Here is food for thought for the profit-oriented among us (yours truly included). Can you make money off of Obese America?
Here are some facts:
- 66% of Americans are obese or overweight.
- 7 million of them are more than 100 pounds overweight.
- $33 billion in services are spent each year on healthcare for the obese.
So, it should not be surprising that a widely followed website that tracks the stock portfolio of Wall Street mavens (Warren Buffett) and not so mavens—and some outright…well, you get the point—has created, (I am not making this up) an “Obesity Index”.
I thought it would be educational and, yes, profitable to take a look at it:
The Obesity Index
|Name stock (symbol)||Oct. 12 ’06||Apr. 12 ’07||% gain|
|Approx. Price||Actual Price|
|Life Time Fitness (LTM)||48||50.51||5.2|
|Town Sports Center (CLUB)||15||23.24||54.9|
|Nautilus Inc. (NLS)||14||14.30||0.0|
|Herbalife LTD. (HLF)||37||39.50||8.7|
|Weight Watchers (WTW)||46.5||47.3||21.8|
|For an enlightening comparison:|
Despite the widespread news of our obesity epidemic—the barrage of advice to eat less, the women’s magazines featuring all kinds of diets that “will burn fat away in 1 week”—there is no money to be made in companies that peddle diet foods. Why? Because people simply can’t stay on those cardboard-tasting offerings for too long. On the other hand, McDonald’s is raking it in, and damn the coronaries.
What about Herbalife, doesn’t everyone buy supplements?
Herbalife is a different story. Here is a summary of information obtained from Google:
- Herbalife Founder/Chairman Mark Hughes Found Dead at Age 44 (revised 12/17/04)
- Reports to the Securities and Exchange Commission
- Herbalife’s “Work at Home” Promotions (link to another site)
- Canadian Herbalife Marketers Fined $150,000 for Operating Illegal Pyramid Scheme (posted 12/13/04)
- The Dubious Promotion of Herbalife’s Niteworks™ (revised 12/11/04)
- Nobel Prize Winner Didn’t Disclose His Herbalife Contract (link to another site)
- Rick Ross Institute (index to many news articles)
My (free) advice: Don’t buy!
How about investing in exercise?
- If you thought that people would buy exercise equipment to counteract the “Supersize effect”, you would be wrong again; you could do better putting your money in the bank than buy Nautilus or Life Fitness. Reason? Just log on to eBay and you’ll see a deluge of “brand new” equipment offered at a deep discount by people who reneged on their New Year’s resolutions before you could say, Big Mac.
- The only booming businesses are the health clubs. People buy memberships, sometimes in two or three clubs, in an attempt to ward off the onslaught of the pounds. This is good, and if they also cut back on their Big Macs and Whoppers, they could really shed off quite a few of those pesky pounds. They could also drive McDonald’s to change its menu or face extinction. As to the astounding profitability of health clubs, the picture is not as healthy as it looks. A major source of their profits comes from all the ancillary stuff they are pushing: fortified water, food supplements, rejuvenating creams, vitamins tailor-made for every age and medical condition, real or imagined. And another open secret of the trade: A large percentage of the membership show up a few times, then never come back again; free money to the club.
So, as Deep Throat said, follow the money. All the public health surveys, academic research publications, and position papers by well-meaning organizations cannot be as clear and succinct as the message from Wall Street: People still haven’t internalized the reality of over-eating and under-exercising.