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Hot Commodity - Blue Gold

Tuesday, 3 Apr 2012 | 5:52 PM ET
Fast Money Portfolio
Fast Money Portfolio

If you’re looking for a commodity trade David Henderson of XPV Capital Corporation suggests something extremely precious.

Water also known as blue gold.

Although you might find water as a commodity trade hard to swallow, Henderson says there are 5 mega-trends in place that should drive demand through the roof. They are industrialization, urbanization, climate change, infrastructure failure, and population growth.

Fast Money Portfolio: Water As an Investment?
Is water the next big commodity trade? David Henderson, XPV Capital founder, explains why his firm is investing in high growth water companies.

And if that list makes you think of water as an emerging markets trade, Henderson says think again. “All of those mega-trends impact the developed markets, too” he says.

“Take infrastructure failure as an example. In the developed world we have infrastructure that was put in the ground right after WWII that had a 50-70 year life span. We’re seeing it fail every day.”

If you’re looking to trade the trend Henderson suggests looking at companies that supply the needed infrastructure buildout and repair. They are GE and Xylem as well as Pentair .






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Trader disclosure: On April 3, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith McCullough is long GLD; Keith McCullough is long XLU; Tim Seymour is long INTC; Tim Seymour is long BAC; Tim Seymour is long CSCO; Tim Seymour is long FCX; Joe Terranova is long VRTS; Joe Terranova is long NXPI; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMC; Joe Terranova is long MSFT; Joe Terranova is long JOY; Joe Terranova is long OXY; Joe Terranova is long JQD; Dan Nathan is long AAPL APR 585 PUTS, LONG JAN 450 PUTS; Dan Nathan is long BAC MAY 7 PUTS; Dan Nathan is long YHOO APRIL 16/17 CALL SPREAD; Dan Nathan is long IBM APRIL 205/200 PUT SPREAD; Dan Nathan is long RIMM JAN 20/27.5 CALL SPREAD

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