The Rude Awakening
Wall Street, New York
Thursday, July 6, 2006 ------------------------- - Start the Bentley and grab your mink-coated Missus,
were off to the Hamptons,
- Parched water basins: A big problem for some, a big
profit for others,
- Gold bounces back, all the market data, trading like
a millionaire and much more...
------------------------- Eric Fry, doing his best Gatsby impersonation, reports... Your New York editor does not know anyone named Rockefeller
or Vanderbilt. He cannot name a single private prep school
in Manhattan. He has never dated Sarah Jessica Parker. He
cannot spell Amagansett without looking it up on a
map...And he has absolutely no interest in reading
"Philistines at the Hedgerow: Passion and Property in the
Hamptons." Nevertheless, he spent the 4th of July weekend hopping from
one waterfront mansion in the Hamptons to another. The
surreal adventure began last Friday, when your editor
boarded the Montauk-bound train from New York's Penn
Station. Three hours later, he stepped into the sunlit
foyer of a beautiful East Hampton residence overlooking
Gardiner's Bay – a residence that would be his temporary
home for the next three days. "P. Diddy lives just down the street," the owner of the
home remarked. "And Donna Karen lives just beyond him."
"Have you ever seen either one of them?" your editor
inquired. "No, but we see the guy across the street a lot.
He's some sort of editor for the New York Times. And the
people down the street are just lovely," the homeowner
continued, mistaking your editor's polite silence for
interest. "HE works on Wall Street and SHE is a
cardiologist." "That's nice," your editor replied, as he groped for a
linguistic lifeline. "Wow! The view from here must be
terrific. Do you mind if I step out side and take a look?"
"No, go ahead. We've constructed a wonderful little landing
out there on the bluff overlooking the water." "Great," your editor replied, as he took leave of his
socially conscious host. The following evening, your editor found himself in the
company of a much more egalitarian host. This particular
host could have invited the hoi polloi of Wall Street to
the July 4th party at his beachfront East Hampton
mansion...and they would have eagerly attended. Instead,
the host invited his friends and colleagues, whomever they
might have been. The eclectic crowd of invitees included a few hedge fund
managers, a few artsy types, a few young families, one lone
financial journalist and a large number of single females
wearing very high pumps. (Not a single cardiologist in the
crowd). The diverse guest list produced an engaging and
delightful ambiance – "tres sympa," as the French say.
Thus, even though your editor did not really belong in East
Hampton, he seemed to belong at this particular social
gathering...as did his children, who comfortably roamed
about the place - from the deck alongside the infinity pool
to the beach to the buffet line to the raw bar to the
dessert table, and ultimately, to the top of a sand dune.
From this beachside perch, they watched the fireworks
bursting over the main beach. As the climactic flurry of fireworks ended, we strolled
back toward the house, thanked our host and stepped out the
front door into a sea of pricey automobiles. We filed past
the array of glittering Range Rovers, Mercedes and Jaguars
until arriving at a vehicle of no particular cache. We
hopped inside the car and drove home. "That was pretty amazing," Your editor's oldest son, Noah,
remarked. "The party or the house?" his father replied. "Both, really. The party was really cool...very different
than I expected. But that property was incredible. I though
it was going to be nice, but not THAT nice." ...The following night, your editor and his brood found
themselves at another beachfront mansion, this one in
Sagaponack. To protect the owner's identity, let it suffice
to report that the property was very large and the house
was very large. The owner of the estate was hosting a small
dinner party that accidentally included your editor. He and
his children made the cut, just by virtue of knowing a
friend of the host. The host seemed to enjoy the stereotypical chit-chat of the
well-to-do. Your editor overheard banter about the Wall
Street icons who owned nearby mansions, about exotic
locales to avoid visiting, about the challenges of finding
high-quality domestics etc. As the superb French domestic who prepared the evening's
meal began delivering leg of lamb to the table, the host
turned to your editor and grumbled, "So you're moving to
L.A., is that right?...I never liked the place." "No one likes the place," your editor replied. "But I love
it. Obviously, it lacks the charm of San Francisco. But
charm is for tourists. For full-time residents, L.A. offers
many appealing qualities." "I just never liked the place," the host insisted. "For two
reasons." "And they are?" "For one thing, I could never make a cent in that town,"
the host griped. "Throughout my career, I attempted many
different partnerships and business ventures in Los
Angeles. And for whatever reason, none of them ever
worked." "Okay," your editor replied, "what was the second reason?" "Isn't that reason enough?" the host laughed. "I guess it could be, but you said you had a second reason,
that's all." "Nobody owns anything," the host continued, seeming to
fabricate his second reason on the fly. "Everybody in L.A.
rents everything. They rent their houses, they rent their
cars, they rent their TVs. They don't OWN anything. It's
all about appearances. It's all shallow." "Oh c'mon! Are you serious," a guest at the other end of
the table bellowed. "I've lived in both L.A. and East
Hampton and I can assure you the East Hampton is just as
shallow as L.A., if not more so." "No, I think you're wrong," the host insisted. "Around here
you've got very substantial people...like the guys who live
nearby. And you've got a very nice quality of life here."
"Every multi-millionaire on earth has a nice quality of
life," the guest countered. "That's not the point. When was
the last time you walked along the sidewalks of East
Hampton?" "Never," the host replied. "I rest my case. It has become "Britney-Spearsville." Your editor retired from the conversation, delighted that
he lacked the life-experience to contrast the relative
lifestyle deficiencies of Los Angeles and East Hampton;
delighted that the outcome of the debate did not interest
him; delighted that the host had discovered a French
domestic capable of preparing a delicious leg of lamb...and
delighted that the privileged Hamptons lifestyle your
editor lacks is one that holds little appeal for him.
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-------------------------
Water Stocks, Part II
Edited by Eric J. Fry "Water shortage? What water shortage?" most Americans must
ask themselves, whenever they gaze at the sprinklers that
douse every blade of grass in their backyards. Most of the rest of humanity must ask themselves a very
different question: "Where the heck can we find some clean
water?" Obviously, sprinklers don't flow freely in every corner of
the world. And even if they did, they would not be flowing
with potable water. Therein lies the BIG problem...and the
big opportunity. Purifying the world's less-than-pure water
will require a never-ending, multi-trillion dollar effort.
But who will profit from this inevitability? We posed this
exact question recently to you, the readers of the Rude
Awakening. And you responded with some excellent ideas. We
published a few of your responses in yesterday's column.
Today, we present a few more... "I specialize in water chemistry and microbiology and do
considerable work for the Layne Christensen Corporation out
of KC, Mo." writes John H. Schnieders, PhD., a professional
chemist. "It has been the largest driller of potable water
wells for many years, and does millions of dollars worth of
rehabilitation throughout the States. The last couple of
years, Lane has expanded into the reverse osmosis market,
and because it controls so much of the maintenance on the
big wells, is in an excellent position to sell and service
this equipment. The other areas of Lane's business are also
growing leaps and bounds. The mining and metal exploration
business is well positioned throughout the world. Hope this
is of interest." [Editor's Note: "Layne Christensen Company provides
drilling and construction services and related products
principally in water resources, mineral exploration, and
geoconstruction markets," according to the company's Web
site. "It operates in four segments: Water Resources,
Mineral Exploration, Energy, and Geoconstruction. The Water
Resources segment offers ground water systems and potable
water treatment facilities, including test hole drilling,
well construction, well development and testing, pump
selection, equipment sales and installation, and pipeline
construction. It also provides water treatment products for
various groundwater contaminants and impurities, such as
volatile organics, nitrates, iron, manganese, arsenic,
radium, and radon; plant construction services; a range of
rehabilitation services; and environmental assessment
drilling services." The company's stock trades under the
Nasdaq symbol: LAYN. It has a market capitalization of $438
million and trades for about 20 times estimated earnings]. "Dear Aussie Joel," writes reader Jon Rice. "I have
discovered what is not a pure water play but a combination
of solar energy through roofing tiles, durable single ply
roofing membrane plus Suncones that can create unlimited
power and unlimited fresh water. "The name of the company is Open Energy Corporation and
trades over the counter under the symbol: OEGY. It is
headed by Derek May who took QualComm from a 5-person
operation to a multi-billion dollar company. OEGY is
trading as I type at $1.29.
"On 6/23/06, OEGY announced a strategic partnership with a
leading Western US roofing contractor, DRI Companies, to
distribute and install its Solar Save(tm) roofing products.
"Of all Open Energy products, I believe their Solar Cones
are the most exciting. Unlike other solar products that
convert only 7% of collected solar energy, Suncones convert
90%. In addition to generating electricity, steam from a
Suncone can pump water through a reverse-osmosis filter and
transform salt water, swamp water or even polluted water
into clean drinkable water.
"With their original design specs, these Suncones can
produce electricity at 5 cents per K and clean water for
less than $1 per 1,000 gallons.
"All factors considered, I find this an extremely exciting
company that...covers two extremely important world wide
products, energy and water." [Editor's Note: "Open Energy Corporation," the company's
Web site explains, "is a renewable energy (RE) company
focused on the development and commercialization of a
portfolio of technologies capable of delivering low-risk,
cost-competitive electricity, fresh water and related
commodities on a global basis." During the last 12 months, the company has transformed
itself from an oil-and-gas company into a "green energy
company." It divested its oil properties and acquired a
suite of products and licenses for various renewable energy
products. One such product is the Suncone™, which,
according to the company, "concentrates the sun's energy to
heat fluid and drive a turbine to produce electricity, or
to purify water. The company stock, which booked a loss of 15 cents a share
over the last 12 months, trades for about $1.18 a piece.
The market capitalization is $67 million.] Your editors here at the Rude Awakening have no idea if
Open Energy will live up to its sexy potential, nor could
we vouch for the prospects of any other water stock that
our readers have recommended. But we are intrigued by these
various ideas. We would urge all readers, therefore, to
conduct their own due diligence before investing in any of
the stocks we have presented in the last two days. A warm thanks to all the Rude readers who shared their
investment ideas with the rest of us. [Joel's Note: Special situations yield special investment
opportunities. An imminent global water crisis is certainly
a special situation, and the opportunities it presents to
invest in are great and varied. From distribution to waste
management, pumps and pipes to membrane technology, filters
and research, companies around the world are tapping into a
new wave of interest in our most precious resource. If you would like to learn more about this unique
opportunity, check out this special situations report
below: Mayer's Special Situations – Investing in Water
http://www.isecureonline.com/Reports/MSS/EMSSG712
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Incongruous market juxtaposition got you vexed? A cunning
options observation you're dying to give readership to? A
witty resource stock metaphor? Pen your insightful emails
to me at aussiejoel@the-rude-awakening.com We would love to hear from you. Cheers, jOEL ------------------------- 
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