Numbers Never Lie… Except When They Do

Most folks think more about the story of a business than the numbers behind it…

And usually, those two things follow each other… Are more customers buying a company’s products? Then it should be making more money. Or is the price of a major expense – like oil for an airline – going up? That’s probably not good for its bottom line.

Still, most investors do look at many of the key metrics – things like debt, cash flow, and return on assets – when considering buying an investment. Sites like Yahoo Finance, Google Finance, and Finviz collect all this information and put it in an easy to understand format.

My colleague Dan Ferris once wrote, “Without knowing a business’ key metric, you might as well take your money to Vegas and gamble it away.”

But here’s the problem… you can’t always trust the numbers.

My friend-and-now business partner Joel Litman discovered that there are plenty of companies that aren’t reporting their numbers correctly, for one reason or another. And it’s a massive opportunity if you can figure out their true earnings…

These are the stocks Joel looks for. When the rest of the market thinks a company isn’t that profitable and Joel discovers that it is actually highly profitable, he’s got an edge over the market. He can buy before the rest of the market realizes what he already knows.

And if there’s a company that reports fantastic profitability – but Joel discovers the real numbers don’t reflect that – it’s a sign to stay away.

It’s hard to find this kind of edge while investing. And average folks don’t have the interest or ability to delve into the numbers like Joel does.

That’s why Joel recently unveiled his “Investment Truth Detector” system that allows you to immediately see a company’s true earnings numbers… and where it’s likely going next.

According to Joel, his system is a way to see which stocks could soon double or triple your money…

Click here to learn more.

Q: Years ago I read that [there] may be a connection between aluminum and Alzheimer’s. Is there any medical verification of that? I know most antiperspirants contain some form of aluminum, so are they safe? – P.E.

A: In the 1960s, there was some thought that exposure to aluminum through diet caused Alzheimer’s. But in the decades since, we’ve seen no strong link to tie them together.

Longtime readers know I stay away from deodorants and antiperspirants as much as possible. They contain harmful chemicals like parabens and phthalates, both of which cause inflammation and, in the case of parabens, cancer.

There are a few things you can do to avoid them (or at least limit your use) while also avoiding unpleasant body odor…

I use deodorant only occasionally, and only lightly on workdays. And I try to avoid any underarm products on the weekends and vacations. You’d be surprised how good you still smell if you’re relaxed… Says something about stress, doesn’t it?

Q: Have you printed or provided links to a structured plan for fasting (to lose weight)? I’d like to explore possibly setting up a plan for myself. – C.R.M.

A: I recommend fasting for anyone looking to lose weight. In fact, a calorie-restricted diet (like fasting promotes) does lower your cholesterol. Researchers have studied calorie restriction in mice and rats, but one small human study really caught our attention. Published in the journal PNAS, this study looked at the lipid profiles for 18 people before and after they practiced calorie restriction. Some of these folks had stuck to the fasting diet for up to 15 years. Researchers also looked at their C-reactive protein (“CRP”) reading, which measures levels of chronic inflammation.

What they found was that caloric restriction led to lower cholesterol levels, improved blood pressure levels, and lower levels of inflammation.

A few of my friends have tried the “5:2” fasting diet. That’s where you eat a regular diet five days a week and then on two nonconsecutive days, you cut your calorie intake to about 25% of what you normally consume.

A simpler version of this is the “dinner plan,” wherein you finish your regular day with dinner and then don’t eat again until dinnertime on the following day. That’s effectively a 24-hour fast. You can do this once, twice, or three times a week. I’ve written about fasting several times. You can read more here.

Q: I suffer from acid reflux and used to control it with a PPI (proton-pump inhibitor), the generic OTC Prilosec. Since reading your many warnings about these drugs, I was able to switch to ranitidine or Zantac as it’s most commonly known. Now I read that the FDA has found N-nitrosodimethylamine or NDMA, an ingredient in ranitidine to cause cancer. The article also stated that the FDA is not calling for patients to stop using it although the pharmaceutical company (Valisure) that found the NDMA is calling for the FDA to recall ranitidine. What are your thoughts on this matter? – M.R.

A: Great, timely question, M.R.! We’ve been following this story closely. Ranitidine is the culprit here – it’s the active ingredient in H2-antagonist heartburn drug Zantac (and all of its generic versions). This week, not only was the alarm raised about how “Zantac Causes Cancer” but that the pharmaceutical companies Novartis and Apotex recalled all of their generic ranitidine products.

Then drugstores CVS and Walgreens pulled all ranitidine produces from their shelves. This all happened because a lab-testing company, Valisure, said they tested the drugs and found high levels of a cancer-causing drug, NDMA, in the heartburn pills. We know NDMA is dangerous at higher levels. But we regularly consume low amounts of it in foods like cured meats, whiskey, beer, cheese, and bacon.

We learned that Valisure used a high-heat test that created NDMA when used on ranitidine. So the numbers are not accurate. However, on Wednesday, the FDA announced it was now testing ranitidine products using a low-heat process. After limited testing, the FDA declared that it found “unacceptable levels” of NDMA. No word yet on what those levels are, and if they’re in all the samples or just a select few. We’ll keep following the story and update you as we learn more.

The takeaway here – try not to use heartburn meds. I’ve urged folks for years to make lifestyle changes (like avoiding trigger foods, getting regular exercise) first before turning to pills. H2 antagonists are much better than PPIs (like Prilosec or the generic omeprazole), but there are several active ingredients you can try. If you want to switch, look for Pepcid (famotidine), Axid (nizatidine), or Tagamet (cimetidine).

Keep sending us your questions, comments, and suggestions… [email protected].

What We’re Reading…

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
October 4, 2019