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  • 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
  • Herbalife: Time To Look At The Long Side Again [View article]
    Direct Selling Association?

    Isnt that the organization that self regulates the industry.

    "The shorts seem to believe all multi-marketing business must be frauds or pyramid schemes. I'd urge them to consult the company's website, the Direct Sellers Association and other public sources to see that they are mistaken. Many well known companies employ multi-level marketing, for example, Amway, Tupperware and Primerica.MLM businesses are legitimate. Anyone interested in the topic can start visiting the web sites of the Direct Selling Association....Click through the members diretory and you'll see familiar names like Amway, Avon, Fuller Brush, Kirby Vacuums. According to the DSA, the company (Prepaid Legal) has been a long time member and in good standing"
    Bill Ackman's Gotham Fund wrote these words when they were long Prepaid Legal, an MLM company which was getting attacked by shorts.
    BTW. Buffett owns Pampered Chef and Kirby Vacuums which are members of Direct Selling Association. Herbalife is also a member of DSA.
    Apr 18, 2014. 03:27 PM | 3 Likes Like |Link to Comment
  • 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, 2014. 06:09 PM | 1 Like Like |Link to Comment
  • Herbalife: Time To Look At The Long Side Again [View article]
    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, 2014. 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, 2014. 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, 2014. 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 need all three to create a mega company.
    Mar 28, 2014. 06:15 PM | Likes Like |Link to Comment
  • Is Herbalife A Pyramid Scheme? A Simple Question Of Law [View article]

    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, 2014. 02:02 PM | 1 Like Like |Link to Comment