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Bill Ackman's "Seven Hallmarks Of A Pyramid Scheme" Herbalife Takedown
We are used to hedge fund managers blindly making up "facts" to hide the reality that nothing else matters (most definitely not fundamentals) except the Fed's balance sheet (in order to defend his 2-and-20 sapping performance). So it is ironic that Pershing Square's Bill Ackman has added to his previous 342-slide PowerPoint presentation with the following 61 pages of his reality in the hope that market technicals (i.e. the weight of activist longs and shrinking float) and momentum will give way to his view that 'these' Herbalife's fundamentals will eventually win. Good luck with that...
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Yes, we know it is a pyramid scheme.
Thanks for reminding us that you can be right and still lose your ass.
Medicine Show
Covered wagon medicine show
Take you to the place where the healing flows
Weak in spirit we got the juice
won't save your soul it'll shine your shoes
Treated king to kangaroo
Santa Fe to Timbuktu
Don't be fooled by imitation
This is the stuff that cured a nation
We took the tube and the high plains too
Never stopped long just passing through
A drop of the laughter of the maids of France
Makes a hopeless cripple dance
It was really vile weather
When we got to tarred and feathered
You could hear the six guns sound
As they chased us out of town
In India we're all the rave
Discovered that its great as aftershave
Dropped in the sea just off Japan
Swapped 20 bottles for an aqua-walkman
Immunity from ridicule
Improves your brains if you're a fool
And I read in the Middle East
They traded some for a hostage release
Now if you're bald it'll give you hair
If you got straight trousers it'll give you flares
Feeling up you'll get depressed
Out of style here's a brand new dress
It was really vile weather
When we got to tarred and feathered
You could hear the six guns sound
As they chased us out of town
The stuff we sell is just the best
Passing all consumer test
Days of heaven nights of sin
Voodoo stick and sharks fin
When all around you seems like hell
Just one sip will make you well
Multipurpose in a jar
If you ain't ill it'll fix your car
In days of yore for all bad feelings
Washing socks and stripping ceilings
Nowadays its used medicinally
For all known human malady
It was really vile weather
When we got to tarred and feathered
You could hear the six guns sound
As they chased us out of town
Guaranteed don't you know
Money back?
You'll get a no!
It's the one and only medicine show
"You cant taper a Ponzi!" - Max Keiser
1 word. Avon.
Want a second word? Estee Lauder.
Is HLF predatory ? Hell yes. But then again so was Johnson & Johnson with baby formulas in the 1940's overseas to non-english speaking new mothers. So was Ackman's fathers predatory rent schemes in the 1970's in the City. But to Billy those are far different reflections than his thesis. You can not regulate something as a market agent. That is the job of the Government. If you don't like that, being a shareholder activist does not mean being a market vigilante.
Bill's thesis depends 100% on Obama getting involved in shutting down an EMPLOYMENT scheme. Who cares if they are sucking savings out of SME's of S.Latin or Asian origin. They add to the jobs number and because they provide jobs to his LATINO voting demographic, it will continue.
The same thing happened with Charles Ponzi's scheme and the core base of which was poor Jewish, Slavic and Irish (no idea why the Irish follow Ukranians into dumb ideas, but whatever... everyone needs a wingman!) fincially illiterate immigrants. It was all fun and games and a progressive growth scheme for the 1900-1929 ramp. Until it wasnt. It was only when the Irish started to riot that the feds went after Ponzi. This was years before the FBI even gave a shit about local white collar crime, they were too fixiated on fighting 'foreign interests' aka. Communist terrorists. Sound familiar to anyone ?
Only way Ackman will be vindicated is
1. Bill can RICO the whole latino operations and get middle level guys to admit to a fraud.
2. Bill gets HLF's cash flows reviewed for European money laundering operations.
3. Bill sweats it out until tapering and all those ZIRP storefronts suddenly start rubberbanding into the HLF balance sheet. Only problem is that HLF changed their subscriber membership policy in 2012 to prevent all sales final clause.
4. HLF goes tits up before it is LBO'd or is rolled into another larger CONsumer staples brand management company like P&G where its high penetration rate with Latino's (an underserviced group for brand names right now globally) and such the fraud is washed away into another variant of Consumers Club or Price Club. Only in the case of Price Club it was designed to target poor white-blue collar. Same same.
Bill is well aware of these points of view. What is tragic is he is so dead set on making HLF his hill to die on, he is willing to take down his rep, his Father's rep and half of his investors with him. It's like he learned Jack shit from Gotham Partners.
Comical the only country that was willing to hear is plea is Belgium. A country that has about 3 vol. on white collar fraud vs the USA Delaware 9 volumes.
Poor guy....desperately clinging to the old school notion that 'fundamentals' matter in the least anymore now that the FED is the only direct mover of equity and bond indexes...and losing millions.
indeed ... icahn can walk up to bernanke, borrow few more billions at zero interest and basically blow out all the shorts ...
Bingo. Stop the POMO. Bring back mark to market and dozens of companies would implode. The bears would quickly feast.
He's in two companies that require most, of what there is the least of, and that is jobs.
An H on the left cheek, and an A on the right cheek, with a broken clock behind..
When does Astroglide IPO again??
Icahn and Soros must hate Ackman tremendously, because he shows the whole world, that these "investors" do not even recognize an obvious pyramid scheme and even defend it - in the best case.
In the worse case, they are pushing pyramid schemes although knowing it...
And as the whole world knows: the lie fears nothing more than the truth. Poor Ackman, as a jew himself he should have known much better that speaking the truth is an unexcusable crime...
Man, Ackman just will not fucking quit. Where is Icahn's (pronounced I-CON) response?
Shit I was hoping to get a few folks off ZH to sign up with me so I could become a Diamond Platinum Zacoium Recruit Member.
Bill, you dumb-shit, you can lay that stuff up there all you want and it won't change a thing:
Those people are "employed". Who cares at what? As long as they count as employed, they're just fine by the Federal Government/BLS/BEA/NSA and a partidge in a pear tree. Nobody's shutting down HLF.
Go sell crazy somewhere else. I'm already full up here.
I would bet at least two wooden nickles that a large percentage of hlf "distributors" are collecting unemployment, unless of course they have exhausted their unemployment benefits, in which case they are now on disability.
Will there be outside the box "sales" ever realized from outside the balance sheet investors of any other similar too good to be true plans?
Hmmm...after the first 3 I was really wondering if this is about Obamacare rather than Herbalife.
sounds like a hedge fund pitch
I think we all know Herbalife will go down in flames one day. The issue is the old saw about the market remaining irrational for longer than someone can stay solvent -- in this case, Herbalife and keep the pyramid going and the stock up for longer than a short can hold.
On the bright side, when it goes under, I'm positive there will be prosecutions. They're so easy to do in pyramid schemes the gov't can resist.
Global Debt Crisis - The greatest private fraud of human history
Who are the great fraudsters who are becoming the murderers of the human kind?
How does the economy "illness" threaten Democracy and the freedom of people?
http://eamb-ydrohoos.blogspot.gr/2012/01/global-debt-crisis.html
..
Monetarism criminals should sit on the same benches that once sat Nazi criminals. Rothschild, Rockefeller, Greenspan, Bernanke, Trichet, Soros, Buffett –and other “kids” of the loan sharking- should not sleep calmly from this point on.
Authored by PANAGIOTIS TRAIANOU
I guess he'll short amway and avon next... Good luck. MLM is not illegal, and they very often are quite profitable for a long, long long long time.
There has never been a better time
to contact your
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Reg. $7.00
Sale $4.99
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Mysterious myrrh, precious woods & exotic spices
are accented with the intrigue of mandarin and bergamot.
5 oz. net wt.
Contains:
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WATER/EAU
GLYCERIN
PARFUM/FRAGRANCE
SODIUM CHLORIDE
TETRASODIUM EDTA
GREEN 3/CI 42053
RED 33/CI 17200
I think what everyone is going to get is this:
http://images.bidorbuy.co.za/user_images/274/322274_101117210031_penis_s...
Avon relies on movement of products, not just recruiting.
Ackerman short at $35/share, now ready to break out of the box between $60 and $70.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&instty...
Ackman's mistake is to bet on the saneness and rationality of the market. The markets want to rise and they aren't going to let anything stop them.
Yeah, HLF wants to rise, especially when Uncle Carl is buying in size, along with Uncle George S.
I still can't believe this asshat doesn't understand the basics of multi-level-marketing.
These business structures have been around for decades.
That alone should tell you something.
What exactly does he think is going to go wrong here?
MLM = Legal
Ackerman = Douchetard
Use fundamentals for trade ideas, but let the price action confirm. Why put on a short before the price starts falling? That's just bad trading.
Fundamentals do matter, even if they don't matter like they used to. Reggie Middleton's analysis of AAPL's margin compression was spot on, and AAPL stock collapsed irrespective of all the QE in the world.
I have to ask once again.. WTF IS HERBALIFE ????.....I have NEVER SEEN IT !!!!
/Serious
Herbalife operates out of a giant complex in Torrance, CA. They have multiple seven story office buildings and a campus larger than American Honda and Toyota.
Herbalife doesn't sell one product though retail distribution. They claim to be a health and wellness company, started by a criminal in the '80s selling an energy drink that turned out to be nothing more than Gatorade for $10 a bottle. They have always been a multi level marketing company, like Amway, signing up "distributors" to sell products to "members".
At some point in the '90s some VC guys bought in with a plan to take the MLM scam public. It actually fits Wall Street great since the entire stock market is nothing but a scam.
Herbalife has been caught selling plain salt water as a "Rejuvenating Tonic" for $35 a bottle. Some of their products contain dangerous levels of carcinogens and other chemicals because of loose control of their product supply. Herbalife doesn't manufacture any of their products, who even knows where they actually come from.
One fantastic thing about Herbalife is that 100% of their revenue is self reported. There is no way to figure out how much they actually sell.
I personally believe that Herbalife is nothing but a giant shell company for the Latin drug cartels to launder money in the US. The slimy snake iCahn probably knows this and that Herbalife is protected by high level Latino judges in the US legal system operating for the cartels.
You don't build a company the size of Herbalife out of nothing with some shitty tonics sold to gullible shlubs in LA.
i am starting investment fantasy team...my 1st 4 picks are ICAHN, SOROS,DRUCKENMILLER.and STIRITZ.....IN ORDER FOR YOU TO PLAY WITH ME YOU MUST CHOOSE ackman TO QUARTERBACK your team...HOW DO YOU LIKE MY CHANCES SO FAR.
He's in too deep. I've been there before with of course much less money... and my calls were RIGHT. the problem? it tied up capital and made it unproductive for a long time. Seems this might be a bad strategy for the moment. .... but really, all it takes is a general market sell off and depending on where he started at.. he may end up just fine, and possibly in not that long of a time... but probably not this year anyway. The market is itching for a sell off regardless .. even if its not anywhere near the "big one" (if that ever comes at all before a currency collapse)
What's wrong with pyramids as an evolutionary process of free will. The pharoah did not conscript them or their tribe. Ackman has shown what it is, but how many other types of domination of the weak-minded will he next visit?
"The pharoah did not conscript them or their tribe" - someone needs a refresher on their bible studies...
Cat fight?
pyramid? sound like ARME to me.
Sounds a lot like the global warming agenda.
Seriously, I think the global dietary health supplement market is bigger and more profitable than the military industrial complex.
Sounds like Billy is learning about MLM -- the hard way...
Hmmmm... if recruiting new members in order to get them to pay a fee is a source of revenue, then it's likely a pyramid scheme?
Probably true.
Makes me wonder about all the banks trying to recruit me to pay a fee on their credit cards.
Or the banks trying to recruit me to pay a fee on their ATMs, their late fees, and the host of other fees they charge for 'convenience'.
Basically, modern banking is a pyramid scheme.
Oh wait, I knew that already.
The sad thing is Ackman is right, but like Amazon Herbalife doesn't exist because of the reasons listed on their mission statement.
The corporations exist to launder money for human traffickers, drug cartels, weapon dealers, etc. Perhaps fronts for CIA operations or wealthy families. They are protected at the highest levels of government.
Of course I have no proof I can post, other than it's the only fucking thing that makes sense. How does a company exist for twenty years without turning a real profit or ever having a plan to do so?
I wonder if any of the Nazi art collection will show up on Amazon Art?
How does a company exist for twenty years without turning a real profit or ever having a plan to do so?
There are hundreds of companies that have been around for decades that have never made money and have no rational plan of ever making money yet investors pile in and hold for the long haul. SIRI?
It's not a pyramid scheme, DUH!
It's a triangle!
Nah, it's a circle jerk
People have known fractional reserve banking (also known as counterfeiting in the "individual" market sector) is a fraud, but look how long it has lasted. In fact, before fiat was used, fractional reserve gold lending (called stealing at the time when it was discovered) got modern "banking" started. That said, HLF is at long term resistence of $70/share that it last attained and rejected to fall to support to less than $30 about 2 years ago. So, now it is a good short from a technical standpoint. Timing is everything in gambling.