June 12, 2014
- Decades of demonizing saturated fat… and now? Never mind
- Weight loss drugs that don’t work… and a game-changing development due next week
- Hell on Earth in Iraq, and markets react
- Assessing the risk-reward balance in stocks as midyear approaches
- Bogus cancer cures, a reader cries. Our investment director begs to differ…
What’s the biggest lie the government tells?
There’s no shortage of worthy candidates. Like the consumer price index rising 2% a year. As we’re fond of saying, any resemblance to your own cost of living is purely coincidental.
Then there’s the one from 11 years ago about weapons of mass destruction in Iraq. That begat a series of unfortunate events continuing… well, right up through today.
Or how about this whopper…
“High levels of saturated fat and cholesterol in the diet are linked to increased blood cholesterol levels and a greater risk for heart disease.”
That comes from the federal government’s “Dietary Guidelines for Americans.” It has been conventional wisdom for more than three decades. Butter? Cheese? Red meat? Avoid.
But this conventional wisdom is quickly being turned on its head in 2014. And that reversal signals a profit opportunity you don’t want to miss.
We alluded to that profit opportunity last week… when our investment director Paul Mampilly stirred up a hornet’s nest among readers by linking rising rates of obesity to the introduction of the artificial sweetener aspartame in 1981. He shared the following chart…
“You see how that red line rockets upward?” said Paul. “It happened right after the introduction of the aspartame chemical as a sweetener.”
Readers objected: “It is certainly curious that the increase in obesity began at the same time as the introduction of aspartame,” wrote one, “but that in and of itself proves nothing.”
Well, the reader has a point. Because as it happens, the widespread demonization of saturated fat started right around the same time… and only now is the damage becoming obvious.
It began with the late Sen. George McGovern, best remembered for losing all but one state to Richard Nixon in the 1972 presidential election.
In 1976, he convened a fateful series of hearings before his Select Senate Committee on Nutrition and Human Needs. These hearings “almost single-handedly changed nutritional policy in this country and initiated the process of turning the dietary fat hypothesis into dogma,” wrote Gary Taubes in his landmark 2007 book Good Calories, Bad Calories.
McGovern had come under the spell of the low-fat diet guru Nathan Pritikin. He even spent a month at Pritikin’s clinic — where he found himself unable to stick to Pritikin’s guidelines. Heh…
But, undaunted, McGovern’s committee issued a report in 1977 that led to the feds’ publication of the first Dietary Guidelines for Americans in 1980. From this point forward, saturated fat was the enemy.
Just one problem: The human body needs saturated fat to feel satisfied.
But the Dietary Guidelines were quickly becoming the received wisdom. The makers of processed foods responded by removing the fat. Unfortunately, that rendered the foods as tasty as cardboard. Solution? Substitute sugar for the missing fat.
New problem: Sugar, unlike saturated fat, does not leave the body feeling satisfied; instead, it stimulates a craving for still more sugar.
So by the early 1990s, Americans were downing entire boxes of “SnackWell’s” cookies in one sitting and thinking it was all good. Hey, they’re low-fat!
Or as registered dietitian Cathy Nonas explained, “While people who want to drop weight have decreased dietary fat, they’ve also become volume eaters, giving in to a second or even a third bagel because they’re using no-fat cream cheese.”
And the red line on that chart kept rising and rising. Yesterday came word from the Centers for Disease Control that diabetes now afflicts 9.3% of all Americans — 29 million people.
Three months ago, the shaky edifice of anti-fat dogma collapsed in a heap. The journal Annals of Internal Medicine published an analysis pulling together decades of previous studies.
Its conclusion, as paraphrased by author Nina Teicholz: “Saturated fat does not cause heart disease.”
“The fact is,” Teicholz wrote last month in The Wall Street Journal, “there has never been solid evidence for the idea that these fats cause disease. We only believe this to be the case because nutrition policy has been derailed over the past half-century by a mixture of personal ambition, bad science, politics and bias.”
The tide of public awareness is quickly shifting. Teicholz has published a best-seller called The Big Fat Surprise. A documentary called Fed Up is now in widespread release. “What if the solutions weren’t really solutions at all?” asks narrator Katie Couric. “What if they were making things worse? What if our whole approach to this whole epidemic has been dead wrong?”
Awareness is one thing… but it doesn’t solve the epidemic of obesity that’s now swept the nation. And the drug industry is woefully lacking in solutions…
“I think all the companies are finding it a challenge to get much traction with their medication,” says Dr. Michael Jensen, a professor of medicine with the Mayo Clinic.
Two weight loss drugs have come on the market in the last two years. Neither has been a blockbuster. Yesterday, the FDA delayed approval for a third.
“Despite the urgency of the problem, doctors and patients have had a lukewarm response to the latest meds,” Businessweek reports.
“That’s partly because the drugs are only modestly effective. Patients and doctors also haunted by an earlier generation of diet drugs that were pulled from the market because of sometimes lethal side effects.” Remember Redux and fen-phen? Yeah…
Next Tuesday has the potential to change everything. That’s when the FDA delivers its early verdict on a medical device that more or less tells the brain “I’m full.”
Doctors implant the device; the patient goes home the same day. Trials show the typical patient losing 25% of his excess weight. “No other kind of obesity therapy even comes close to these results,” says Paul Mampilly, who’s thoroughly vetted the company that makes this device. “The best weight loss drug on the market right now can help you lose only 9%.”
Previous FDA clearances for medical devices have delivered massive gains in a short time — such as a firm called Stereotaxis last summer. It leaped 469% in six days…
Paul’s outlook for the maker of this weight loss device is a bit more conservative, but still impressive: A favorable call from the FDA on Tuesday, June 17, could mean a quick 150% jump. Final approval could boost those gains as high as 400%.
Again, the decision is due next Tuesday. So there’s still time to review Paul’s research and make an informed decision. But it’s best if you jump on it now — click here to check it out.
Iraq’s descent back into civil war is casting a shadow over nearly every market today — especially oil.
Crude has crossed the $106 barrier for the first time since last September. Gold is likewise getting a geopolitical tail wind, up nearly 1%, to $1,272.
Stocks are slumping; as we write, the Dow has shed 60 points in addition to the 100 lost yesterday — it’s at 16,782. The S&P 500 sits at 1,937 — off 14 points from its all-time high set on Monday.
It didn’t help that the Commerce Department’s retail sales report whiffed this morning — up 0.3% in May; the “expert consensus” was looking for a 0.6% increase. And most of the growth came from auto sales — or should we say auto loans and leases.
“This is still a buy-the-dips market,” says Jonas Elmerraji of our trading desk. The S&P 500’s long-term uptrend that started in late 2012 remains solidly in place…
But shorter term, “the risk-reward is dramatically changed from where it was at the beginning of June,” he says. “If you were to buy the S&P right now, you’d be exposing yourself to a lot of downside risk for a little upside potential.”
In other words, don’t be surprised if the S&P moves down to that support level in the next couple of weeks.
[Ed. note: Only two days remain in which we’re accepting entrants for Jonas’ $10,000 Trading Challenge.
You don’t need any previous trading knowledge or experience. All you need is five minutes of time for five trading days and Jonas will prove how you can generate $10,000 with a few short-term trades. Bet you could do a lot with an extra $10,000 right now…
You don’t commit yourself to buying a thing by signing up, and all it takes to sign up is 30 seconds. Here’s where to act.]
“I find it funny that you are talking about cancer cures in the next 15 years,” a reader writes after Paul Mampilly’s take on cutting-edge cancer research Tuesday, “when other countries like Costa Rica, Switzerland and places in South America have been curing terminal cancer patients for over 15 years now — without using cut, burn and chemo methods.
“Cancer cures have been a billion-dollar scam here in North America for decades, forcing people to lose family and friends all because of the moneymaking scam that cancer presents and Big Pharma’s control over our society.
“We just need to have our doctors to go to these countries and learn and allow their medicine into the country. Cures there are so common that they are dirt-cheap compared with what it costs here to do.”
“Sorry, but this is 100% false,” Paul replies. “Completely untrue.
“I know this from personal experience because I am originally from India, where we have one of the oldest traditions of natural medicine. This ancient tradition is called Ayurveda. I can tell you that Ayurveda has many wonderful things about it, but it’s completely and utterly useless when you’ve been diagnosed with terminal cancer.
“In a recent issue of FDA Trader, I recommended a company that has two drugs that used in combination extend the lives of 82% of people with advanced melanoma. This new combination biotech drug cocktail is going to double or triple the five-year survival rate of patients in this cancer. As it stands right now, about 85% of these kinds of advance melanoma patients die within five years of being diagnosed. It’s tragic, but things are going to get better.
“You think Steve Jobs and his family would like to have another three years to live? Well that’s exactly what today’s biotech drugs deliver right now for some types of cancer. And in a year, we’ll have a couple more drugs that these patients can use that will help extend their lives another three or four years. And then in 15 years, cancer is going to cease to be a death sentence and become just another disease that you get treated for.
“What natural medicine is going to deliver that for our friends and family members with cancer? I can give you the answer. No natural medicine is going do that. Period.
“This is an extraordinary time for medicine because of our understanding of molecular biology, and it’s going to save thousands of lives that otherwise would be lost. And people should not listen to these cranks who go on and on about natural cures. Sure, there are elements of natural medicine that are going enhance a patient’s comfort and make them feel good. But these are not a substitute for the real and significant benefits of our new and highly effective drugs that we are coming up with for cancer today.”
Best regards,
Dave Gonigam
The 5 Min. Forecast
P.S. OK, this has admittedly been a heavy episode of The 5 today. So apropos of nothing, we pass along a meme that landed in our inbox this morning. We have no idea whether it’s for real. Assuming it is, we present it with no further comment…
Well, one comment: The meme speaks to something we’ve been saying for a while about the value of our money… and more importantly, what you can do about it.