Submitted by Daniel Drew of Dark Bid [4] [4]
Obese Nation: Investing In Profitable Heart Attacks
As The Washington Post recently reported, the average American woman now weighs as much as the average 1960s man [5]. The average American has gained about 25-30 pounds over the last 50 years.
[6]
In an era where eating is celebrated, anorexia is feared, and "fat shaming" has become socially unacceptable, it's no surprise that the pounds are piling on. We are reminded of the power of language as new phrases are popularized to provide consolation to an obese nation: big-boned, heavyset, solid, plump, hefty, stout, portly, and pudgy. All of these words are designed to prevent us from facing the truth: 78 million of us are a bunch of fat asses [7]. The reality is that losing weight is hard. Our bodies naturally gain weight, and we are biologically programmed to overeat [8]. In the battle between you and your body, you will probably lose.
How can the cynical investor profit from the reckless self-indulgence of an obese populace? Like Tyler Durden making soap out of discarded fat from the dumpster of a liposuction clinic in the movie Fight Club, the shrewd investor can find a way to profit from the fat industry. If designed correctly, the "Obese Portfolio [9]" will have returns that are correlated with Americans' widening waistlines.
The strategy for a Fat America is simple:
1. Long Health Care
2. Long Junk Food
3. Short Fitness
4. Short Healthy Food
There are a variety of ways to express this theme. I decided to look at iShares US Healthcare Providers ETF (IHF [10]), Krispy Kreme Doughnuts (KKD [11]), Weight Watchers (WTW [12]), and Whole Foods Market (WFM [13]). In the last ten years, the health care ETF is up 181%, and Krispy Kreme is up 144%. Whole Foods is only up 26%, and Weight Watchers absolutely tanked by dropping 87%.
[14]
As Americans continue to gain weight, heart attacks and emergency room visits should increase, doughnut consumption will rise, gyms will close, and healthy food stores will be stuck with inventory they cannot sell. But on Wall Street, greed is good. So if someone is going to have a heart attack, there's nothing wrong with making a few bucks from it right?
