Dirty, Stinky Garbage GOLD!

Tony Sagami

I love Taiwan. It is one Asia's most-scenic countries, clean and modern, with unbelievably delicious food and some of the friendliest, most-generous people in the world.

It is also a very important global technology hub with the world's first and second largest semiconductor fabrication plants — Taiwan Semiconductor (TSM) and United Microelectronics (UMC) — as well as major computer producers like Austek and Acer.

One thing that the city of Taipei has very little of, however, is garbage cans.

During my last trip, I walked block after block looking for a garbage can to throw away my empty Starbucks coffee cup. I never did find one and had to wait until I got to my hotel to dispose of it.

What I inadvertently learned was the unique way this island of 22 million people handles its garbage.

Musical Garbage Trucks

Americans recycle roughly 30% of all the garbage we produce. The Taiwanese, however, recycle almost double that with an admirable 58% recycle rate.

That difference is not just the Asian waste-not-want-not philosophy, but also the way Taiwanese dispose of their waste.

Most Taiwanese families live in apartments and don't have access to garbage cans. Instead, the Taipei government has implemented what it calls a "trash doesn't touch the ground" system.

Every night except Wednesdays and Sundays, residents gather at designated street corners and wait for the arrival of garbage trucks, which play Beethoven's Für Elise to signal their arrival.

The residents bring out their trash bags —- one filled with waste and the other with recyclables —- and personally dump them into the trucks.

You can see the Taipei daily garbage collection process in action on this free 1-minute YouTube video.

Dirty, Stinky Garbage Gold

According to the Environmental Protection Agency, Americans produce 236 million tons of garbage every year. At a global level, humans produce waste between 4 billion and 6 billion tons a year.

That's a lot of garbage!

Managing waste is a $1 trillion industry that could hit $2 trillion by 2020.

As you know, garbage removal isn't free. Big profits are buried somewhere in this $1 trillion industry. Here's how you can get a piece of that action:

Waste Management (WM) and Republic Services (RSG) are traditional waste collection companies and the industry's two largest players.

Waste Connections (WCN) and Casella Waste Systems (CWST) are similar companies that focus on small markets. Progressive Waste Solutions (BIN) is the largest waste management company in Canada.

The garbage/waste business has several sub-sectors, too.

  • Clean Harbors (CLH) is a specialty waste company that cleans up oil spills and other maritime waste.
  • US Ecology (ECOL) serves the hazardous and radioactive waste market.
  • Stericycle (SRCL) specializes in medical waste collection.
  • China Recycling Energy Corp. (CREG) is in the energy recycling business in China.

Garbage may be a dirty business, but it is also a big, profitable business.

However, don't rush out and buy any of the above stocks today. In the investment business, timing is everything so I recommend that you wait for my buy signal.

The amount of garbage the world produces is growing steadily and we have a limited number of places to put it. Companies with waste and increasing recycling solutions should do very, very well.

Best wishes,
Tony Sagami

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Posted 04-21-2014 12:38 PM by Tony Sagami
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