It's been a few years since The Big Short was released and I'm sure most of you watched it. Some interested articles have come out as of late evincing the potential for a serious shortage of water (link to one such article)
What's your take? Is he right?
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His statement regarding this (and the statement at the end of the movie) were heavily taken out of context. Take a look at his firm's most recent 13-F filing and you'll see none of his investments involve this type of play. People saw that statement at the end of the movie and just ran with it without digging deeper.
13F does not reveal positions for any such securities that are NOT 13F securities. Int'l equities, credit, certain derivatives outside of typical put/calls, highly structured investments (read: water rights) would not require disclosure.
That's a good point. He has publicly mentioned his investment in water was taken out of context however. I'll look for the interview.
I believe he has also publicly said that his play on water was to buy up private real estate, specifically almond farms in California with water rights and strong access to water. These would not show up in a 13f. My understanding was that he believed (1) almond farms were being valued on the basis of the current business while the long-term value of the water rights were being underappreciated/undervalued and (2) in the case of drought, the farms with the best access to water would be able make outsized profits as prices rise since farms without strong access to water would not be able to produce. Much of this thesis seems to have already played out years ago while California was in a drought and he likely raked in profits.
Okay, fair point. Let's remove Michael Burry from the equation. What's the possibility that this theory plays out like it was purported in the movie? Is anyone shorting water?
heavy rains and flooding refilled the reservoirs....and will trickle down to the underground water table. Water levels ebb and flow...but the planet has plenty of it
To your point/article, they are dealing with major water shortages in India right now in heavily populated areas because groundwater is running ultra-low, monsoons are late, and reservoirs are drying up even after recent major floods. I'm sure it'll be a play at some point.
I'd be interested in a long desalination play though.
Reviving this with the news this week:
https://www.bloomberg.com/news/articles/2020-12-06/water-futures-to-sta…
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