Approaching Nutrition From An Investor’s Mindset

Over the last few years, I’ve read numerous accounts of people who have tried different diets only to end up in worse health. Most often the diet works very well in the short term, but then things go wrong. At the point things go wrong, the person following the diet usually stays loyal for an additional period of time until their health declines to the point where they are forced to change their nutritional approach. They then embrace a new diet that corrects the deficiencies of the prior diet. This lasts for a while until the same cycle replays itself out.

When I read the accounts of people who had poor experiences on a Paleo diet, I almost always see that they followed a strict, sometimes extreme, interpretation of the diet. Then after a honeymoon period, when their health gains started to reverse, they increased their commitment to what had already started failing for them. In the post Am I Paleo?, I mentioned that I never experienced any negative health issues from a Paleo diet and that I would explain why.

I’ve been fine with Paleo, low carb, ketosis, cold weather exposure, intermittent fasting, or even a massive amount of ice cream because I approach nutrition from the mindset of an investor. Nutritional gurus love to wrap themselves in their PubMed blankets and dish out narratives that they believe work for everyone, but a simple observation shows that isn’t working. The fact that some succeed in any plan does not prove it works for everyone. There are too many failures.

How does one succeed in nutrition when nobody seems to agree on anything? How can one get the benefits that arrive in the early stages of a diet without staying too long and compromising their health? What has worked well for me is thinking about nutrition like an investor thinks about investment opportunities.

MAS money
Young MAS

Undervalued, Overvalued

When you are investing the goal is to put your money into something undervalued and then get out before it becomes overvalued. In other words, buy low and sell high. The more undervalued the investment, the less risk one takes. If we think about this nutritionally, we benefit most from the nutrients and foods that we are deficient in. A fast-food junkie will likely benefit from a vegetarian diet and a vegetarian will likely benefit from a Paleo diet.

For a while.

I still recall the first time I had beef liver a few years ago. Although I’ve never had anabolic steroids, I imagine what I felt was similar. I had this surge of strength and felt amazing. However, by the 10th time I had liver, it was no different than an apple.

As an investment gets close to or hits its true value, the less return we can expect to receive. This leads us to our next investment idea.

Lock-In Your Gains and Re-balance Your Portfolio

Remember in investing as a security gets closer to its true value, the risks increase. The reason for this is it is no longer undervalued. The gains you got early on when the asset was undervalued are now gone. This is the time to re-balance your portfolio. A fast-food junkie that switched to a vegetarian diet might start adding some seafood or meat into the diet a few meals a week. A low-carb Paleo person might start adding white rice and fermented dairy. In each case, you are diversifying your nutritional portfolio.

But what if your new portfolio of food isn’t working as well? That brings us to our next investing idea.

Stop Loss Nutrition

A stop-loss order is an investment term. The definition from Investopedia:

An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a security position.

I’ll provide a simple explanation of how a stop-loss order works. At the time of this post, Apple (AAPL) is $430 a share. Let us say you did your research and you believe the stock will go up by $100, so you buy a share. However, you accept the possibility you might be wrong and the stock could drop by $100 a share. But you don’t want to lose $100, so you set a stop-loss order for $400. If the stock drops to $400, it automatically triggers a sale. You’ve limited your losses to $30.

Why not apply the same principles to nutrition? Define the point at which you will abandon or alter your new strategy. I think this would prevent many people from following ever-stricter versions of diets that have stopped working for them.

Hedging and the Fructose vs. Glucose Debate

Good investors will hedge their portfolios. They might have a primary thesis on what they think might happen in the market, but in the event they are wrong they also have a secondary thesis. They invest in both, so their losses are limited in the event their primary thesis is wrong.

In nutrition, there is a huge debate about which form of carbohydrate is superior. Paul Jaminet believes glucose is better. Andrew Kim sides with fructose. Both are extremely smart and they disagree with each other. What is the average person to do?

There are 4 possible ways to “invest” in this debate:

  1. Side with Paul Jaminet. Consume primarily safe starches and limit fruit and sugar carbs.
  2. Side with Andrew Kim. Favor fruits and limit starches.
  3. Assume both are wrong (the very low carb thesis) and greatly limit all carbs.
  4. Hedge. Consume both safe starches and fruit evenly.

As you probably guessed, I’m “invested” in #4. Now if I’m wrong, I’m likely not “too wrong”. I consider #3 to be a short-term strategy. One that I’ve already pursued and benefited from following.

Last Words

I left the low-carb interpretation of Paleo a year before the safe starch debate even began. I had leaned out and I wanted to lock in my gains. If I could add back carbs and stay healthy and lean, then my portfolio would be more diversified, which I view as less risky. And that is exactly what happened. Going from Paleo to a more WAPF diet was a no-brainer for me. The investor in me saw it as a very low-risk way to greatly expand my nutritional portfolio.

The problem with most nutritional gurus is they believe nutrition is a settled science and that their interpretation is correct. But simple observation shows that can’t be true. Not only is there too much disagreement, but even what they are disagreeing about is always changing. I don’t expect that trend to end. Nor does it need to. In the absence of information, I can still make good decisions when I approach nutrition using an investor’s mindset.


Add yours

  1. Expectations have become too high, delusional even. We are consumers and our contact point with reality has evolved into a marketing campaign where It All is a product that promises fantastic returns.

  2. I forgot to add this to the article, but the original hedging strategy is the seasonal approach.

    In the fructose vs glucose hedge, I could have picked a season for each of the 4 paths.

  3. I think this is a great metaphor for reasonable approaches to almost everything. There is no “one” nutritional answer for everyone for everything, and there are very few substances that we eat that are always bad. All humans need to admit to themselves that we are mortal, and that the best course is to take care of ourselves in a reasonable manner, have a good life, and recognize where the end is for all of us. Great post!

  4. Your thoughts on nutrition are full of common sense. Thank you. As you are busy with your caffeine withdrawal, I am trying something useful which I read from a Ray Peat comment, here:


    Dry instant coffee is close to 0.5% magnesium, so a cup of strong coffee has about 40 mg. I make strong drip coffee.

    The antioxidants in very fresh coffee might have some special value, but I think instant coffee is on average just as good as brewed coffee. The high temperature of espresso gets the most caffeine, lower temperature processes get the minerals and vitamins (mostly niacin) and aroma, but a little less of the caffeine.

    It’s important not to drink coffee on an empty stomach, it should always be with food, since it increases the metabolic rate, and can deplete glycogen stores.

    (I took away two things from the above – if I want to decrease the amount of caffeine, I should cut back on espresso coffee and have filter instead, and the other is don’t drink coffee on its own but with some food). I am doing both of these and find that I have less of a cortisol/adrenaline response to coffee ensuring I drink it with food and drinking filter coffee (I am getting less caffeine per cup).

  5. @Becky – Thanks.

    @Pauline – Espresso actually has the least amount of caffeine as the contact time is the shortest. However, it has the strongest flavor signal, which makes it the most addicting to me. I sold my espresso machine, which has helped me reduce my caffeine levels.

    The Peat folks are convinced that depleting glycogen is always a bad thing. I’m less convinced. Although I am willing to concede it may be bad for me at this time.

    Instant coffee? Interesting. My initial response is gross, since I roast my own coffee. However, if my goal is to do another longer detox then finding a lower caffeine alternative with a lower taste signal might be helpful.

  6. I find that physiologically the filter coffee with milk and sugar, gives me less of a jolt than an espresso with the same. Adding some food seems to slow that aftershock effect even further, its must also be related to my own response to caffeine. I never used to drink as much espresso as I have done recently, so diluting that effect is helpful in getting off those 2 caffeine daily spikes. I am also trying to reduce the 2 cups a day to one and a half then down to one. And as you say there is something uniquely addictive to an espresso, it must be the smell/flavour. I usually start the day on coffee now wait to have it with breakfast. So far so good.

  7. Please delete this comment if you feel it is inappropriate. It is off-topic but I think you might be interested. If not, my apologies.

  8. Just to put this out there, espresso actually has less caffeine than drip coffee. My understanding as a former barista and coffee roaster was that drip sits in the grounds for a while, extracting more whereas the steam -pressured espresso is quicker. Also, the typically darker roasts used for espresso tend to have less caffeine. There’s also the issue of serving size, which may or may not be influenced by cost as well. When out for breakfast, you have no trouble getting refills of coffee since you paid $2.50 for it, but you probably wouldn’t pay $12 for three lattes. And of course cream will help blunt caffeine’s effects. But I digress…

    On the topic of the post, I have to say I’m quite befuddled by people’s reactions to Paleo “not working.” I’m no investor, but I’ve intuitively used the approach you’ve outlined over the years. After starting out pretty LC, I switched to starches and fruit after I lost all the weight I wanted to, and now I notice I’ve naturally fallen into a seasonal pattern with those (it’s May, so I’m transitioning from starches to fruit). I had some lingering health issues that I wondered if diet had anything to do with, and I can definitively say that no, diet had nothing to do with it. There are fluctuations beyond my understanding, and if I chased each one thinking it had to do with the food I was eating, I would’ve driven myself crazy. There are hundreds of factors to consider in a human being, how can we possibly narrow it down to one? No doubt food is a biggie, but it’s far from the only. Hedging is the best bet for me, and I aim for variety and seasonality.

    I think a few other things are at play too. Different people approach diet in different ways, and I think this just comes down to their wiring. I had never been on a “diet” before Paleo, whereas others have been on everything from cabbage soup to juice cleanses. Some people just want easy answers, and as you point out, those don’t exist. For these individuals, micromanaging health is a dangerous rabbit hole.

    Another is that different people are going to have different starting points and goals, and different internal milieu. Chris Masterjohn’s AHS12 presentation on carbohydrates was an important reminder of this. It takes some patience and attention to figure this out for oneself.

    Thanks for a good post!

  9. Great perspective!

    Diversification may be just the term to help my mom stop telling me about the “everything in moderation” idea. Diversification suggests to me that thought is required before making a decision where moderation is often translated (by my mom at least) to everything being fine, as long as it’s not the bulk of the diet.


  10. @Txomin – Interesting. It is not a topic I know much about, but my inner economist tells me that attempting to solve problems with limited technology can be costly and may not even work. Better to admit we don’t know everything and focus on improving the technology. I guess the lesson is the same as this post.

    @Karen P and @Ali – Thanks for the comment.

    We have a mentality in nutrition and food that when the results start slowing, to go more strict. I think that is the root of the problem and it doesn’t matter if it is Paleo or Zumba or whatever.

  11. Rodger Menezes

    May 3, 2013 — 8:23 am

    Interesting way to look at your diet. While most of us don’t make adjustments to our portfolios as often as we should , the same could be said to how we approach our diets. A great reminder to how we should lock in thoses gains and to make adjustments in order to achieve some long term goals/ gains. After losing 120 lbs its been via an adjusted paleo concept diet that I believe has help me keep the weight off. Awareness is the key for me and your message reminds me of that.

  12. I love this post. The lucidity of your argument is undeniable. Out with rigid extremism in nutrition with all of the infighting and confusion! Let’s figure out where our investments have the most rewards for us as individuals. I have been playing around with different macronutrients lately and I think mixing it up is a great strategy.

  13. OUTSTANDING piece!

  14. Sylvie- The Simple Paleo Life

    May 3, 2013 — 9:52 am

    Its all coming back to me now… 🙂
    (finance major who works in a completely different field)
    Love it!

  15. A great blog post. Finally something that isn’t just for nerds. It’s a well rounded view to share with people in so few words. I would love for you to expand on it for the geeks that read this (like me).

  16. @Robb – Thanks! I’m honored

    @Ryan – I was actually thinking of doing a simplified version of this post. Hadn’t considered expanding it. Will give it some though.

  17. This is a great article, and i often go back to it when something confuses me in the nutrition blogosphere. I myself practice a hybrid of the perfect health diet, and peat. I feel great getting my carbs from root fruits in a 50/50 caloric proportion to milk, OJ, other fruits and the occasional iceream/pudding/jello/soda/chocolate/wine.

    However there is one issue i find really difficult to hedge, and that is the one of gut flora. The tendency in PHD and similar “ancestral” oriented methods is to reinforce the gut flora with probiotics or resistant starches or fermented foods, while the peatarian view is that all bacteria produce endotoxins and should therefore be limited, sometimes with extreme meassures like antibiotics. I certainly do not have the capability to dig extensively into the research.

    Maybe there is some way the perspectives could reinforce eachother, for example the naturally antibiotic raw carrot salad in the morning, and sauerkraut in the evening?

    Anny thoughts?

    All the best -Øyvind

  18. @Øyvind – One idea I have been thinking about is how many of those that are getting benefits from fermented foods often went through a period of high antibiotic use. Practitioners and hobbyists used fermentation to restore health. AT that time those foods were undervalued. As health is restored, those foods become fairly valued. And if gut health is restored and one is using Peat ideas to increase metabolism, them those foods could become overvalued.

    One way to hedge the PHD vs Peat view on fermented foods is pick a season or time period to favor one strategy over the other. I am less convinced the Peat folk are correct on this issue, so for right now I am assigning a confidence value of say 25% to their thesis. So come summer 2014, assuming I still feel this way, I could avoid all fermented veggies and kefir. Then when autumn arrives, invest in the PHD thesis until next summer.

    Your strategy works as well. The raw carrot salad in the AM deals with the “endotoxins” created by the evening sauerkraut.

  19. This is a great analogy, and an excellent line of reasoning. It also shows how diversifying your fields of interest can allow for strategies from one field to bleed into the next, which is reminiscent of Charlie Munger’s thinking strategies.

    This line of reasoning could be applied to imbalanced versus balanced foods as well. The more refined a food is, the more potentially “risky” it is in the sense that it is a high dose of an isolated, singular variable rather than a medium to small dose of lots of variables. This isn’t to say that refined foods have no utility, but rather that they might reach their threshold of utility faster. i.e: Taking a vitamin A supplement in high doses could potentially become toxic faster than eating foods high in vitamin A.

  20. This strategy of diversification also naturally coincides with the omnivorous nature of humans. Because there is a lot of fluctuation in food availability in the natural world, ancient human diets were probably forcibly diversified.

  21. @Hazmatt – Your comment regarding vitamins rings true to me and reminds me of a post on GettingStronger.

  22. Thank you for this post. Still true now and worth reading.

  23. Stefano Tommaso

    Jul 26, 2023 — 5:26 am

    Great post. My belief is that while we don’t know everything about exercise, we know a lot more about it than we do about dieting. Nutrition science is much more of a black box than exercise science is.

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