In the year 2136, what will historians remember as the big event of the early-2020’s?

What if it’s not Russia, or Trump, or AI?

What if it’s the time when obesity peaked?

 

GLP-1 drugs have been an absolute sensation. When Wegovy was approved for weight loss in June 2021, most people were thinking about COVID as the big medical problem to solve .

And yet there were 10 million Americans using GLP1 drugs last year. It’ll be 25 million by 2030.

Now, when the weight-loss drugs started to get noticed, the initial investment winner were the drugmakers. Novo Nordisk (who make Wegovy) saw share prices double, and double again.

But then investors moved on …

The ~3% fall in obesity in the chart below represents nearly 8 million US adults no longer being obese …

Source: Gallup

 

And so attention shifted – from “who makes the miracle drugs?”, to “what does weight loss mean for everything else?” Where can I make money?

Weight loss isn’t great if you sell food. Researchers estimate users of GLP-1 drugs eat one-fifth fewer calories. But shorting an industry is always a risk …

For airlines, maybe more interesting … One study estimated that if average passenger weight drops by 10%, US fuel costs would fall by 1.5%. That’s saving $2 billion a year for US airlines. Shame the oil price is going the other way for other reasons …

But. If millions of people are losing weight, there’s somewhere else to look.

Looking good. Feeling confident. Buying new, more … interesting … clothes.

Source: LSEG/7IM

Victoria’s Secret shares are up 357% since 2023. Some of that is smart inventory management. Some is cost cutting. And some of it is investors are betting that a slimmer America is good for business. If you know what I mean …

Compare that to Novo Nordisk who make the miracle drugs, down 59% from the highs …

Successful investing is often about the ripple effects, rather than the main event.

Not just about what’s happening today or tomorrow, but how today’s events might change the future, in weird ways.

Then, when reality and everyone else catches up, you make your money.

 

*Disclaimer* This article is for general information only and does not constitute advice. The information is aimed at UK retail clients only.

All information is correct at the time of writing and is subject to change in the future. Data Source 7IM