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  • The Pyramid Scheme Industry: Examining Some Legal And Economic Aspects Of Multi-Level Marketing [View article]
    "Meanwhile, approximately 54% of all commissions paid by these MLM firms go to the top 1% of distributors"

    Interestingly, these numbers are very similar to the wealth distribution in the US. The top 1% own 42% of financial wealth in the US. The bottom 80% of the population own 4.7%.
    Mar 18 01:44 AM | 4 Likes Like |Link to Comment
  • The Mystery Of Icahn And Herbalife's AGM Delay [View article]
    I talked to my parents (they typically purchase $2000 worth of items at a time which last them about 6 months. The cost is slightly higher than products in Costco. So why do they purchase these at a slightly higher price?
    - according to her, she likes Amway products more than Costco's
    -they've known this distrubitor for a long time and are happy with the service she has provided
    -they can call the distributor for any problems with the products
    -the distributor delivers these products directly to their home.

    Not everyone goes for the lowest price. Thats a fallacy in business. The service and context surrounding the product can be more compelling than price alone. If you understand business, this concept should be clear to you.

    So over the past 15 years, my parents have bought $60,000 worth of products.

    BTW. My mom said that this distributor has many other customers who buy regularly from her and they are not distributors.
    So $60,000 X many other customers = Revenue for Amway.
    Mar 17 09:30 PM | 5 Likes Like |Link to Comment
  • The Mystery Of Icahn And Herbalife's AGM Delay [View article]

    "why not just ditch MLM and stock it at a grocery or nutrition store?" The reason it is that they are completely bypassing retailers like Walmart etc. Retailers carry immense power over suppliers. The suppliers are often at their mercy.

    This is where the understanding of business is very important.
    Mar 15 04:04 PM | 6 Likes Like |Link to Comment
  • The Mystery Of Icahn And Herbalife's AGM Delay [View article]
    @G Hudson

    True story

    I visited my parents not too long ago. I noticed some personal home products, including vitamins, tissue paper , soap etc. They said they were bought from an Amway distributor. To my surprise, they have been regular purchasers of Amway products for the past 15 years, despite being Costco members. My mom swears by them. My parents would never even consider becoming distributors.

    The other day I noticed a young woman probably in her late 20's at work drinking an Herbalife drink from an Herbalife cup. Out of curiosity, I asked if she was a distributor. She thought about it, but didn't want to put in the time and effort. She is a discount buyer. She's been going to a nutrition club almost everyday for the past 4-5 years and even prefers it over Starbucks (no joke). When I asked her about other members at the club, she mentioned that there are core members, like her, who have been going there for several years. There are others who come for a few weeks to months, then stop coming…only to come back again at a later time when their weight starts to climb again. They had no desire to become distributors.

    That got me thinking…. I'm sure my parents are not the only regular purchasers of Amway products out there. I'm also sure the young lady is not the only regular consumer of Herbalife products.
    I tried to estimate the amount of money my parents spent on Amway products over the past 15 years and Im sure its a lot

    I've read somewhere that there are 50,000-60,000 MLMs that have come and gone. They have either been shut down or collapsed once they reached around $100 million. So what is so special about Amway and HLF that they still remain?
    Could it be that what's actually keeping them afloat are people like my parents and the young lady ….real consumers of real products. The money my parents and the young lady regular spend ultimately end up as profit for the companies. Some say these are commodity products. To some, they might appear to be a commodity, but to my parents and the young lady, they are not. To me an Evian water is a commodity. But apparently to others its not.

    Full disclosure: I am not a fan of MLMs in general but I don't think they're illegal.
    Mar 15 12:25 AM | 8 Likes Like |Link to Comment
  • Herbalife resumes trading [View news story]
    I too am disappointed that the price did not drop that much.
    Fear/panic is very good for long term investors.
    Mar 13 12:42 AM | Likes Like |Link to Comment
  • Why Herbalife Definitely, Surely, Assuredly, Certainly Will Not Be Trading At $67 When Q4 2014 Starts [View article]
    That was an EPIC article by TheSkeptic21.
    Feb 25 04:56 PM | 4 Likes Like |Link to Comment
  • A Confluence Of Events In The Continuing Herbalife Saga Are Signaling A Buy [View article]

    The short thesis was based on the assumption that HLF would be completely shut down. The chance of that happening is zero.

    I agree with you. I would not be surprised if the SEC was already investigating. A year ago, when this HLF thing broke out, Des Walsh mentioned that HLF approached the regulators and not the other way around and that he could not comment further. Very telling.
    Jan 30 04:53 PM | 2 Likes Like |Link to Comment
  • Herbalife Tragedy Unfolds: Act IV, Scene 3 [View article]
    Ambev, the smaller company based on market cap, bought out BUD the bigger company for a nice premium.
    Jan 30 01:34 AM | 1 Like Like |Link to Comment
  • Hempton: Markey a tool of Ackman [View news story]
    I would be very careful here. Perhaps the SEC has already been investigating for the past one year. About a year ago, Des Walsh said Herbalife approached the SEC and not the other way around and he could not comment further.
    Jan 29 11:16 PM | 1 Like Like |Link to Comment
  • Hempton: Markey a tool of Ackman [View news story]
    I wonder if the good senator knows the difference between MLM and MMA.
    Jan 29 02:48 PM | 1 Like Like |Link to Comment
  • Report: Herbalife targeted along with Nu Skin in China [View news story]
    Its never easy going against the herd. Thats the nature of contrarian investing. I dont mind taking shares from others at this price range or lower. The total return at tbe end of 3-5, perhaps 7-10 years will be substantial from this starting point, unless there is a buyout.
    Jan 26 12:59 PM | 1 Like Like |Link to Comment
  • Report: Herbalife targeted along with Nu Skin in China [View news story]
    This is good. This is very good for HLF. Fear, uncertainty, risk of total collapes, endless lawsuits and extreme pessimism are good thing for an investor. The longer the price stays depressed, the better it is. HLF is now in a buy zone.
    Jan 26 02:51 AM | 1 Like Like |Link to Comment
  • Netflix Has At Least 25% More Upside In 2014, What's Next For The Market [View article]

    I missed out on nflx. I bought it around 24 but quickly sold because of lack of a moat. Oh well.
    Jan 25 07:04 PM | Likes Like |Link to Comment
  • 1987 Vs. 2014: Should We Be Concerned About A Crash? [View article]
    A crash? Who knows. But to fuel future returns, I would wholeheartedly welcome a crash.
    Jan 25 06:59 PM | 1 Like Like |Link to Comment
  • Another Voice Behind MasterCard, Up 70% In A Year [View article]

    Stock splits dont change fundamentals, but for retail investors, its always psychologically easier to buy a share at 83 vs 830.
    MA has been a multi-multi bagger for my children and I.
    Jan 22 11:44 AM | Likes Like |Link to Comment