Obesity walking
Obesity. Climate change. The world's ever-increasing energy needs. These are just some of the megatrends analysts see coming down the global pike, trends that investors can draft behind to make money from the companies that will benefit from them.

Welcome to the world of megatrend investing, where securities companies build portfolios around themes they believe will have long-term, lasting impacts on society.

No, It's Not Profiting at Others' Expense

If this investing style sounds like trying to profit from others' misery, rest assured, it's not. Sure, you could look at the global obesity epidemic and cynically buy stock in Coca-Cola (KO) and McDonald's (MCD), hoping that the world will keep overindulging its way to your benefit.

But what about investing in the companies positioned to fight obesity? Or those which, at the very least, will be forced to deal with the unavoidable repercussions of an overweight population until the issue is remedied?

Bank of America Merrill Lynch (MER) is proposing just that.

Fighting Fat Around the World

In a new report titled "Globesity -- The Global Fight Against Obesity," Merrill Lynch proposes a basket of 50 stocks it sees making gains from the fight against global obesity. The report identifies specific segments of four key sectors for investors to watch:

  • Pharmaceuticals and health care: companies taking on obesity-related medical conditions; companies that specialize in equipment for overweight patients, like bigger beds and wider ambulance doors.
  • Food: companies trying to access the $663 billion health-and-wellness market.
  • Commercial weight loss, diet management, and nutrition: companies trying to access this already $4 billion U.S. market and the growing global one.
  • Sports apparel and equipment: companies in tune with the belief that governments and the general public will become increasingly aware that exercise is of paramount importance in taking weight off and keeping it off, and as such will do well selling the necessary equipment.


A Clear Strategy for a Foggy Financial World

Intrigued by the idea of megatrend investing? You should be. It offers one of the closest things to a clearly defined investing path as you're likely to find in this post-crash, slow-growth financial world.

It doesn't take an expert to see that the four trends listed above are already in motion -- and catching the eyes of investors. "Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world," says Sarbjit Nahal, equity strategist at Merrill Lynch Global Research and one of the researchers behind the globesity report.

But before you go charging off to contact Merrill Lynch or find obesity-fighting investments of your own, take careful note of the rest of Nahal's quote: "Global obesity is a megainvestment theme for the next 25 years and beyond."

That's right, 25 years and beyond. They don't call them megatrends for nothing.

Buying for the Really Long Term

Global obesity, climate change, energy issues, and the like are long-term problems. They are almost certain to play out, but your investing strategy has to be long term: buy-and-hold taken to the nth degree.

Buy-and-hold is still the classic way to invest in the stock market. It's what made Warren Buffet rich, and it's what The Motley Fool preaches as well.

That said, you can't just buy shares blindly in a trend-related company and then go fishing. Anyone remember Nutrisystem (NTRI)? Back in 2005, it became one of the hottest stocks around -- a company on a mission to help people everywhere tame their weight. At its peaks, Nutrisystem was going for more than $70 a share. Today? $10.95. So no matter what kind of investing strategy you follow, always stay alert.

You just have to remember that, over the long term, even companies surfing on the waves of megatrends are going to come and go. But keep a sharp eye on your investments, and those trends may reap you mega rewards.

John Grgurich is a regular contributor to The Motley Fool, and owns no shares in any of the companies mentioned in this article. The Motley Fool owns shares of Coca-Cola, McDonald's, and Bank of America. Motley Fool newsletter services have recommended buying shares of McDonald's and Coca-Cola.


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21 Comments

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audwinn

If you really want to learn how to capitalize on global obesity with very low risk on your part, email me at audwinn@aol.com

August 05 2012 at 10:35 AM Report abuse rate up rate down Reply
Richard

It all comes under the heading of personal responsibility. Why should taxpayers fund care for someone who has over indulged and not cared for their health. Sociologist William Graham Sumner had an interesting theory - its was basically called...Survival of the Fittest....whereby society would have NO responsibility for those who obviously have thought it not important to care for themselves.

July 27 2012 at 11:20 AM Report abuse +1 rate up rate down Reply
Tracey L. McNeel

A few days ago, aol.com had written an article about the most to least physically active countries all around the world; In general, the journalist, by his/her research studies, had noticed that the countries that were the most INACTIVE were the ones which usually had much wealth; being in chronological order(from least active to most) are the following: 1. Naltat 2. Saudi Arabia 3. Swaziland 4. Argentina 5. Serbia 6. Micronesia 7. Kuwait 8. United Kingdom 9. United Arab Emirates 10. Malaysia 11. Japan 12. Dominican Republic 13. Namibia 14. Iraq 15. Turkey 16. Cyprus 17. Italy 18. Ireland 19. South Aftica 20. Bhutan 21. Samoa 22. Portugal 23. Spain 24. Marshall Islands and last, but not least, 25. Brazil. USA's status?; 59% Active and 41% Inactive....amd when I exercise having to hear the yells and screaming from those far ahead...as I am still on the path of staying in shape for not only controlling weight issues, but also health reasons; those who are yelling when I exercise; they can just shove more food in their faces, perhaps that will make them feel better while the rest of us who are health conscience people can continue to enjoy our physical activities;. My motto; yeah you are being a menace toward my work outs, and you can yell at me all you want, but remember this, as I am getting thinner and healthier, you are getting fatter-LOL!

July 26 2012 at 11:15 PM Report abuse rate up rate down Reply
bigwave48

What we need is a system were , you sign into a facility , you are locked up and forced to excercise and
eat wholesome food for 6 months.... Then you are ankle locked with a device that will let the fat police
know if your over eating... if you are they will send you a jolt of electricity, that will shock the hell out of
you... It sounds ridiculous ... but , really is it.....If you could lose that 50 lbs , you've been carrying for the
twenty years,, wouldn't it be worth it... diets don't work... we all know that...

July 26 2012 at 9:31 PM Report abuse +1 rate up rate down Reply
1 reply to bigwave48's comment
hhall2079

What about people who are overweight for medical reasons such as hypothyroidism? When your metabolism is shot it is very difficult to lose any amount of weight. A lot of people are out there in the world with medical issues that cause them to become overweight. And for example hypothyroidism if you are not on the correct dosage of medication (which usually takes months if not years to find) no amount of eating healthier or exercise will keep you from gaining weight or even losing it. I speak from experience I was always thin then in 9 years I kept gaining weight no matter what I did but I was always tired. I found out I had hypothyroidism and after changing my meds a couple of times and in a year after I was diagnosed I lost 70 pounds from eating better, exercise, and having a normal thyroid.

July 27 2012 at 1:24 AM Report abuse rate up rate down Reply
jahlaen

I am on it!
It's suprising to see that the infromation presented is on the money.
This story match my area of investing interest so closely, that it hits close to my current portfolio.
The FDA approved two weight loss drugs, in pill form, within the past month.
And we also have Allergan(AGN), based in Irvine, CA conducting clinical trials to increase the reach of it's LapBand marketing to obese teen-agers. Check out this huge global, online LapBand support community to get an idea on how thousands of people's lives are being radically transformed by lap-banding:
http://www.lapbandtalk.com/index.php?

The future is happenig now for "globesity, if you will...

July 26 2012 at 7:47 PM Report abuse rate up rate down Reply
1 reply to jahlaen's comment
abcadams1

What is the test of people who had the lapband ten years later? Did they gain their weight back? My guess, 100% gained their weight back. Also, suicide rates of those who used the lapbad are twice as high as overweight people who did not have the lapband. So basically, you are selling suicides and false hopes.

July 26 2012 at 8:15 PM Report abuse +1 rate up rate down Reply
1 reply to abcadams1's comment
jahlaen

NO! You can't just pull data out of thin air with no sourcing. You mentioned "100% of Lapband users gained their wwight back and that suicide rates are twice as high with the Lapband as with with the population of over-weight people".
You are such a "prevericator". I challenge you to post a link, or just source your data. This product has been on the "global-world market" for perhaps close to 20 years and I've never read any published studies or reports, that veriifes such BOLD claims.
Have you even broused: lapbandtalk.com and read the stories of the thousands of lives that have been transformed by the lapband.
I have a friend whose life was turned around in a "miraculously positve way " by this product. She shed over 200+ pounds in 2.5 years and is healthy and still looking awesome going on 6= years strong. She claimed that the Lapband saved her, and gave her back a fabulous and fun life.
I suspect you are just a regular pretentious blow-hard -- a fraud -- who pontificates on subjects you don't know anything about.
LET'S SEE YOUR DATA!
Show us where you got your "independent and veriafiable info and studies" about the Lapband that allows you to speak with such... "EGG-SPURTISE"?
I bet YOU wont because YOU can't!

July 28 2012 at 7:40 PM Report abuse rate up rate down
Exhume

With obesity on the ever upward trend I feel safer because when the Aliens do come they'll eat the fat ones first.

July 26 2012 at 7:11 PM Report abuse rate up rate down Reply
1 reply to Exhume's comment
bigwave48

I like it....

July 26 2012 at 9:32 PM Report abuse rate up rate down Reply
George

Please no. Is there not enough negativity and hate and shallowness around already. Please, enough with this crap. Let people live how they wish. All this does is create images and shallow concepts that cause people to either become violent towards others or themselves. This is enough. What is wrong with us as people. Stop. Stop., Stop. Think about how much you people sound like complete jerks all the time. And this is coming from a skinny person. This is enough. No more. No more hate. No more negativity. No more shallow based thinking. All people are beautiful just the way they are. If this becomes and issue I am packing up and leaving this nation as it has become nothing but pure evil.

July 26 2012 at 5:13 PM Report abuse +2 rate up rate down Reply
whackjobtwo

For investers nows the time to capitalize on FAT.

July 26 2012 at 4:29 PM Report abuse +1 rate up rate down Reply
1 reply to whackjobtwo's comment
bigwave48

The only answer is the Fat Police,, and electric treatment...

July 26 2012 at 9:33 PM Report abuse rate up rate down Reply
abcadams1

Does the stuff really work? People who have obesity surgery, check them out ten years later to see if they have gained their weight back. Chances are, especially with the lapband surgery, the answer is yes. Check out people who go on diets. Do they stick with them ten years later? Chances are no and they gain their weight back plus more. What about exercise machines? Are they using them to work out in or is it a hanger for their clothes years later? What about all those who were on Phen-Fen? What other side effects come from weight loss pills?

July 26 2012 at 2:37 PM Report abuse +1 rate up rate down Reply
strongbow

kafienkarl:

"Lots of people talk about personal responsibility but its just talk that sounds good."

Ummm...okaaay.

July 26 2012 at 11:05 AM Report abuse +1 rate up rate down Reply
1 reply to strongbow's comment
kafienkarl

Your point?

July 26 2012 at 2:14 PM Report abuse +1 rate up rate down Reply