“The Easiest Investment to Make in the Oil Patch For The Next Twenty Years”

What's Keith Schaefer's "Buy and Hold for 20 Years" Stock?

By Travis Johnson, Stock Gumshoe, December 16, 2014

“Buy and Hold for 20 years” sounds like a dream come true for me — I don’t like trading in and out of stocks very often, I prefer to own good companies and watch them nicely compound for a long period of time (not that I don’t speculate on stuff from time to time for short-term gains… or losses).

So when readers started sending me this ad from Keith Schaefer for his Oil and Gas Investments Bulletin, well, my ears perked up… not just because he’s hinting about one of his two core stocks that he thinks you can buy and hold, but because, well, it’s obviously something to do with the oil business. And that means it’s almost certainly going to be a lot cheaper than it was a couple months ago.

What, then, is Schaefer pitching? Well, I should tell you up front that he’s getting a bit wilier with his copywriting and his hints. The clues are getting more general, the tease less specific, so the Thinkolator has some serious chewing to do on this one. Let’s see what we’ve got to worth with… here’s the intro:

“I’m not a long term buy and hold guy.

“I like to find the next great growth stock in the market, ride it higher and then cash out when the market catches on.

“But I’m also not a fool.

“I’m willing to make an exception for a truly unique opportunity.

“My latest subscriber stock pick isn’t just unique.

“And it is more than exceptional.

“My latest subscriber pick is a once in a generation opportunity.

“This company is one of two core stocks in my portfolio.

“And it will be for the next 20 years.

“Make no mistake.

“When you get a company with this kind of growth opportunity ahead of it–you buy the stock, and you hold it.”

I don’t know if he’ll end up being right about this secret company — but I will give him credit for not mincing his words, he’s certainly putting himself on the line with this pick.

Not that he’ll be eating out of a cat food tin if you happen to lose money on the idea, of course — but, well, he sounds awfully confident.

More from Keith:

“This company is really in the sweet spot.

“It is small enough that it can grow at high rates for years.

“Yet large enough to be a major player in its industry.

“This stock is so good I’m throwing out my normal playbook….

“For once I’m becoming a buy and hold investor.

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“This is a buy it and leave it alone story.

“And this is a story that is all about water….”

You can review the full ad presentation here if you like, but I’ll give you the shorthand version:

This company does water handling — including both supplying water for frackers, and handling and recycling the water used by and procuced by wells. Schaefer says that they are on an inevitable growth path, not only because there is going to continue to be a lot of drilling but because drilling is becoming more water intensive… and the oils drilled over the past couple years of serious boom time production growth are maturing, which will amplify water handling needs even more because maturing wells produce more water… and many of them will also be water-flooded as the years go by, to enhance production from aging wells.

That’s the basic spiel — it’s a substantial player, it’s small enough to grow, it handles all aspects of water for oil and gas companies, and I interpret the pitch to mean that they have a substantial exposure to Canada, particularly Canadian gas production that’s expected to grow to generate natural gas for the LNG Export terminals planned in British Columbia.

There are a handful of decent-sized companies in oil services who are substantial players in water and drilling fluids and might be considered “pure play” ideas on water handling — particularly if you include environmental work, water disposal, etc., which Schaefer seems to. If you narrow it down to Canada that shrinks the number of substantial companies a little bit, but there are still several.

Any other clues for us in this long but not terribly specific spiel?

Well, we do get one:

“There Is More, This Company Has A Second World Class Growth Market

“One man’s misery is another man’s fortune.

“For my #1 water stock the environmental issues