Lessons From a Doomed Dominator

Throughout much of the 19th century, everything seemed to go right for P&R...

Founded in 1833, P&R (the Philadelphia and Reading Railroad Company) constructed one of the first railroads in the U.S. Its main line ran from Northeastern Pennsylvania down to Philadelphia. Most important, it provided a low-cost way to transport anthracite, a type of coal.

Anthracite was the backbone of America at the time. Not only was it used in homes for heating and cooking, it was used industrially in the manufacturing of iron and steel.

Hundreds of thousands of tons of coal were shipped annually, with railroads playing a key role in its transportation. (This is still true today as railroads handle 70% of coal transport.)

One of the largest anthracite deposits was in the northeastern area of Pennsylvania called the "Coal Region." So P&R was perfectly positioned to take part in the industrial coal boom of the 1800s.

Over a span of three decades, P&R became a dominant force in the coal industry – both transporting and mining the material. It acquired several railroad competitors, bought up 30% of Pennsylvania's anthracite lands, and controlled more than 40% of the entire country's anthracite reserves at its height.

For a short time, P&R was one of the largest companies in the world. Investors who got in early made a fortune. But then the cracks started to show...

Thanks to its massive amounts of debt, P&R filed for bankruptcy twice in the 1880s. Even under new leadership, the company continued to make the same mistakes. Its untamed debt and widespread economic Panic of 1893 ultimately led to P&R going bankrupt again and reorganizing.

The problems persisted for decades until P&R finally left the railroad and mining industries entirely. The version that exists today, Reading International (RDI), is a real estate and entertainment company. But it's no longer a household name or a way for investors to get rich quick.

We've seen similar stories play out over and over again... companies that once dominated a booming industry falling from grace.

For a more recent example, look at photography company Kodak (KODK)...

Kodak was the Apple (AAPL) of its day. It was a "sleep well at night" ("SWAN") blue-chip stock. As the prime inventor of camera film, the company was on the constant edge of innovation for decades. As late as the 1970s, it sold 90% of the film and 85% of the cameras in the U.S.

But a combination of poor business decisions and the introduction of digital cameras spelled the end for Kodak. The company went bankrupt in 2012. And even though it emerged from bankruptcy the following year, it has never returned to its former glory.

Stories like Kodak's and P&R's serve as cautionary tales. When what were once SWAN companies go bankrupt, some investors inevitably lose everything.

It's tempting to throw all your money into a company that you think will be around forever. But even companies that are essential to us today could be gone in a few decades.

Right now, my friend Marc Chaikin of our corporate affiliate Chaikin Analytics says we're headed for a shift... His system flashed a bullish signal on every single "Magnificent Seven" stock before it skyrocketed.

Now, in the wake of the biggest sell-off in years, things have changed. And anyone holding stocks today could face severe consequences if they don't prepare for what's coming next.

According to Marc, the Dow Jones Industrial Average's 1,000-point plunge last month was only the beginning. Certain corners of the market could see even larger downturns. It's more crucial than ever that you act now before things get worse.

Marc held a special briefing last night to detail the exact steps to take with your money to help you prepare.

If you missed it, you can watch the replay here.

Let's dig into the Q&A... As always, keep sending your comments, questions, and topic suggestions to feedback@healthandwealthbulletin.com. My team and I really do read every e-mail.

Q: How would you regard substituting honey for sugar and sweeteners? Thanks. – G.V.

A: Natural honey is a very nutritious food with healing properties. Ancient Chinese, Egyptian, Greek, Assyrian, and Roman cultures all used honey as medicine. And today, it's still used as medicine in some health traditions – like Ayurvedic medicine, where honey may be recommended to treat indigestion, coughs, and insomnia... and for keeping your teeth and gums healthy.

Studies show that honey:

• Heals wounds
• Is antiviral and antimicrobial
• Fights inflammation
• Protects against cancer
• Lowers blood pressure
• Is antidiabetic
• Aids in weight loss
• Promotes heart health
• Is probiotic and prebiotic

While I also use honey as a sweetener in my tea or yogurt, it's important to know that not all honey is equally healthy for you...

Honey comes in more than 300 varieties. The various types can be categorized based on three things:

• Its texture (liquid, granulated, creamed, chunked, or comb honey)
• The level of processing (raw, unpasteurized, or pasteurized)
• Whether it's produced by bees that drink nectar from only one species of flower (unifloral) or from multiple flower species (multifloral)

Just like all other foods, the less your honey is processed, the better it is for you. Raw honey comes straight from the honeycombs in the hive. Once extracted, it's lightly filtered and jarred right away. Unlike unpasteurized and pasteurized varieties of honey, raw honey is not heated, so it still contains all of its nutritional components (i.e., vitamins and minerals). Unpasteurized honey is slightly heated during processing, so most of its nutrition stays intact.

Pasteurized honey, on the other hand, is exposed to high heat during processing. This gives the honey a smoother texture by destroying the naturally occurring yeast. However, it also destroys most of the nutritional components. This means pasteurized honey contains fewer antioxidants, amino acids, vitamins, minerals, and healthy enzymes than raw or unpasteurized honey. It also has less bee pollen and bee propolis, both of which help fight inflammation.

But here's the thing... Honey still causes blood-sugar spikes, just to a lesser extent than sugar. So do what I do... Enjoy honey in moderation while using it in place of table sugar. And skip the processed junk. Only buy raw, unprocessed local honey. You can also boost the flavor of your Greek yogurt by adding some fresh fruit – like blueberries – and unsalted mixed nuts and seeds.

What We're Reading... 

• Did you miss it? Bull markets don't die with a whimper.

• Something different: What led to the end of the Gilded Age?

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

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 20, 2024