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  • The Efficient Market Hypothesis, Fact Or Fiction? Part 4 [View article]
    I remember reading Bernstein's book, the The Four Pillars of Investing.
    There are always inefficiencies in the market. The reason most people do not outperform the market is that most do not have the conviction to take advantage of the inefficiencies when they occur. The do the opposite of the correct thing
    (they buy when prices are overvalued and sell when prices are undervalued)
    Apr 27, 2014. 12:55 AM | 2 Likes Like |Link to Comment
  • 30 And Under Portfolio: Q1 2014 Update [View article]
    I don't know too much about PBA, but I think the only time a single company should take that much of your portfolio is if
    1) you are an insider who knows everything about the company and its industry
    2) its a company with an insurmountable moat with a high margin of safety

    Obviously, the price increase in PBA made it become a higher percentage of your portfolio.
    Apr 27, 2014. 12:50 AM | Likes Like |Link to Comment
  • My Roommate Asked How To Start Investing - Here's What I Told Him [View article]
    Rather than telling him what to buy, perhaps you should teach him how to buy. Give a hungry man a fish and he'll go hungry again. Teach him how to fish and he'll never go hungry again.

    Read, read, read....
    Apr 26, 2014. 11:56 PM | 1 Like Like |Link to Comment
  • Despite FTC Investigation, Double-Digit Sales Growth Expected From Herbalife [View article]
    Only two questions that matter

    1) Where do the majority of HLF products eventually end up?
    2) Does HLF have several million non-distributor customers in the US who buy the product?
    Apr 26, 2014. 03:08 PM | 2 Likes Like |Link to Comment
  • Herbalife: Analyzing Through The Speculation [View article]
    The PwC thing was quite funny and bizarre.
    It was analagous to a plumber telling a surgeon how to do surgery.
    Apr 23, 2014. 12:53 PM | 2 Likes Like |Link to Comment
  • Herbalife: Analyzing Through The Speculation [View article]
    Hi Ken
    "Ackman isnt looking for hlf=0"
    I tend to agree with you. But here's the thing. He touted 0 loud and clear and sadly, some have blindly followed him. They could end up being bag holders.
    Apr 22, 2014. 09:53 AM | 1 Like Like |Link to Comment
  • Herbalife: Analyzing Through The Speculation [View article]
    Old Analyst,

    Those are good points. If I were a short who followed the bandwagon into this thing, I would be concerned.

    Meanwhile, as shares are getting transferred from weak longs to iron-grip hands that will not sell, the air in the room keeps getting thinner. This is magnified with every bad news. (Since HLF is approaching 60 again, I expect another bombshell.)
    Apr 21, 2014. 07:58 PM | 4 Likes Like |Link to Comment
  • Herbalife: Analyzing Through The Speculation [View article]
    Has anyone noticed the news on Nu Skin? They will be allowed to resume normal activities starting in May. So much for the pyramid allegation. I wonder what happens to HLF in China now?

    Its interesting to note that the rules in China are pretty strict about direct selling. They WILL shut you down. In fact, over a month period, the government shut down SIX HUNDRED pyramid schemes and made arrests in 14 provinces. So I wonder why HLF and a handful of other direct selling selling companies are still allowed to operate there when they have the strictest laws? Could it be HLF is not a pyramid?
    Apr 21, 2014. 07:23 PM | 9 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    "If yes why aren't they in stores across the country"
    You need to educate yourself on business.
    Why direct selling? Because you are completely bypassing the powerful retailers (Walmart, Costco etc). Do you know how difficult it can be to deal with these companies?

    Please don't give me anecdotal stories. You are dealing with a company that has many people involved. You are bound to deal with rogue distributors and angry people. Thats the law of size.
    Apr 21, 2014. 12:35 PM | 3 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    "All I have to support that statement is an absolute mountain of anectodal evidence from reading so many personal stories of loss due to participation in various MLM schemes"

    Please. Some MLM are pyramid schemes and eventually get shut down or collapse. Perhaps 50,000-60,000 have come and gone. Why is it that HLF is still around. Could it be that there is a genuine demand for products?
    Apr 21, 2014. 12:12 PM | 4 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    Its funny you mention Amway and Nutrilite.
    My parents, who are not distributors and are clearly end-users, have spent roughly $60,000 over a 15 year period on Amway products. This is despite the fact they are also Costco members.
    I asked why they would buy from Amway
    1)They like the products, yes, even more than Costco's. Not very scientific, but every person is different
    2)Their distributor delivers the products to their house.
    3) If they have any problems with the product, the distributor takes care of them.
    4) The great, personal service the distributor provides is very appreciated by my parents.

    The distributor, according to my parents, have other customers just like them.

    Now please tell me, what is supporting the company?
    Apr 21, 2014. 12:07 PM | 5 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]

    Herbalife had no visibility into that data. So they hired two firms, Lieberman and Nielsen. You've heard of Nielsen rating?

    Here are some other things that came out of the surveys.
    1)92% of consumers that purchased in a 3 month period were NON-DISTRIBUTORS (think about this very very carefully in conjuction with the number 8 million).
    2) 92% of people who purchase the product will likely repurchase in the future
    3) The earnings expectation for most of those who became distributors was nothing or very little. Remember, if you have a part-time job, ANY amount of money is gravy.

    Shorts have dismissed the surveys. But if you think about it, they provide very important clues.

    So the question becomes. Where do most of the products end up? In a landfill or in the stomachs of willing consumers. If we could radioactively label all the HLF products and track their ultimate destination, I'm pretty sure they will end up the bellies of end consumers based on the clues that we have.
    Apr 20, 2014. 09:11 PM | 2 Likes Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    The figure is from an article by Distressed Debt Analyst.

    BTW, you should check out
    By my last count, there were over 1300-1400 posts. Obviously its a small sample size. Do they look like people who are force feeding themselves or dumping HLF products. Or do they look like willing end users?

    7-8 million people in the US who are not part of HLF network have purchased over a 3 month period. So what's keeping HLF afloat?

    This is the bottom line, if you think the vast majority of products are being consumed by a willing end user, then shorts have a major problem on their hands.
    Apr 20, 2014. 05:03 PM | 3 Likes Like |Link to Comment
  • Invest, Don't Trade: Lessons From The Tax Collector [View article]
    Trading is like fishing. You need to catch something every few days or you will go hungry. There are some that can do it well. But most cannot.
    Investing, on the other hand, is like planting seeds. Eventually you have a tree which will produce fruit. You then reinvest the seeds to get more trees. After awhile, you are too busy collecting fruits because you have more than enough.
    Apr 20, 2014. 12:36 AM | 1 Like Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    "Its pretty simple really- they aren't returning the products due to pressure from the uplink"

    Then what is happening to all the products? Are they dumping them somewhere. Are they forcing themselves to eat it?

    Try hiding 139,000 tons of product a year. That would equate to filling up 15,000 garbage trucks.
    Apr 19, 2014. 09:14 PM | 3 Likes Like |Link to Comment