“China’s Screwed” … how to profit from the “tiny company [that] solves the #1 threat to China’s economy.”

Sleuthing out a teaser pick from Jeff Opdyke's Emerging Market Strategist

By Travis Johnson, Stock Gumshoe, April 16, 2012

For as long as there’s been a Stock Gumshoe (that’s since 2007, in case anyone’s askin’), there’s been an easy pitch to be made that goes like this:

  1. China is polluting it’s water like crazy.
  2. China has a godawful number of people.
  3. China needs to spend a helluva lot of money on cleaning up their water.
  4. This water stock (enter name here) will make you rich as a result.

And there’s a reason why the pitch is easy to make — it’s because it’s true (well, 1 through 3 are true … 4 is “to be determined”). China is indeed a disaster many years in the making when it comes to water, whether it be water for agriculture, industry, or human consumption … as befits a newly industrialized nation, the environmental standards have been horrid over the years, or overridden by corrupt local governments. Nothing unique there — but as with everything else, when China does it they do it bigger than anyone else.

Of course, a lot of the investments that have been teased as China plays have not worked out for a variety of reasons — whether because the company wasn’t enough of a direct “China water” play, or it got snagged in the accounting shenanigans of so many US-listed small China stocks, or whatever else. That doesn’t stop the urge to find them, water is an easy to understand basic commodity and China is the source of most of the world’s marginal commodity demand and long-term strategic investment in commodities … so really, companies that can capitalize on connections or assets or technologies to sell water-related services or build water and wastewater projects in China should be in a profitable niche, and the search for the best ones continues.

Which leads us to today’s tease from Jeff Opdyke, a former Wall Street Journal reporter who turned into a newsletter guy when he joined up with the Sovereign Society a couple years ago. He’s pitched a few interesting ideas in his ads over the years, largely for smallish, often hard to trade foreign securities that are “under the radar” for mainstream US investors. And I’ll admit to having a soft spot for those kinds of investments myself, so I thought I’d try to sniff this one out for you.

Here’s the intro from his latest ad to get us revved up:

“China’s screwed!

“If its government doesn’t act fast, 30 years of massive economic growth could crumble in an instant…

“Hurling China back to the days of bicycles and pushcarts.

“London’s Guardian newspaper reports that, ‘China is resorting to desperate and expensive measures to head off this crisis.’

“So what exactly could throw China into a depression… and how could this create an opportunity that could double your money by July 2012?

“The crisis at hand is China’s water su