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I recommend reading Bronte Capital's take on this. He regularly evaluates short opportunities mostly related to fraud. He actually visited Herbalife clubs befo
by kurthr 9y ago
I recommend reading Bronte Capital's take on this. He regularly evaluates short opportunities mostly related to fraud.
He actually visited Herbalife clubs before making a decision on shorting. He's not a fan of Ackerman.
https://brontecapital.blogspot.com/search?q=herbalife https://brontecapital.blogspot.com/search?q=herbalife
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- CrackpotGonzo 9y agoWow, thank you for sharing this. It was an illimunitaing read and made change my opinion on Herbalife. Comparing it to AA makes a lot of sense.
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- evrydayhustling 9y agoTerrific read, thanks for introducing me. Great example of how dangerous it is to think something is popular because others are more stupid or gullible than yourself. Keep looking until you see what they see, whether you end up agreeing or not.
- spamizbad 9y agoThe fact that these herbalife clubs cannot be sustained ultimately seems to prove Ackerman's point. Just google around for Herbalife shops in Queens today, it doesn't seem like any of them have survived.
- gowld 9y agoIt depends on whether there is equilibrium. If someone founds a club and breaks even for a while while losing weight until they meet their goal, then someone new does the time, the cycle can perpetuate until the rate of newly overweight people drops.
- dpark 9y agoThe continued existence of Herbalife doesn’t depend on whether anyone actually loses weight. Only on whether people continue to buy their product.
- twosville 9y agothe kill shot: "What this has (deservedly) become is the story about how Bill Ackman can be so wrong. He spent (by his own admission) a year and a half analysing this company and his thesis can be falsified by visiting a few clubs in his home city. Bill Ackman's thesis is the most easily falsified bear-thesis I have seen from a major hedge fund ever. You have to wonder how this happened. So I am going to tell you: Bill Ackman a Harvard educated (magna cum laude) billionaire New York hedge fund manager bet over a billion dollars on a short position (imperilling his fund and his reputation) without checking the facts. And he did not check the facts because he was so rigid with a misplaced silver spoon that he could not stoop to sit on a subway for thirty minutes and talk with poor people for ninety minutes."
- paganel 9y ago> with a misplaced silver spoon that he could not stoop to sit on a subway for thirty minutes and talk with poor people for ninety minutes." I'm not an Ivy League alumni by any means (I'm a last-year CS drop-out from an Eastern-European country), but I got to see a Herbalife presentation in person 10 years ago and realized it was a scam 10 minutes into said presentation. As a matter of fact, I had a intense verbal fight with my ex-wife and my ex-MIL immediately after the presentation, as I was trying to explain to them that the money they had just spent on those Herbalife products was money thrown out of the window and that there were other ways to lose weight. I was right, those Herbalife products stood on top of one of our drawers for half a year, touched only once or twice, after which we threw them away. The gist was that we should have brought more of our acquaintances and friends into the scheme, but my ex-wife was a smart enough woman to realize that that was a no-go. Long story short: companies like Herbalife deserve to die. They feed on people's insecurities, more than that, those people which Herbalife feeds on are not very well-off, quite the contrary (the money we spent on their products that one time was money taken from other necessity purchases). They're a despicable company, I'm genuinely let-down that Ackman failed.
- bantunes 9y agoHow is Ackman's reputation not tainted by Valeant at this stage? This is just more of the same for me: a not really objective investor making mistakes due to his skewed perspective.
- Kurtz79 9y agoGreat read. I remember seeing plenty of Herbalife leaflets posted on the street when I was younger, and I always thought it was a scam and something exploitative (which in a way it is). This helps putting things into context.