After The Market Fell 3.5% Last Week, Here’s Who I Turned To

Let’s be realistic. You’re NOT going to get rich in a hurry by investing in mainstream blue-chip stocks. The S&P 500 is a handy benchmark and a good proxy for the U.S. economy, but it’s not going to make anyone rich unless you have decades to invest.

If you want to truly soar above the market, you have to dedicate at least part of your portfolio to serious big-game hunting.

With that in mind, my team and I just released a report on my boldest predictions for 2014. (On Wednesday, I told you about one prediction.) These are ideas that you won’t hear about in the mainstream financial press until it’s too late.

In the past, my previous predictions have returned thousands of dollars to subscribers of my newsletter Game-Changing Stocks. Here’s a brief look at a few of the triple-digit winners…

 
But my ideas for 2014 are some of the most exciting to date. In fact, I had such a hard time limiting myself to just 11 “game-changing” ideas that I had to leave some off the list.
 
I want to share one of these ideas with you today. Just because it didn’t make the cut this year doesn’t mean there isn’t serious investment potential here.
 
In fact, I think patient investors could easily make a killing in the market with this idea.
 
But first, let me give you a little background so you fully understand the potential.
 
The world has a serious water shortage problem. The sad story is that at least a billion people lack adequate access to even minimal quantities of drinkable water, according to the United Nations.
 
And this is not the melodramatic carping of environmentalists. It’s much more than that.#-ad_banner-#
 
Some 2.8 billion people — 44% of humanity — live in areas of high water stress as defined by the Organisation for Economic Co-operation and Development.
 
Things aren’t forecast to get any better. In fact, the future looks downright bleak. The World Bank says 3 billion people will live in areas with severe water shortages in the next 25 years, many of them in Africa, the Middle East and South Asia.
 
This water shortage has sent companies scrambling to come up with solutions to at least help get through this problem. For example, Monsanto (NYSE: MON), the world leader in agricultural products, is developing an entire line of seeds that produces plants that can thrive in low-water conditions.
 
No one knows the state of the world’s water resources better than Monsanto, whose seeds are planted in every nation where man cultivates crops. And if Monsanto is betting its future revenues on low-water crops, then even the most skeptical observer ought to concede that water must be a pressing issue.
 
All this is a bit strange given that there is literally water everywhere. We’re not running out of the stuff — we have the exact amount of water we’ve always had. But as water usage has changed, the clean drinking water that communities survive on is becoming increasingly scarce.
 
Though most of the world is covered with water, only 1% of it is suitable for consumption.
 
Still, seawater is the inevitable solution to the world’s shortages. Though potentially lethal if gulped down, seawater is perfectly potable when the compounds known collectively as “salts” are removed.
 
The fact is, we’ve got the water. The only question is whether we’re willing to spend the money. Any water shortage can be solved tomorrow with a process known as reverse osmosis desalination, which basically means shooting water at extremely high pressure through a series of filters to remove the salt.
 
The only problem is that it’s pricey. And unless the plant is built with an ingenious little piece of equipment, the clean water it produces is probably going to be too expensive.
 
Here’s the kicker: This piece of equipment — called a pressure exchanger — is basically controlled by one company: Energy Recovery (Nasdaq: ERII).
 
Energy Recovery manufactures a device that captures the energy from a high-pressure stream of water and recycles it so as to decrease the pump workload — think of it as the second peddler on a tandem bicycle who makes the uphill climbs half as steep.
 
By capturing that energy, a plant’s overall energy bill can be reduced by up to 60%, according to Energy Recovery’s regulatory filings.
 
Build a desalination plant without Energy Recovery’s patented equipment, and your power bill might be $10 million a year. Install the devices, and the electricity costs could drop to $4 million. For cost-conscious operators like regional water utilities, the decision is a no-brainer.
 
As I say in my recently released report, I wouldn’t invest more than 10% of your portfolio in these game-changing ideas. But, sometimes, that’s all you need to move the needle on your returns.
 
Energy Recovery definitely has the potential to do major things in the future. And should be on anyone’s radar who is looking for a ‘game-changer’ for their portfolio.

But, like I said, my other predictions for 2014 may be some of my best ideas yet. They all have the potential to lead you to a triple-digit winner. To find out what my 11 predictions for 2014 are, click here.