Ackman's Herbalife Thesis: Individual From The Authorities Volition Attention Piteous People In Addition To Billionaire Hedge Fund Managers...

I was just on CNBC talking most Herbalife. Nervous every bit they come upward as well as was propped the incorrect mode past times the audio guy (and thence never looked at Herb Greenberg who interviewed me).

But hither is the quick summary.

I agreed alongside Bill Ackman that Herbalife is generally most ripping off distributors as well as people at the terminate of the chain. The production is to a greater extent than than twice every bit expensive every bit challenger shakes. I called Herbalife "scumbags".

But they are highly cash menses positive scumbags as well as they volition piece of occupation the cash menses to purchase dorsum shares. Over the past times 5 years the portion count has gone from 140 meg to 108 meg as well as volition autumn further.

They are scumbags as well as so - but they are scumbags working for stock marketplace investors.

That I pointed out was similar to tobacco companies. Tobacco companies kill 5 meg people globally per twelvemonth - 400 grand of them inwards the USA. Is anyone stupid plenty to mean value the authorities would unopen them? That has been a bad brusk thesis for decades!

Bill Ackman is shorting a profitable companionship - as well as his declaration is that they run an illegal pyramid scheme. By implication his declaration that the authorities is going to somehow unopen them down.

That is a actually really awful brusk thesis - the brusk thesis that Government is going to come upward as well as aid piteous people as well as a billionaire hedge fund manager! Normally neither grouping is high on the agenda!

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I said that I had reported many frauds to the SEC. Sometimes the SEC acted. Mostly it did not. When it acted it was oftentimes afterward the stock had gone to zero.

If my thesis was the authorities was going to aid me as well as so I got it wrong!

Bill Ackman has that i wrong!

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I did non solid reason other of import parts of the argument.

(a). Being incorrect on crowded shorts is real unsafe indeed. Herbalife is a crowded brusk - the brusk is notwithstanding generally i mortal - Bill Ackman - who has a massive position.

(b). The nutrition clubs accept unopen to merit. I i time shared household alongside a lesbian Avon lady. She sold a duet of hundred grand dollars worth of make-up a year. Her shtick was simple. She visited women stuck inwards outer-suburbia - the solid reason of the iii hours of daily commute. Their husbands were away from them for eleven hours a twenty-four hours as well as they were real stuck. She would play alongside them - putting makeup on them similar fourteen twelvemonth sometime girls seat makeup on each other. She would say them they were beautiful as well as endure supportive. This was multi-level marketing every bit decentralized back upward machinery as well as it worked.

The nutrition clubs are similar that. Fat men plough upward as well as portion a milk shiver alongside other fatty men as well as back upward each other to lose weight. It is split upward of a Hispanic obese person's version of alcoholics anonymous. Mostly Hispanic anyway - every bit it started inwards the Hispanic community. Guys plough upward as well as they say something similar "My elevate is Jose as well as I am fat". It works.

The Manhattan version of back upward for weight loss is a highly priced gymnasium alongside a personal trainer to force you lot to take the pounds. But it is blindingly arrogant to believe that that is the alone valid split upward of back upward grouping for weight loss.

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I likewise did non say what I mean value Herbalife's strategy should be. They are going to offering a defence. I mean value it should endure bland - exactly a declaration of profits as well as perhaps the merit of the system.

Anything to let Herbalife to purchase dorsum to a greater extent than stock. Herbalife has a lot of capacity to purchase dorsum stock every bit it is real cash menses positive. The to a greater extent than stock they purchase dorsum the ameliorate for remaining shareholders.

I mightiness current of air upward a remaining shareholder. So I promise they purchase a huge quantity of stock dorsum - as well as the easiest mode to practise that is to practise that when the stock is inexpensive - that is correct now.

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As per green on this weblog I could endure wrong. The authorities mightiness exactly induce upward one's heed to aid a billionaire hedge fund director out as well as relieve Bill Ackman from his oversized position.

That notwithstanding is something I am willing to bet against.




John