In this episode of Strategic Investor Radio, host Charley Wright conducts an in-studio interview with Thomas Schumann, founder and Manager of Thomas Schumann Capital. Schumann’s focus is on investing in water, which he says is quickly rising as an asset class. Mr. Schumann isn’t alone in this view: In 2011, Citigroup’s chief economist said he believed water was becoming the most important physical commodity asset class in the world – ahead of oil, industrial metals, gold, and agricultural products.
The exciting thing about investments in water, in Schumann’s view, is that they create “social, environmental, and financial impact” for the world’s 7 billion stakeholders. “There’s not one single human, environmental, or financial process on this Earth that isn’t driven by water,” says Schumann.
But how does one invest in water? Schumann says there are investment opportunities in companies and technology that provide water supply, improve water quality, and monitor water efficiency. Schumann’s eponymous firm is in the process of launching a specialist water fund, which will invest strictly in water and water-related companies.
There are big opportunities in the world’s two biggest markets: The U.S. and China. As a resident of Orange County, California, Charley says he is well aware of water issues. Schumann says “Flint is just the tip of the iceberg,” and that the cost of upgrading and maintaining the U.S.’s 100-year-old water infrastructure is estimated at $1 trillion over the next two decades. In China, at least 80% of the country’s water is so toxic that it kills fish.
When asked what keeps him up at night, Schuman confidently answered “nothing.” When asked to recommend a book on investing, he cited the Bible: “I believe the Holy Bible provides the best, timeless investment advice. It’s wisdom that teaches prudence, successful investing of one’s time, resources, talents, and gifts.”