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The Mighty Wart

The Mighty Wart
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  • Australia repeals carbon tax, BHP says move will help competitiveness [View news story]
    By taxing polluters you are effectively taxing economic agents. These are entities that keep the world moving.

    It’s impossible to generate growth without polluting as we rely so much on fossil fuels. It’s impossible to fulfil all current human needs without polluting. Every economic activity has at the bottom of the chain few hundred barrels of oil.

    So the challenge here is to discriminate between standalone polluters and producers. This is very difficult I’m afraid and not always straight forward.

    A carbon tax will only generate inflation while doing very little to reduce pollution. It will have to be implemented world-wide as individual countries will not shot in their foot themselves and put them in a disadvantage when compared to other more lax countries. This is a gargantuan task. To really do something about it a new economic system must be brought forward, otherwise this is all futile.

    A new economic system can be implemented locally so it doesn’t have to rely on World consensus. Not only that but it’s more sustainable than taxing an economic activity. Taxing is a wealth transfer from one agent to normally a government. A new economic system will create wealth and not just simply transferring it. Tackling pollution is not a matter of transferring wealth from polluters to non-polluters. Tackling pollution is about producing things in a different way or producing different things all together and the economic activities that sustain this.
    Jul 17, 2014. 10:57 AM | 1 Like Like |Link to Comment
  • Apple: Soon A Member Of The $1,000 Club? [View article]
    Apple is dead
    Jan 28, 2014. 08:17 AM | 2 Likes Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    Shorts are arguing that the market is saturated GIVEN the nature of their business model. They are thinking in terms of filling a building with water not filling an ocean with water. Big difference. A pyramid can only grow up to a level so I can’t see here room for growth tbh.
    Dec 20, 2013. 11:05 AM | Likes Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    just2look: Can’t see any contradiction here. I narrowed it down to friends, family and colleagues. As I said in a post earlier the closest I have been to HLF is via acquaintances. Like the friend of a neighbor I might have met twice in a bbq and that wanted to organize one of HLF’s communal (cult) presentations. Indecently all these acquaintances are not consumers out of the network, absolutely none of them. They were all in the process of becoming “millionaires”, sorry supervisors.

    It would be interesting to know your views. Do you know of anyone, not being related to HLF in any shape or form now or in the past, saying something like “well honey when we get back home remind me to but some HLF products from Amazon. I just love them and we are running out”. I just can’t visualize it. It simply doesn’t happen or not to the level to justify this valuation (around 15% more than Avon).

    And please don’t take me wrong: I don’t think it doesn’t happen because of the quality of their products. I could believe they are very good. It doesn’t happen because that’s not their business model. The incentives are not there.
    Dec 20, 2013. 10:55 AM | 1 Like Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    Some people argue here that it cannot be a pyramid scheme because the share price keeps going up. That’s really scientific.

    HLF IS a pyramid scheme. At least in the way it operates in the US and LATAM. This article goes in great detail to offer some hard evidence supporting this.

    This doesn’t mean that Ackman might ever profit from his bet. Neither it means that the share cannot still go up and up. On this aspect I disagree with the article. It took 30 years to catch Madoff and hadn’t be a financial crisis he probably would be still in business.

    Markets don’t have to be right. They can be wrong for a long, long time.

    I just realized that HLF is worth more than Avon. I don’t know their respective margins but I know both are consumer goods company. If I look around, in my family, colleagues, and friends I can see some usage of Avon, nor massive but some usage. I see none for HLF. Literally zero. People get to know HLF because their jump into their bandwagon of bogus prosperity and wealth.

    Where are HLF products to justify that valuation? I bet they are in the cupboards of millions of members. Those are the massive sales of that company. That’s the “growth”.
    Dec 20, 2013. 08:49 AM | 2 Likes Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    Dec 18, 2013. 09:32 AM | Likes Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    just2look: just wonder why HLF has been so reluctant to show their breakout of sales? I bet not even 10% of their sales happen outside their pyramid. That’s what I’m referring to; how HLF defines a sale?

    For me a sale would be something consumed inside their network (i.e.: needs a replacement) or sold outside. Pushing stock down and down (and thus expanding and expanding) is what a pyramid scheme is. If you aggregate all the stock in this network you will see it’s not a product that is selling like hot cakes. Obviously for HLF they couldn’t care less how much stock is accumulated downstream but that’s the point. For this model to work you need perpetual expansion not in terms of organic growth but just getting more people into the scheme. Hence the pyramid we are talking about.

    It’s really as simple as that.

    Plus bear in mind that these companies have a different model in Europe as they wouldn’t be able to operate otherwise. It is similar to that of Tupperware. So the fact that Belgium (a really insignificant country) cleared HLF is irrelevant for this discussion as the focus is on the US where this company does behave like pyramid. Let’s not mention LATAM.
    Dec 17, 2013. 04:45 AM | 1 Like Like |Link to Comment
  • Herbalife Grows Like Pinocchio's Nose [View article]
    Interesting to see the ad hominem and strawman logical fallacies on many of the posts here. Frankly, they all fail to address the real issue here which is proving that Herbalife IS NOT a pyramid scheme.

    Herbalife IS a pyramid scheme and I pretty much agree with everything this article says. I think it's a factual one. HLF is a company where stock is pushed down and down in the chain while money goes up and up and gets concentrated in the top of the pyramid. Simple as that. Surely some sales crystallise but the bottom line of this company is made, by and large, by nodes holding a huge amount of stock, hefty fees to become gods-know-what-bullshi... and expansion, this is mainly geographical expansion.

    Now this is one thing and a completely different one is whether the SEC will declare this company illegal and shut it down (I don't think this is possible btw. At best the SEC might stop it from being listed) or whether Ackman will remain solvent long enough for his bet to be proven right, etc.

    Still is not a business model I would put a cent on it. I don't think it's ethical either but hey that's me. In terms of shorting it, it's tricky given the old fat arses supporting the stock starting with Soros and finishing with Icahn.

    Btw if their products are so amazing and I'm a big consumer of replacement meals, vitamins, herbal supplements, etc, etc why I have never come across one of HLF products? Why the closest I have been to the company and indirectly to their products was when an acquaintance organised a presentation to show me how can I become "financially independent" and "master of my own destiny"?

    Why any videos in You Tube, specially those devoted to the LATAM market, are ALL about how to become rich and this and that and not a single second about the benefits of HLF products?

    What are the incentives of HLF?

    Just questions and no answers but I know that "by their fruit you will recognize them..."
    Dec 16, 2013. 11:42 AM | 2 Likes Like |Link to Comment
  • Repsol, PDVSA discuss $1.2B funding for Venezuela venture [View news story]
    As in Argentina what a great deal for Chevron!!
    Oct 22, 2013. 07:18 AM | Likes Like |Link to Comment
  • Goldman Sachs joins the list of firms raving about Starbucks' (SBUX +7.3%) FQ3 results and sees major catalysts setting up for the company. The investment firm thinks Starbucks is only in the early stages of international expansion and that it's expanded food channel initiatives will drive growth. (Previous on SBUX: earnings, recap, CC[View news story]
    Well you don't need to be GS really to see the huge potential of this company. Only their tax dodging capabilities represent an enormous source of revenue. No news here.
    Jul 26, 2013. 10:52 AM | Likes Like |Link to Comment
  • The latest round of price cuts on electric vehicles won't affect demand for Tesla Motors (TSLA +0.9%), according to industry watchers. They note that the Model S deserves a premium after blowing away the competition in road tests from hardened reviewers and it's vying for sales from BMW and Mercedes owners more than buyers looking at Volts and Leafs. [View news story]
    Very arrogant analysis. Obviously in the US you don’t get Top Gear otherwise the “industry watchers” will have a different opinion based on the episode they tried one of them.
    Jul 12, 2013. 10:45 AM | Likes Like |Link to Comment
  • The NYT examination of how China is reaping the biggest energy benefits from post-war Iraq angers some, but China’s terms of engagement with Iraq are familiar in African countries: They gather the resources quickly, efficiently and to the benefit of themselves and the governments of the host country. Chinese companies are willing to take Iraq's terms, which are often rejected by big Western oil companies. [View news story]
    "They gather the resources quickly, efficiently and to the benefit of themselves and the governments of the host country"

    Not sure what would be the difference between this and the Western oil companies tbh. The only real difference is that the chinese are willing to take a hard bargain. That sounds fair play to me.
    Jun 4, 2013. 12:53 PM | Likes Like |Link to Comment
  • YPF CEO Miguel Galuccio tells FT the company is close to an agreement with Chevron (CVX -0.4%) to get around the asset freeze that has thrown into question plans to jointly develop the giant Vaca Muerta shale formation. A successful deal would be a boost to CVX in Latin America, where it has been hit with a $19B environmental damages bill in Ecuador, and to Argentina’s hopes of developing its shale resources. [View news story]
    I don't have a problem with oil companies, where did I say that? I do have a problem with companies not paying what they owe specially after a court dictated it. Whether they are oil, etc is irrelevant.

    Btw I don't mind walking.
    May 14, 2013. 09:29 AM | Likes Like |Link to Comment
  • Coca-Cola (KO +0.5%) plans to increase its investment in Indonesia with the growth potential in the nation very promising. The company sees spending $700M on capital plans and marketing over the next three years. [View news story]
    And the health bill of this “promising market” goes for the Indonesians. That’s the best part.
    Apr 4, 2013. 01:00 PM | Likes Like |Link to Comment
  • "When private equity works, it really works," says Stephen Schwarzman on the Blackstone (BX +7.2%) earnings call. Indeed. Once high-water marks are hit, carried interest goes right to the bottom line ... and they're getting hit. For Q4, RCI in P-E was $45.5M vs. -$28.4M a year ago, in Real Estate, $91.1M vs. $3.5M, in Hedge-fund solutions, $76.3M vs. $4.1M. [View news story]
    And being massively leveraged
    And set up the SPVs in tax-haven jurisdictions
    And streamline all processes so there is a very small team managing the portfolio of assets and thus the fortunes and lives of thousands. So the operational costs are pretty much the hedges you need to put in place to protect your fat bonuses if you get them in a non-USD currency.
    And having a presidential ex-candidate formed in the industry thinking that he is very clever because he made a fortune in an industry with this dynamic. Well, with the latter it could have worked even better had he won.
    Jan 31, 2013. 11:52 AM | 1 Like Like |Link to Comment