had only about 10% of my portfolio leveraged. Compare this to 200% for the Green Portfolio (which is up 265% this year). Now I have none.
So a lot of my portfolio investments are basically in a multi currency portfolio of bonds…mostly in pounds, Swedish and Danish kroner. The equities I hold are mainly in Europe and I do not leverage equities…especially after markets have risen so much. Periods of high returns are normally followed by periods of low returns. These facts, plus my belief that numerous economic woes are rising and my recollection of Oct 1987 leave me wanting to reduce risk in my equity portfolio. So now I have eliminated all my leverage.”

The next message warned again: “Okay it’s time to turn the burner down.”

A November 8, 2007 Black Friday message was our seventh warning and saved many investors because it reviewed  all the warnings above again and more.

We try to always stay ahead of the curve so now I am announcing the next global bull equity market.  I have been waiting and watching and I am bullish on markets again. Hallaluyah!

There are several reasons why I am increasing our equity position now.  This could be a time of extreme riches… especially for those who enter ahead of the rush and let me be clear… there is plenty of time. In fact another bear trap is likely because we may only be near the darkest hour.

If so we would rather be early than sorry.  This is the time when smart investors are buying for the long hold.  They and I (and perhaps you) will be selling for huge profits when the thundering herd catches on.

There are numerous other reasons why I am bullish now.  We’ll see them in future messages. For now we are looking at a series of  equities that are involed in water purification and were in the Green Portfolio that did so well.

This message views the French company Séché Environnement SA.

water share chart

Finance.yahoo.com describes the company in a profile that says:

Séché Environnement SA provides waste treatment services for hazardous and non-hazardous wastes primarily in France. It operates waste treatment and recovery facilities, as well as develops tools to produce energy from waste. The company also collects and sorts various types of waste, including household and industrial hazardous and non-hazardous. In addition, it provides tailored services comprising eco-logistic, sorting/grouping, comprehensive industrial waste management, industrial effluents management, household waste management, and site decontamination/rehabilitation services.  The company primarily serves industrial clients and local authorities. Séché Environnement SA was founded in 1985 and is based in Change, France.

I’ll be watching Seche closely because this share has not recovered from the 2008 debacle as so many equities did.  My focus will look for value. Is something wrong with Seche or is the sector just discouraged about France… about environmental problems and about the euro?   If the problem is the latter… then Seche shares would have five fundmentals that can cause these shares to recover.

Fundamental #1:  Pessimistic mood about France and the EU.

Fundamental #2:  Increased demand for clean water.

Fundamental #3:  An oversold Euro.

Fundamental #4:  An undervalued environmental sector.

Fundamental #5::  An overall recovery of equity markets we have reviewed in this message.

This message is not a suggestion to rush into Seche Environnement.  One of the golden rules of investing is to invest in good value shares with rising prices… rising earnings and growing market attention.  Seche does not appear to fit that description now.

However the five fundamentals above suggest that Seche could see an explosive recovery which would be nice to enjoy as an investor… gaining profits in a company that is helping the environment.

Seche Environnement is traded OTC in the USA as symbol SECVY.

Shares are traded on the Turquoise Exchange as Seche Environnement SA symbol SCHP:TQ

TQ is the symbol for the Turquoise Exchange that is now majority owned by the London Stock Exchange and twelve leading investment banks.

The shares trade on the French Securities Market (code FP) as symbol SCHP.

This exchange was established to engender greater competition in the secondary trading of European equities,

Water has a demand we know will grow.  Equity markets will have a next up curve is a given also.  Adding these two deeply natural and fundamental forces to the good value created by the darkest hour can create truly extraordinary profits.

Gary

Go to Part Five of the “Investing in Water” Report – Click here

Go to Part Five of the “Investing in Water” Report – Click here

Read Seche’s Finance.yahoo’s profile

See Seche’s recovery solutions

See Seche’s eco-logistics

See more on Seche’s services

See Seche’s specific knowhow


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