Seeking Alpha
View as an RSS Feed

Rogier van Vlissingen  

View Rogier van Vlissingen's Comments BY TICKER:
Latest  |  Highest rated
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    addedupon: well good luck with your NuSkin. I think it's past its prime, and you seem to forget this is not all about HLF, the two large energy MLMs that have class-action cum RICO suits pending may make a splash also. And there's always that great known unknown... China.
    May 22, 2015. 01:08 PM | Likes Like |Link to Comment
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    Murc229 see Jeff Lavin's response below. QED
    May 21, 2015. 02:05 PM | Likes Like |Link to Comment
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    paratron: Once you figure out the insanity of 99% loss rates, it should be pretty clear its time we move on. I've seen enough disaster stories in my community, and across the country. A single judicial error made the unrestrained growth of MLM possible, and it's time for a correction.
    May 21, 2015. 08:45 AM | Likes Like |Link to Comment
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    addedupon: I am mostly making a distinction between the economic facts on the ground, and the legal battles and attempts to regulate the industry.

    Cases like Amway '79 and the subsequent FTC policies make it very clear that the law is parallel reality, which does not always closely correspond to the world we live in...

    As an economic mechanism MLM/pyramid schemes are very similar to a Ponzi, but because of the different packaging, they usually take a much longer time to burn out - a phenomenon that I previously called the fractal nature of failure - widely dispersed and spread out in time. So Ponzi schemes fail spectacularly, whereas MLMs slowly bleed to death. The case for law enforcement intervention is the same in both cases - to limit the damage.
    May 20, 2015. 03:44 PM | 1 Like Like |Link to Comment
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    addedupon: My point is it IS a pyramid scheme, that is an economic fact. The extent to which that is ever legally pursued is only secondary. Law enforcement intervention at best mitigates the damages.
    May 20, 2015. 02:24 PM | 2 Likes Like |Link to Comment
  • Why Herbalife Is Like Chuck E. Cheese [View article]
    One of these days, you might hit and example that's simple enough so even the FTC understands it. For now, they are still busy with mind-numbing, 'fact-intensive inquiries' resulting from the self-created quagmire of the non-existent distinction between 'legitimate MLM' and 'illegal pyramid.'
    Herbalife will self-destruct with or whithout regulators. International action is more likely a threat. The US will do nothing, unless DOJ gets serious, or there is a congressional inquiry. FTC and FTCs protect the MLMs from the public by maintaining the pretense that they are legal. That was a voluntary re-definition of their legal purpose. DOJ could potentially create the legal precedent to force the agencies to enforce the law, but aside from that nothing will happen on the legal front. However, this is right now an $20 stock even if you discount the potential for law enforcement intervention to zero. Any meaningful resumption of growth is unlikely.
    May 20, 2015. 10:39 AM | 11 Likes Like |Link to Comment
  • Herbalife: Business Prospects Supporting Today's Valuation [View article]
    Eamon Collins: I am not calling Herbalife a pyramid scheme, from a pure economic perspective it is a pyramid scheme. The concept means nothing more than a business that prioritizes recruiting over retail sales, and all MLMs do that. If you follow the argument above, the FTC (and SEC) put themselves out of action with the meaningless distinction between 'legitimate MLM' and 'illegal pyramid.' My focus is more on the economic realities of why pyramid schemes are self-destructive. Whether or not the regulators ever figure out what they should have done is besides the point. They will probably show up late for the funeral as they did with Madoff.
    May 20, 2015. 09:25 AM | 5 Likes Like |Link to Comment
  • Dr. Herbalife Or How I Learned To Stop Worrying And Tried To Value It [View article]
    Hold on a minute... never mind FTC. DOJ is in the picture, and a few other things that have been reported. Before one engages in a detailed quantitative analysis of a stock, the political, legal, regulatory components must be considered, and a potential criminal investigation for issues that remain undefined, except that "an investigation by DOJ" has been acknowledged in the latest 10-K is extremely murky. Somewhere between hard and impossible to quantify.
    May 15, 2015. 10:04 AM | 1 Like Like |Link to Comment
  • Dr. Herbalife Or How I Learned To Stop Worrying And Tried To Value It [View article]
    Thanks for this very solid and factual approach. In fact all of the other issues could be approached similarly, with decision analysis. I suggested that the day after the Bostick hearing, and the model I used was 99% affirmation at $15mln, and 1% rejection at 1%, yielding a valuation that day of $16mln, and when the judge ruled yesterday, that valuation collapsed to $15 mln, which HLF had in fact already reserved for.
    All of the bigger political and legal, and criminal risks are capable of similar modeling, except the arguments over the assumptions would never end, so we'd be right back in the soup. But as an individual investor you could do the exercise. For my money, there is little hope for FTC action, for they're hoist on their own petard courtesy of their policy guidance ever since the Amway '79 ruling - even while they've won many pyramid cases in spite of it. DOJ is potentially quite another matter.
    May 15, 2015. 07:43 AM | 2 Likes Like |Link to Comment
  • Herbalife: Regulatory Capture And The Utter Irrelevance Of Law Enforcement And Regulation [View article]
    Wez: Interesting, so Loretta Lynch has something to prove now. Maybe she meant she would be even more lax on criminals than Holder, but it did not sound like that's what she meant in her hearings...
    May 12, 2015. 07:17 AM | 1 Like Like |Link to Comment
  • Herbalife: Regulatory Capture And The Utter Irrelevance Of Law Enforcement And Regulation [View article]
    HLF Friend, here is one way of looking at the decline of MLM: http://seekingalpha.co...

    (I actually inserted this link in the article now, in case someone else wonders about the same thing.
    May 9, 2015. 08:08 PM | 7 Likes Like |Link to Comment
  • The Shocking Truth About Share Buybacks [View article]
    Very helpful and logical. The fallacies in this area are generally based on an inversion of cause and effect. If indeed the share price is so low that repurchases were the best use of excess cash, they are value creating. The opposite case is where share repurchases are used in the illusory belief that it can raise the share price. Recent example: the Icahn led share repurchase at HLF, as a defense against the Pershing Square short.
    Judgment is not easy, for, if one were to be on the inside, one might think the Pershing Square position and even the ensuing investigations to be without merit and merely a temporary depressant of the share price. In which case the repurchase might be justifiable absent opportunities with higher returns. However, once the reasoning becomes a case of let's buy shares to fend off the barbarians, it becomes self-immolation, as it was in that case... All of which is the same as saying that good finance cannot make a bad project good, but can only make a good project better. Keeping cause and effect in proper order in the decision making logic is paramount.
    May 9, 2015. 11:24 AM | 1 Like Like |Link to Comment
  • Herbalife: Regulatory Capture And The Utter Irrelevance Of Law Enforcement And Regulation [View article]
    DrP79:
    Legislation is subject to change if it was misconceived, or the facts have simply changed.
    Law enforcement is subject to change depending on politics. At this stage, in spite of the fact that the FTC has shut down pyramid schemes from time to time, their policy of legitimizing money laundering as a legitimate business in the case of pyramid schemes has not served the country well.
    Administrative rule making by the FTC, such as the Amway '79 case, and their subsequent policies are all subject to change. There is now much more information in hand that was not available in '79. We now know that we have an industry with more than 500 companies domestically, with an abysmal track record of 99% loss rates for participants.
    Eventually the law will have to catch up and deal with the economic realities of the situation. The attempt to understand the underlying economics does not mean ignoring the law, but it recognizes that a pyramid scheme is an economic construct that is simple to understand, even if the jurisprudential history has sometimes sent mixed messages, and obfuscated the issues. Evidently, law enforcement and regulators have made their own task harder by focusing on dealing with the symptoms, not the cause.
    Presently the case histories of hundreds of MLMs that all operate the same way provide a far superior operating track record than was ever available before. It should also be noted that DOJ will have a different focus than FTC or SEC, or State AGs, while in the meantime Herbalife is in decline, but more than likely the entire industry is in terminal decline. It is only natural that people with a vested interest in the status-quo are defending it, but in the meantime new business models are developing, and as the MLM industry burns out the action will move on.
    May 9, 2015. 07:11 AM | 8 Likes Like |Link to Comment
  • Dear FTC: There's Never Been A Better Time To Deal With Herbalife [View article]
    For the banks this was about as much of a squeeze as they could manage politely without forcing the issue. Managing their exposure down as prudently as they could. Lord only knows what they really think...
    May 7, 2015. 10:50 AM | 6 Likes Like |Link to Comment
  • SolarCity Is My Favorite Idea That Everyone Knows, But That No One Understands [View article]
    User 39041516
    On the contrary, recently DOE and e.g. NYSERDA in NY have been pushing Solar thermal as a DHW solution, eg:
    http://1.usa.gov/1bxW7vE
    http://on.ny.gov/1bxW5Ee
    and here's sizzling hot solar hvac solution for properties 5,000 sqft/above:
    http://bit.ly/1bxW7vH

    there is a lot of new stuff coming to market. The logic supports thermal. Still seeing a lot of smart homeowners going to geothermal also, wiping out oil bills in the process.
    May 6, 2015. 10:50 AM | Likes Like |Link to Comment
COMMENTS STATS
1,262 Comments
2,965 Likes