A film nominated to win the Oscar for Best Picture in 2016 was The Big Short. The movie, based on Michael Lewis’s book, The Big Short: Inside the Doomsday Machine, tells the story of four investors who predicted the credit and housing bubble collapse in 2008 and decided to bet against Wall Street, earning billions of dollars in the process. The first of these investors that predicted the housing bubble was Dr. Michael Burry. While the movie does a great job explaining how Burry was able to make nearly $1 billion betting against the housing market, it left many viewers very puzzled about a completely different issue: the last line of the movie, printed on a placard, is:
“Michael Burry is focusing all of his trading on one commodity: Water.”
This is a perplexing statement, because unlike other commodities such as oil, cotton, or silver, there is no market to trade water! So how can someone invest in water? Should you just buy a rain bucket?! Well, you have 3 different options if you want to invest in water:
- Purchase water rights
- Invest in water-rich farmland
- Invest in water utilities, infrastructure & equipment.
Let’s explore why you might want to invest in water in the first place. For the answer you may read this article: http://vintagevalueinvesting.com/how-to-invest-in-water-like-michael-burry-from-the-big-short/ (Caveat, a commercial site with ads and annoying pop-ups)