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Sin City Needs To Wet Its Whistle

By Stansberry Research Interview Series
Monday, September 18, 2006

Las Vegas is getting dry.
 
All that gambling, boozing and lechery can really work up a thirst. And Sin City’s primary source of water, the Colorado River, is drying up from droughts.
 
Vegas is going to have to come up with some agua fast. And Vegas officials are searching out alternate sources of water in the state.
 
Earlier this month, a hearing began for a $2 billion plan to transport some 33 billion gallons of water from aquifers located in east central Nevada.
 
On one side is the Southern Nevada Water Authority (SNWA), a group of officials in charge of making sure that Vegas keeps a rocking and reality doesn’t come a knocking.
 
On the other side of the dispute are the rangers, farmers, and wildlife officials who don’t want their environment turned into a dustbowl in the name of debauchery.
 
Comparisons have been made to the Los Angeles Purchase, a scam in the early 20 th century in which Sierra Nevada fueled its growth in a massive water purchase that left the Owens Valley a virtual wasteland.
 
One thing’s for sure, if the SNWA’s plan goes through, there’s going to be a ton of money flowing in the water sector in East Nevada. We’ve got a couple of weeks of hearings to go, but should SNWA win, there’s going to a few very sizable contracts going to water infrastructure and transportation companies.
 
In the meantime, take a look at Sierra Pacific Resources (SRP).
 
SRP owns 75% of the Silverhawk Power Station, a water-cooled power plant that supplies the Las Vegas Valley. It bought the interest in the plant from Pinnacle West Capital for $208 million in early 2006.
 
And guess who owns the other 25% of Silverhawk?
 
The SNWA.
 
The SNWA uses Silverhawk’s energy to power its water treatment facilities and pumping water to Vegas. Should the SNWA’s $2 billion water plan go through, you better believe SNWA is going to be demanding a whole lot more power from Silverhawk.
 
I’m looking into who the likely candidates are for SNWA’s potential future water transportation and infrastructure needs. I’ll let you know as soon as I find anything.
 
Good trading,
 
Graham




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Market Watch
Symbol Price
Change
52-Wk
S&P 500 1223.12 -0.1% +10.6%
Oil 38.22 -0.2% -0.3%
Gold 139.11 +0.8% +22.3%
Silver 29.51 +3.2% +62.6%
US-Dollar 79.17 -1.3% +4.3%
Euro 1.33 -0.8% -10.4%
Volatility 18.02 +0.1% -15.2%
Gold Stocks 590.99 +1.6% +25.5%
10-Year Yield 2.94 -2.7% -15.5%

World ETFs
Symbol Price
Change
52-Wk
USA 122.76 -0.1% +10.6%
Canada 30.56 +0.2% +18.0%
Russia 21.98 +0.2% +17.2%
India 37.92 +0.2% +19.4%
Israel 16.76 +0.4% +10.4%
Japan 10.69 +0.5% +7.0%
Singapore 13.71 -0.2% +18.1%
Taiwan 14.92 +1.0% +20.2%
S. Korea 57.19 -0.2% +21.5%
S. Africa 72.26 +0.5% +29.7%
China 43.84 -1.3% -3.3%
Lat.America 53.21 +0.1% +9.2%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.74 +0.1% +20.2%
Big Pharma 63.99 -0.2% -3.2%
Internet 72.58 +0.7% +25.0%
Semis 16.18 -0.3% +26.4%
Utilities 31.19 -0.3% +1.8%
Defense 18.47 -0.3% +8.9%
Nanotech 10.08 +0.5% +1.3%
Alt. Energy 10.24 +1.6% -2.0%
Water 18.62 +0.7% +13.8%
Insurance 16.08 -0.4% +19.0%
Biotech 20.56 +0.1% +26.6%
Retail 19.59 -0.6% +26.6%
Software 24.65 -0.6% +22.7%
Big Tech 53.85 0.0% +22.1%
Construction 13.20 +0.8% +14.8%
Media 13.73 +0.7% +24.7%
Consumer Svcs 67.38 0.0% +23.4%
Financials 55.01 -0.1% +5.7%
Health Care 63.90 -0.6% +1.2%
Industrials 63.51 -0.1% +19.3%
Basic Mat 74.64 +0.4% +27.8%
Real Estate 55.35 +0.1% +21.8%
Transportation 91.39 -0.4% +23.9%
Telecom 22.65 +0.3% +16.8%