Montreal, Canada

The concept of Peak Oil was coined more than five decades ago by a prominent U.S. geologist who many believed was off his rocker because of his outlandish forecasts for long-term oil prices. That supposed “nut” was King Hubbert. That forecast, made way back in 1956, was spot on the money as oil prices have skyrocketed over the past 12 years.

Peak Oil implies that the world’s supplies are not being replaced to meet rising demand. And the facts confirm this trend as most companies and countries that produce the black stuff can’t replace their annual production – now in a long-term decline. The recently discovered Brazilian offshore deepwater reservoir ranks as one of the only big finds in the oil space since the 1970s.

Water is now in peak production. Though it might seem plentiful, barely 2% of the world’s total water is actually drinkable in the absence of water filtration.

You can’t buy a water futures contract and you can’t trade water options. Governments will never allow speculators to control the water supply because it’s simply too politically sensitive.

But you can buy one of the world’s best and most undervalued companies dominating this compelling long-term investment theme.

That’s exactly what we did in the upcoming issue of The Sovereign Individual.

This company, which spits out a chunky 5% dividend yield, also sells at less than 11 times trailing earnings and trades more than 70% below its all-time high more than three years ago. That’s bargain-country where I come from. Most other water stocks or utilities are now approaching their 52-week highs and offer poor values.

What’s really exciting is that despite the recent global credit crash and the resultant cancellation of massive infrastructure spending in many countries, governments are increasing their provisions for water irrigation and filtration – especially in the emerging markets. China and India, for example, already face serious water shortages but have boosted spending on water infrastructure since the credit crisis in 2008.

Many countries already suffer from poor water quality, a lack of supplies and little to no water filtration capabilities. That’s all changing because the emerging markets now have the financial muscle and, in most cases, positive budget balances to address this critical issue.

Water is now one of the scarcest commodities amid bulging population growth and the insatiable demand for foodstuffs and livestock. Just about every facet of commodity production requires a tremendous amount of water and it’s only getting worse.