One of my recently friends just posted an Instagram story:
As you know from my earlier post about your beliefs, I like to keep track on what people are doing and how they are thinking about various products because it helps me to inform my portfolio decisions.
When I saw that my friend was buying Ensure, it brought back some memories to when my grandma started drinking it. So I thought I'd write a post about how Ensure will ensure you live a shorter life.
After all, the name of his blog is Living Without Stuff, not Living With Stuff That Will Kill You Faster.
What is Ensure?
If you aren't familiar with Ensure, it's a #1 doctor recommended source of complete, balanced nutrition in a bottle manufactured by Abbot Laboratories. Each shake is packed with 24 essential vitamins and minerals. 1
Ensure comes in a variety of different forms that you can pick from depending on what you want to acheive.
If you want to lose weight, there's one for you. If you want to gain or maintain weight, there's one for you. If you just had surgery and need to reduce insulin resistance, gee golly, there's one for you too.
If you go to the Ensure website, you can take a survey that will ensure that you find the right Ensure for your needs.
On the surface it looks like a wonderful product. It's beautifully marketed. There seems to be one for everyone, and Abbott is very bent on helping you find the one for you.
How it came into my life
A few years back, my grandma was admitted to the hospital for water buildup in her lungs. She thought she was going to die.
I remember the events around the incident quite well. I had made a weekend trip home from college to celebrate her birthday. We all went out to a fancy-type low-lighting restaurant where the dinner menu was set and you just choose your drinks. The lobster tasted like nothing, so we asked for lime and salt to try to bring out the flavor on our own. I wonder if that upset the chef.
Before the sun rose the next morning, my grandma was throwing up, having a really hard time breathing - we all thought it might be the beginning of her end, including her. We rushed her to the hospital and they started running tests immediately.
They were close to having to perform surgery to have stents put in her, but she fought hard and recovered to the point where the doctors deemed it unnecessary.
The next time I came up to visit, I came through the garage and saw several boxes of a thing called Ensure. I picked one up and looked at the ingredients. I was not happy, and went upstairs to inquire what the hell was going on.
My grandma came out of the hospital with a number of recommendations from the doctor, one of them to ensure that she drank a bottle of Ensure three times a day to ensure that she regained her strength.
What was on the label?
From my prior research on nutrition, I immediately recognized several ingredients that are not part of a healthy diet because they promote inflammation, cancer, diabetes, and a bunch of other bad things.
There were also some I had not heard of before. It might be surprising to know, but with the Internet, you can find a lot of information on a thing without leaving your chair. Google works particularly well for this.
The steps to do research on a thing are:
- Enter name of thing you want to learn about.
- Click on the links and start reading.
- If you have another thing you want to learn about, go back to step 1.
How 2 reserch: a live example
One of the ingredients that I had never encountered before was Carrageenan. If I search for 'Carrageenan' this is what I get:
Let's go on a bit of a detour to go through each of these links, starting with the sponsored result.
For each one, I'm going to look at ___ main things:
- Who owns the website
- How they write about Carrageenan
- What incentives do they have to write that way
The advertised result
The first result comes from FMC Corporation on their website 'foodsciencematters.com'. The domain is owned by Du Pont. Du Pont and FMC's businesses seem to mutually benefit each other. 2 Google displays this result as being an ad.
The page on Du Pont's website starts with an overview of what is Carrageenan, discusses its social and environmental benefits, provides a list of foods that contain it and why, then explains in great detail why Carrageenan is not bad for you, noting that "you may have heard some rumors of health concerns surrounding carrageenan safety" and that "there is a lot of misinformation and misguided science out there, and it can be difficult to know what is true and what is not."
The page wraps up the discussion with making sure that you understand that it's safe once more, then gives an appealing illustrated history of Carrageenan.
The SEO-optimized result
The second result comes from Wellness Mama on her 'website wellnessmama.com'. The domain is registered to a private registrant through Tucows.
The page opens in a similar fashion to FMC Corp's page, giving a short overview of what is Carrageenan, straight from 'the Google,' then dives into all of the problems associated with it, using quotes from doctors and researchers in the field to support the claims. The site does get you to try to sign up for a mailiing list in many different ways, which I found slightly annoying.
The conclusion is that Carrageenan "may not be as bad as some sources portray, but there is evidence that it can be harmful, especially if consumed regularly. So her family avoids it because there is an unknown risk that is not worth taking, and it's main purpose is thickening and does not serve a nutritional purpose.
The final result we'll look at is Dr. Weil's page 'drweil.com'. The domain is registered to Larry Tree of Weil Lifestyle, LLC, "an organization founded by Andrew Weil, M.D., is the leading resource for education, information, products, services and philanthropic contributions based on the principles of integrative medicine" 3
The page is found in the Q&A section, the question being "Is Carrageenan safe?" The answer starts with an explanation of what is Carrageenan and where it's found, just like the other pages. Dr. Weil references studies done by Joanne K. Tobacman, MD in 2012 which found that "exposure to carrageenan causes inflammation and that when we consume processed foods containing it, we ingest enough to cause inflammation in our bodies" which is the root cause of today's pop diseases like heart disease, Alzheimer's, Parkinson's, and cancer.
The article ends with telling us that the European Union has banned it for use in infant formula, while the FDA and WHO say it not of concern in concentrations up to 1000 mg/L. His official recommendation is to avoid consuming Carrageenan.
I encourage you to do this type of basic research for all of the things that you use, especially because it's so easy to do and will reveal things to you.
What is true and what is not?
After doing iterative research on Carageenan and several of the other ingredients listed on the bottle, I went to my grandma and told her to not drink it unless she wanted to die more quickly.
It turns out that my cousin's wife, a registered dietician, had echoed the doctor's recommendation for Ensure, her reason being it would ensure that she got all the nutrients she needs because she typically eats very little.
As always, I got a lot of pushback on my advice because I was up against a registered dietician, wife of the golden child of the family, who can literally do noting wrong. But, a while later, my grandma said Ensure made her feel strange and she stopped drinking it.
I'm glad that she did.
The investment opportunity
But that's not really what I'm here to tell you! I'm here to tell you to buy ABT!
Almost every American today has access to the Internet and carries a supercomputer in their pocket all day. Information like that we reviewed today is literally at everyone's fingertips. They can easily figure out that the ingredients in Ensure will damage your body.
Despite that, the increase in 2016 U.S. Adult Nutritional revenues for Abbot Laboratories was driven by the growth of Ensure sales, which account for about 35% of Abbott's revenues! 4
From this standpoint, ABT looks like a pretty good investment, but I would not have considered investing in it on my own because I decreased their customer count by one grandma. My friend's post reminded me that knowledge is siloed and most people are very trusting of authority.
The 'purchase the stock of the companies that you believe in' concept doesn't apply here. You should instead follow the concept of 'purchase the stock of the companies that others believe in.'
It doesn't matter what I believe. It doesn't matter what you believe. It only matters what most people believe, because they are the market. I am not part of Abbott's target audience, and they know that. Their target audience is the mass of people who will take the advice of 'experts' like the FDA, WHO, and their registered dieticians - like my cousin's wife - without spending time to figure out what it is they are putting into their bodies.
Abbott's target audience are those who fall for this:
Ensure contains ingredients that have negative effects on ones health. Because of this, there are other related investments that go hand-in-hand with an investment in ABT.
For example, if regular consumption of Ensure increases the change of diabetes, there will be several companies pumping out products to solve that problem whose profits should increase as a result of the increasing market size.
There are risks associated with any investment. Let's review some of them for ABT.
Consumers start doing research
The first risk is that consumers will start doing research on Ensure, realize that it's bad for them, and stop purchasing it. This will cause sales to decline as consumers look for alternatives and lose trust in Abbott.
I'd say that this is a low risk, because companies in the healthcare space tend to have very good contingency plans for things like this. The introduction of similar, but differently branded, new product, coupled with approval and recommendation from regulatory agencies, could be used to offset the losses from declining sales of Ensure.
They also donate heavily to authority figures on health that people are taught to trust. If bad news breaks, they can get ahead of it by utilizing the useful idiots on their payroll.
People read this blog
Low risk because nobody reads this blog. But if you're reading this and you drink Ensure, don't be fooled! I'm just a crazy person on a rant. Pay no attention to what I'm saying. You don't know who I am, and I could be lying for all that you know. I may even work for a competitor to Abbott!
However, if you do come to your senses, this risk can be mitigated by you not sharing this post with your friends, family, and colleauges. If you are inclined to spread the word, please drop me a line so I can take steps to reduce my holdings in ABT.
A competitor emerges Due to Ensure's immense popularity, other companies may attempt to compete for Abbott's market share. If the competing company has the resources to ensure approvals, a wide audience reach, and compelling marketing, sales of Ensure may be lost to increased interest in the competing product.
Make good decisions
As an investor, you should always be nimble and aware of what's going on. Take note of what people post on social media. If a competitor emerges, adjust your strategy accordingly.
Additionally, you may want to consider investing in a healthcare ETF or mutual fund to add diversification to your portfolio.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. I may or may not have initiated a long position in ABT in the last 72 hours.
2. In March 2017, FMC Corporation Completes Transformative Transactions with DuPont. (go back)
3. Found on the fact sheet on drweil.com.