If you're hearing whispers that the dollar might be creeping up in value and that this might put downward pressure on commodities, then let me tell you: Don't you believe it. Although some upward adjustment might occur for the dollar, it's my opinion that this won't, by itself, reduce commodity prices. To think so is just too limited an economic scope.

First, we can believe that the platform of oil prices is going to hold solid. I do think that the price of oil will eventually recede, but it's not going to be soon and it's not going to be much. It'll be a couple years before we see any real decline, if we ever do. That reality gives us a good launching point for some speculation. Alternative fueling for motor vehicles will keep upward pressure on oils other than petroleum. Consider commodity soybeans, soybean oil, and palm oil as possible hedges. There's also potential in propane, and to me, natural gas is still artificially under valued. You might not think there's a relationship between these commodities and petroleum. Believe me though, there is. Also, like the high volume traded commodities, other vegetable oils, such as sunflower oil and cottonseed oil, are worth looking into.

Readers of this space know that the investment thesis offered here favors large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And along this line, Companhia de Saneamento Basico do Estado de Sao Paolo, or SABESP, is worth an evaluation.

SABESP (NYSE: SBS) is Brazil's largest water company, serving 22.7 million people. SBS provides water via about 6.6 million connections. The company also offers sewage services through about 4.8 million connections and more than 400 treatment plants. The state of Brazil owns a 50.3% stake in SBS.

Analysts really like SBS's leadership position in Sao Paulo water services, and customer growth prospects: the company aims to increase its customer base by 2 million during 2007-2010. Further, Brazil's solid economic growth provides an added macroeconomic tailwind. The Reuters F2007/F2008 EPS consensus estimates for SBS are $4.76/$4.96.

I read a quote in an article recently which stated, "What Wall Street is about is smart guys thinking about ways to make money from dumb ones." That quote is attributed to one John E. Fitzgibbon, the publisher of an online newsletter, in an article from Eric Dash via The New York Times. While Mr. Fitzgibbon's remark might validate special investing skill on the part of some smart and timely investors, I take exception to the notion that all those investors who lost money in the markets over the past year are the dumb ones.

The question now is, where is the smart money headed?

While many have opined that the water industry will be for the 21st century what crude oil was for the 20th century, water stocks got killed in 2007. Mostly due to a slowdown in residential construction, water infrastructure companies had large drops in profit. That being said, this industry is starting to show decent value.

My pick as the top performer for '08 is Mueller Water Products (NYSE: MWA). The company has taken measures to shore up their financial situation during the downturn in the construction cycle. They reduced expenses, increased cash flow and have strengthened their balance sheet. By trimming the fat and getting much leaner, Mueller is well positioned to benefit long term in the water infrastructure market once the housing market turns.

While I know this is controversial, and no one can pick a bottom, I think we will start seeing some bottom fisherman come in and start buying cheap real estate. If this happens, Mueller may well be a stellar performer in '08.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: The writer has no position in any stock mentioned as of 12/30/07.

This post is part of our Hottest Products of 2007 feature. Also check out our other Hottest Products of 2007 posts and let us know which product you think is the greatest thing since sliced bread.

When I first discovered the products of glacéau, maker of Vitaminwater, it was the summer of 1998, and there were four flavors of Fruitwater. The lemon ginger flavor was strange, at best, but I could drink an entire cold bottle of watermelon water after a run. Cranberry mint was curious and refreshing. They were lovely, with the tiniest hint of color and no sugar: what I'd always wished for in a bottled water.

Cut to 2007, when, in order to cater to the mass market's taste for sweets and the craze for vitamin-enhanced beverages, glacéau's Vitaminwater has been stocked with sugar and color. This summer, Vitaminwater was being guzzled by all my friends' children at family barbecues and birthday parties. The day-glo orange and green look oh-so much like the Kool-Aid and Gatorade we drank in decades past, and I have to say they're just as sweet. The watermelon water I loved has been replaced by four new flavors, all "naturally" sweetened; peach, raspberry, grape, lime. Sounds like Lifesavers! The kooky Whitestone, Queens management has sold (out?) to Coca Cola (NYSE: KO) for $4.2 billion. 50 Cent, famously, had a big payout thanks to his prescient investment in the stuff (he wanted to put his money in something healthier than his rap rivals' liquor ventures). For Coke, of course, it was just the latest salvo in the next generation of the cola wars (now it's enhanced waters and super-premium juices, but it's still the same ol' Coke vs. Pepsi).

While driving on LA freeways, I sometimes wonder: how strong are these structures? Were they meant to handle the huge amounts of traffic?

I hope so. But I also realize that throughout the US the infrastructure is getting old and needs replacement.

Well, the private equity folks are seeing opportunity. For example, this week, The Carlyle Group announced its Carlyle Infrastructure Partners fund, which has about $1.15 billion under management.

The geographic focus will be on the US as well as Canada, and Carlyle will look to invest in projects for transportation and water.

Actually, this is kind of a new area for private equity and as a result, Carlyle has hired 14 professionals to manage the fund.

More importantly, the opportunity looks vast. After all, Carlyle projects that the US will need to spend $1 trillion on infrastructure over the next five years.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Coca Cola (NYSE: KO) will pay New England Patriots heartthrob Tom Brady $3 million to $5 million to endorse Smartwater, Vitamin Water's sister brand that was acquired as part of the deal for Glaceau (which made 50 Cent a very rich man indeed...).

The Glaceau acquisition was part of Coke's strategy to pursue revenue growth as sales of carbonated beverage decline. According to the USA Today:

Brady, who dates a supermodel and makes gossip-column headlines as well as sports news, joins Jennifer Aniston in pitching the distilled water with added electrolytes. Replacement of electrolytes depleted in workouts can ease muscle fatigue. Smartwater is the top enhanced water with yoga enthusiasts, and Aniston has lent the brand a sexy, healthy lifestyle image. Brady adds some muscle to the healthy image.

You almost have to wonder about whether these products are a rip-off. If the company can pay Jennifer Aniston and Tom Brady millions of dollars to sell water, the mark-up has got to be pretty high.

But Tom Brady is as big as it gets right now, and this a pretty big coup for Glaceau.

This is the eighth in a series of trend-spotting tips from Hilary Kramer's newly-released book, Ahead of the Curve.

More than ever, we should turn our trend-spotting eyes to beyond our borders. In our increasingly globalized economy, there is money to be made everywhere. Trends that used start in the United States can be seen starting in China, India, Japan, Germany, Argentina... to name but a few countries. Right now, the dollar is weak, so investing in foreign companies may make more sense than ever.

Looking outside your borders, you will see that China is growing in leaps and bounds, which means it needs more and more water systems, but it has a serious pollution problem.

San Francisco mayor Gavin Newsom has made his share of headlines: In 2004, he ordered the city-county clerk to issue marriage licenses to same-sex couples, and he's been outspoken about homelessness, immigration and health care. Now Newsom has a new crusade: bottled water.

Last week, the mayor signed an executive order banning the use of city funds for the purchase of single-serving water bottles, and also banned the sale of bottled water on city-owned property. It's all part of the city's effort to become more environmentally friendly and less wasteful, and residents who sign an online pledge not to buy bottled water can get a free stainless steel water bottle. The city also recently outlawed the use of plastic grocery bags.

In an interview with Newsweek, Newsom said: "These people are making huge amounts of money selling God's natural resources. Sorry, we're not going to be part of it. Our water in San Francisco comes from the Hetch Hetchy [reservoir] and is some of the most pristine water on the planet. Our water is arguably cleaner than a vast majority of the bottled water sold as 'pure'."

While there are no major public companies that sell only bottled water, companies like The Coca Cola Co. (NYSE: KO) and PepsiCo (NYSE: PEP) could be adversely effected if the anti-bottled water trend catches on nationally. Coke and Pepsi own Dasani and Aquafina, respectively.

Many newsworthy happenings are bubbling up in the pool of activity surrounding clean-water technology. One is that India has launched the world's first floating desalination plant. Kapil Sibal, minister for science, technology and earth sciences, said Wednesday that the barge-mounted plant will produce up to one million liters of fresh water daily, and that the water would be superior to what's now available. The plant uses colder, deep sea water to assist in the cooling and condensation processes, resulting in a more efficient operation and using less energy.

General Electric (NYSE: GE) is supporting an initiative by Dynoil LLC to improve power and clean water resources in underdeveloped countries. GE is contributing solar energy modules and water filtration technology bearing its "ecomagination" certification to Dynoil's efforts to establish self-sustaining water filtration facilities in remote parts of India, Southeast Asia and Africa. Switzerland Guide News reported that Vic Abate, vice president of renewables for GE Energy, said, "We are very pleased and excited to have the opportunity to demonstrate how GE's ecomagination products can enable projects, like Dynoil's alternative energy/clean water initiative. These projects will help improve the health and safety conditions of areas lacking adequate infrastructure, transmission grids and direct access to safe water supplies." (The Switzerland Guide link is a must read!)

Accelerating Technology has reported that researchers at Lawrence Livermore National Laboratory have developed a new membrane material which could revolutionize water purification technology for the long term and reduce the cost of desalination by as much as 75%, when compared with reverse osmosis systems. Reverse osmosis is the current standard water purification technology, which involves forcing water molecules through a restrictive membrane. The lab's new carbon nanotube membranes sort molecules by size and using electrostatic forces. Although the new membranes have reduced pore size, they allow the same flow-through volume as the current, less restrictive membranes. The development could mean energy savings, as less force is required to accomplish standard flow rates. Researchers say the carbon nanotube membrane also holds promise for applications in capturing and reducing carbon dioxide emissions from power plants and similar operations.

Cramer on tonight's MAD MONEY on CNBC said he got stumped on a question about water holdings when he was at the University of Texas. He has a stock now called Pico Holdings (NASDAQ:PICO) that could be a winner. He said he will not endorse it though because it is very small and very thin. They hold water rights in Arizona. This one actually holds other investments as well that have rallied 300% in the last few years. Its water resource and storage unit is the main one that resells water and they are not a regulated water utility; it finished a 35-mile water pipeline last year; it holds real estate and insurance as well. It priced a secondary at $37.50 earlier in the month and he thinks it can go higher, but because it is so small Cramer says it is very risky and it is only followed by one analyst. Cramer thinks it could be a sleeping giant or it could stay dormant for years and years, so he reminds about the risk. PICO traded up 3% to almost $45.00 after closing up 2% at $43.61.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX up .08 to 10.28.

STMicroelectronics - (NYSE:STM) calls active as STM price approaches 34-month high. STM, a global semiconductor company, with a market cap of $17.4 billion and sales of $9.8 billion. STM is recently up .52 to $19.62 on takeover chatter. STM call option volume of 16,990 contracts compares to put volume of 516 contracts. STM March option implied volatility of 30 is near its 26-week average of 28 according to Track Data, suggesting non-directional price risks.

PepsiCo Inc. (NYSE:PEP) implied volatility at historic lows into Gatorade AM & Gatorade PM. PEP is recently down .68 to $64.35. PEP told the audience at CAGNY Gatorade AM & Gatorade PM will be available soon. Tava, a health-active lifestyle beverage will also be introduced in 2007. PEP over all option implied volatility of 12 is at historic lows according to Track Data, indicating decreasing price fluctuations.

Option volume leaders today were: Altria (NYSE:MO), US Steel (NYSE:X), Apple Inc. (NASDAQ:AAPL) and Whole Foods (NASDAQ: WFMI).

Please pardon me while I get a bit whimsical here. I get a prose bug from time to time. You must forgive me if this is light duty reading for such a well read crowd but I'm just having fun!
Submitted for the approval of our readers:

If I had bet upon the game and chance did let me win, let's say my take was twenty grand and now let us begin. I'd take ten grand right off the top and invest in GE (General Electric Company (NYSE:GE)). A stalwart and diverse keystone is paramount to me.

I'd next place 4k in the hands of Limited Brands (NYSE: LTD) for care. It's hard to take a loss, my friend, in sexy underwear. And candles bright and fragrances and things the ladies like, assure me that our LTD is on an upward hike.

Two grand I'd sure send Wal-Mart Stores, Inc.'s (NYSE:WMT) way, though kicked around a lot. I just can't seem to shake the truth they'd be a safer spot.

PepsiCo is scheduled to give its Q4 earnings review via live webcast on Thursday February 8, 2007. The PepsiCo website states that "the live webcast will be accessible through PepsiCo's website at http://www.pepsico.com, and will be archived for replay at the same website for a period of 14 days."

Based on estimates which PepsiCo, Inc. (NYSE:PEP) reaffirmed on October 20, 2006 in this press announcement, PepsiCo is expecting EPS of at least $3.31 prior to the effects of a completed tax settlement and a fourth quarter restructuring of manufacturing flow. PepsiCo states that core EPS should be at least $2.98. I'm expecting a penny or two more. The general consensus on investment blogs and message boards is that PepsiCo is doing well and will continue to do so. There's even some dialog about a stock split if PepsiCo reaches and holds $70 a share.

For third quarter 2006 PepsiCo had an impressive gain of 73% in EPS over the previous year but that was due in part to tax effects involved in the repatriation of cash in the year 2005. PepsiCo stated; "Excluding the impact of the prior year tax charge, EPS increased 12%.

An item of very significant interest is the fact that PepsiCo now offers a direct stock purchase plan via The Bank of New York. For as little as $260 you may now open an investment account and purchase PepsiCo shares. After your initial investment you may then add funds in increments as small as $50, and you may even set up your account for automatic monthly deposits. The fees associated with the Pepsico direct share purchase plan are almost non-existent. Review the purchase plan booklet I've linked to. I think you'll be pleased. They, with the assistance of Bank of New York, have made it very easy and inexpensive for you to become a share holder of the company. It's a situation which I myself plan to become involved with.

Playing into my declaration that water is a word for investors to watch for this year, PepsiCo will be pushing a new variation on its Aquafina brand. Aquafina Alive is a vitamin and flavor enhanced water which will be available in three flavor combinations.

Gary E. Sattler intends to take a position in Pepsico this year.

Also check out some other earnings reports that we're following, and let us know what you're expecting.

January's issue of Playboy features a lengthy interview with T. Boone Pickens, the legendary oil tycoon and corporate raider. In it he makes a number of interesting observations. Here are a few:

• Pickens said he does not think we will ever see $50-a-barrel oil again, and believes at some point we will see $100-a-barrel oil
• He is not invested in ethanol, despite his fondness for alternative energy plays, because he does not think it can operate without being heavily subsidized
• He is invested in natural gas, which he believes is the most feasible alternative to oil
• He gave two stock picks -- Suncor Energy (NYSE: SU) and Canadian Oil Sands Trust (TSE: COS.UN) -- both of which he is heavily invested in
• He discussed his investment in water, and although he said it was a worthwhile long-term investment, he clarified that he does not see water as the next oil, as water is a renewable resource and oil is not