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poortorich

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  • Herbalife: Time To Look At The Long Side Again [View article]
    Its funny you mention Buffett. Good money is made when there is fear, not when there is exhuberance. I dont know too many people who want to own hlf right now. Even the most battle tested longs are probably having second thoughts ....hmmm sounds like buy to me.
    Apr 17 06:09 PM | 1 Like Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    Markthomas
    Its clear you need to catch up on hlf. You can start by reading many of the past articles and comments. FYI Some of the articles by two authors are very redundant.
    Apr 17 06:03 PM | 3 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    HLF. What a bizarre saga.
    So i thought more thought HLF today and here are some things that came to my mind.

    1) HLF sells 130,000 tons of products annually. That equates to around 790,000 POUNDS of products a day. Where does it end up? That's a lot of powder to hide.

    2) There are roughly 7 MILLION customers in the US who bought HLF products in a three month period. These are not distributors. These are customers who are NOT in the HLF network. That got me thinking. If each customer bought say $30-40 over a 3 month period, how much money is that? Clearly there is high demand for HLF products from consumers. So whats keeping HLF afloat? Is it the product?

    3) People who go on HLF do seem to lose weight. Whether or not it is superior to other products is unclear, but for many, HLF has helped them lose anywhere from a few to many pounds. Not every approach is right for everyone. Some can do it all on their own by going to GNC etc. Others may need special hand holding, which is what HLF provides. The benefit of losing 5-50 pounds has an enormous positive impact on society. Less medical costs, higher productivity and better sense of well being. I would venture to guess that if they did a study on the positive financial impact of its customers losing weight, the net monetary gain for society would be substantial

    4) With these things in mind, I still think the idea of the government COMPLETELY shutting down HLF is a pipe dream. It may take the FTC many months to do its work but in the end, the outcome seems pretty clear to me. In the meantime, the oxygen is slowly getting sucked out of the room without the people hardly noticing it. I see the share price of HLF going to 100-200+ over a 3-5 year period. Who cares about the daily wide price swings when its pretty clear the stock is headed up. If one can stomach the daily price changes, I think HLF will be a very good investment.
    Apr 17 12:57 PM | 4 Likes Like |Link to Comment
  • Is Herbalife A Pyramid Scheme? A Simple Question Of Law [View article]
    Slavery? Bit of a stretch no?

    This got me thinking about various industries and what impact they have on society in general

    Tobacco industry-the financial impact on society is enormous. Lung cancer, lung diseases, emphysema, oral cancer, heart disease, stroke, high blood pressure.

    Alcohol-liver cancer, liver failure, oral cancer. Motor vehicle accidents, loss in wages. Divorce, broken families.

    Gambling-broken families, lost wages, could lead to crime etc

    Soft drink/candy industry- very insidious advertising targeting young kids. Very big cause of obesity. The financial impact of obesity on society is enormous. Diabetes, high blood pressure, various cancers, heart attacks, strokes. Did you ever wonder why your medical insurance premium is going up?
    Obesity is a big problem in the US right now.

    Now lets take a look at HLF. Whether you think its a pyramid or not, by most accounts, people who use HLF products do seem to lose weight. Perhaps its the product, perhaps its the hand holding or perhaps its both. How much would losing 10-20+ pounds and keeping it off save society in health care expenditure?

    I'm not advocating we should start regulating industries more. But if you want to really help society, please keep things in perspective and start fixing the real problems.
    And please do not bring up slavery which truly was an evil that needed to be eradicated.
    Mar 29 01:45 AM | 5 Likes Like |Link to Comment
  • The Richest Man In History Reveals His Simple Wealth Generating Secret [View article]
    For every Gates, im sure there were hundreds maybe even thousands of others who failed even though tbey were smarter. Timing, luck and intelligence...you need all three to create a mega company.
    Mar 28 06:15 PM | Likes Like |Link to Comment
  • Is Herbalife A Pyramid Scheme? A Simple Question Of Law [View article]
    DJ

    I think you are right. Many who comment here probably have never ran a business or have very little understanding of how business works in real life. Getting an MBA is not a substitute for real life experience. Im not talking about just working for someone on a salary. I am talking about actually building and managing a business. Just reading about it is not enough.

    Assuming all consumers buy based on price alone is downright dumb.

    I would venture to say that those who have succeeded in building their businesses in Amway, HLF etc would probably succeed again if they had to start from scratch.
    Mar 27 02:02 PM | 1 Like Like |Link to Comment
  • The Richest Man In History Reveals His Simple Wealth Generating Secret [View article]
    For people Gates, Sergy etc who started businesses, there was a very narrow window of opportunity for them to have mega success.

    In the case of investors like Buffett, the window of opportunity is always open.
    Mar 27 01:37 PM | 1 Like Like |Link to Comment
  • The Richest Man In History Reveals His Simple Wealth Generating Secret [View article]
    Rockefeller happened to be at the right place at the right time. Of course, he was a legend in the art of frugality.

    If he was alive right now and started with nothing, I doubt he would become the world's richest man. The same goes for Gates, Sergy, Bezo, Jobs etc.

    Now if you are talking about Buffett or Carlos Slim, Im certain they could still become billionaires or close to it if they started from scratch today.
    Mar 27 11:44 AM | 3 Likes Like |Link to Comment
  • Letter To John Hempton From A 'Clueless Short Seller' [View article]
    peter

    so i guess what you are asking is why would a consumer would buy at a higher price when he can get even a bigger discount from an upline person.

    consumers do not make a choice to buy based on price alone. perhaps the consumer was introduced to a product by a distributor who provided good service and results. in which case he/she might not mind paying a bit more.

    consumers do funny things like
    -paying more for a pair of old of jeans with holes in it.
    -paying more for branded cereal even though the manufacturer is the same
    -paying a premium for water when its essentially free

    excuse my lack of cap. my computer is not working well.
    Mar 26 07:27 PM | Likes Like |Link to Comment
  • Is Herbalife A Pyramid Scheme? A Simple Question Of Law [View article]
    Reel

    Sometimes we make investing more complicated than it really is. Seems like a dumb question but the answer solves the riddle that is plaguing the shorts and uninformed. Keep it simple. Read my previous post.
    Mar 26 03:34 PM | 3 Likes Like |Link to Comment
  • Letter To John Hempton From A 'Clueless Short Seller' [View article]
    Peter

    Seems complicated but when you consider the following, it is so easy to understand hlf. You do not need hundreds of slides. Where does the vast majority of the product end up? Here are some clues.
    1) 70 percent of hlf distributors are only in it for a discount with no intent to sell. In other words, they plan to consume the product. This is confirmed by both Lieberman and Nielsen survey companies.
    2) About 7 million people buy hlf products. Keep in mind, these are not part of the hlf network. This again, is from Lieberman and Nielsen.

    This tells me that it is company driven by product demand. If recruiting stopped, I doubt it would collapse. Sure the growth might slow but to suggest that the company would collapse is comical. The 7 million or so customers would still be consuming/buyingthe product.

    So back to the original critical question. Where does the vast majority of hlf product end up?
    Answer. To me its clear... In the stomach of a willing consumer.

    You dont need Ackman or Hlf's information to make a very logical/rational investmentl decision here. Quite simple actually.
    Mar 25 02:57 PM | 13 Likes Like |Link to Comment
  • Herbalife - The Fractal Nature Of Failure [View article]


    Frankly, I think the FTC looking into HLF is a good thing. There will be more clarity and in fact, will dissuade any unscrupoulous behind the scenes shananigans on both sides.
    I am not a fan of MLM in general. But there must be a reason why HLF is still around when one considers many thousands have come and gone, either because they were shut down or because they collapsed.

    Lieberman and Nielsen in particular are companies we rely on for accurate data. Nielsen is a company with 35,000 employees. Its hard to ignore their findings. HLF has about 500,000 distributors and according to these research firms, more than 70% are in it for the discount only. Furthermore, only 4% are in it for full time income. The remaining % expect to make part-time income only. So any money, is a bonus. The most striking numbers, in my mind, were 3.3% of the general populaton or about 7.9 million people (keep in mind there are roughly 500,000 distributors) actually bought Herbalife products over a three month period. I don't trust HLF completely but I do trust Nielsen. You can spin this any way you want and ask "but I've never seen an HLF customer", but 7.9 million is still 7.9 million.

    Which begs the question. What is keeping HLF afloat? The churn in distributors who supposedly fail or the steady purchasing by the millions of repeat customers who are not even part of the network. The 7.9 million is a number that is very hard to ignore and its something to think about if you're in the camp demanding receipt of retail sales.
    That got me thinking about my mom again. My mom has spent roughly $60,000 worth of products from Amway over the past 15 years and she certainly has done her part in keeping Amway afloat.

    Fear is good.
    Mar 22 02:17 AM | 2 Likes Like |Link to Comment
  • The Pyramid Scheme Industry: Examining Some Legal And Economic Aspects Of Multi-Level Marketing [View article]
    Oops. In a hurry here.
    40% of distributors make money, not 82% based on the numbers. Thats my final answer.
    Mar 18 01:46 PM | 3 Likes Like |Link to Comment
  • The Pyramid Scheme Industry: Examining Some Legal And Economic Aspects Of Multi-Level Marketing [View article]
    Looking at the data again, the % of distributors who actually made some money was 82%, not 13%. Sorry for the confusion.
    To get a perspective on this, the franchise with lowest success rate in America was Wings N Things with a success rate of 6%. The initial start up cost is $215,000. HLF's startup cost, to my knowledge, is much lower.

    The compensation break down is very similiar to any big corporation in America.


    One more thing that should be pointed out. We are talking about in, many cases, a part time job.
    Mar 18 01:29 PM | 3 Likes Like |Link to Comment
  • The Pyramid Scheme Industry: Examining Some Legal And Economic Aspects Of Multi-Level Marketing [View article]
    hat

    You are making assumptions that are not true
    1) Every distributor is in to make money. Not every 500,000 people are in it for the business opportunity. In fact over 70% are in it to get a discount only
    2HLF is a full time job for every distributor. Not true. Many are in in part time or for supplemental income only.

    If you take these into account by my calculation 13% of distributors make some form of money.
    Mar 18 12:14 PM | 3 Likes Like |Link to Comment
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