tag:blogger.com,1999:blog-4815867514277794362.post3818818944913758154..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: For kicks: just how big is Herbalife? And a simple proof that this is not a pyramid.John Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-4815867514277794362.post-40524006143540747202014-09-03T18:29:49.213+10:002014-09-03T18:29:49.213+10:00The calcs are wrong. With the 15 servigs/tin and ...The calcs are wrong. With the 15 servigs/tin and the right volume points you get apprx 4 million/day servings. Distribs are supposed to use the products. With 3.7 million distribs drinking one shake/day there are only 0.3 million going to non-distrib customers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-52961528056833922712014-08-31T12:42:20.364+10:002014-08-31T12:42:20.364+10:00You make an assumption that a non-distributor cons...You make an assumption that a non-distributor consumes the same amount of product as a distributor self-consumes. Big mistake. I would guess that a distributor on average self-consumes / throws out / gives away 10X the amount that an average non-disributor does. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-89160556769560144252014-08-11T06:28:53.787+10:002014-08-11T06:28:53.787+10:00HLF can sustain ROE for a long period of time like...HLF can sustain ROE for a long period of time like most other MLMs do, by lying.Texhttp://www.stoptheamwaytoolscam.woredpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-70576056304779991382014-08-11T03:12:14.719+10:002014-08-11T03:12:14.719+10:00Anonymous, I was drawing strong parallels between ...Anonymous, I was drawing strong parallels between HLF and Amway because there are strong parallels between Herbalife and Amway. Like Herbalife, Amway and most other MLMs have a high turnover, for the same reasons. In fact, Herbalife and most other MLMs operate very similar to Amway, the world's largest MLM scam. Read about them here: www.StopTheAmwayToolScam.wordpress.comTexhttp://www.stoptheamwaytoolscam.woredpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-67437261885486244552014-08-09T01:29:26.092+10:002014-08-09T01:29:26.092+10:00Just curious, since HLF sales leader and members c...Just curious, since HLF sales leader and members can leave en masses, diet plan has trend and barrier of entry to HLF business is low, how can HLF sustain high ROE for a long period of time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-73374942512588136182014-08-08T23:42:10.630+10:002014-08-08T23:42:10.630+10:00Hey John:
What do you think of Amway's politi...Hey John:<br /><br />What do you think of Amway's political influences? People like to associate MLM companies with scams but these big ones are sort of like legalized mafias. I can find some MLMs' connections to Mitt Romney because he was a Utah politician. I wonder why isn't CNBC blaming Amway or other MLMs for ripping people off using pretty much the same methods.Brucenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-30179532826271587772014-08-08T21:35:25.162+10:002014-08-08T21:35:25.162+10:00Tex,
I was not trying to draw strong parallels be...Tex,<br /><br />I was not trying to draw strong parallels between Amway and Herbalife<br /><br />I was trying sincerely to not miss the forest for the trees<br /><br />Can Amway Implode - If Yes, Bad Idea<br />Can Herbalife Implode - If Yes, Bad Idea<br /><br />Let us say that these businesses will not survive if they stop getting new recruits, then these businesses are actually very leveraged, let's call it operational leverage in a way, what comes out is that if the above assumption is right, it is a very fragile business model.<br /><br />In Case, Amway or Herbalife can survive for a year without adding new recruits and have to be only dependent on existing recruits, if they can survive, the business model is tough to bet against, but incase they cannot, there is something seriously wrongAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-36831316864690560752014-08-08T12:58:15.121+10:002014-08-08T12:58:15.121+10:00Herbalife operates very similar to Amway, the bigg...Herbalife operates very similar to Amway, the biggest MLM scam on the planet. Read about both of them here: www.StopTheAmwayToolScam.wordpress.comTexhttp://www.stoptheamwaytoolscam.woredpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-77800658436412514122014-08-08T05:45:45.173+10:002014-08-08T05:45:45.173+10:00The Only workable MLM company I know is Amway and ...The Only workable MLM company I know is Amway and the products are not awful, they almost always get used up by end customers<br /><br />Simple, if the herbalife products are awful it is a pyramid scheme, if they are great it is not !<br /><br />John, there are far easier stuff to make money on, find easier games to play, it is very difficult to not have a strong opinion after doing so much research, but maybe it is not a bad idea to give up a much loved idea<br /><br />You are getting into such minute details of the thesis that it is easy to lose out on the big picture<br /><br />The only question you have to answer is - can this business implode?<br /><br />That is it, the rest is superfluous <br /><br />Just buy some out of the money calls on the company and move on to a better risk reward situation :)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-50875507822106701112014-08-08T03:08:47.134+10:002014-08-08T03:08:47.134+10:00My wife is Canadian but born in Ghana. We both wor...My wife is Canadian but born in Ghana. We both work in Finance in London. Her niece (from Ghaan) stayed with us recently - she's overweight. I was surprised though when she recently signed up to herbalife - its a substantial amount of money for her - £100 or so every month. I think Herbalife continues but at what stock price I have no idea. Whats a reasonable P/E?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-58721125398039421242014-08-07T23:08:01.571+10:002014-08-07T23:08:01.571+10:00Advice from Jacobi and Munger: "Invert, alwa...Advice from Jacobi and Munger: "Invert, always invert"<br /><br />What happens to a pyramid scheme when exposed? It collapses under its own weight. Herbalife has been "exposed" for two years. It has not collapsed. Therefore, it is not a pyramid scheme.<br /><br />-Matt TAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-58992341734050642692014-08-07T22:13:51.728+10:002014-08-07T22:13:51.728+10:00John, when you get a moment you should take a look...John, when you get a moment you should take a look at tjs partners, who has made comments on your site. His angle has always been an ethical and moral one and how bad the company is. After examining his court battle with Evergreen Hedge from you will get my drift about the hypocrisy of these ethical shorts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-55204912082417437732014-08-07T22:08:05.748+10:002014-08-07T22:08:05.748+10:00I don't really have a dog in this fight, but I...I don't really have a dog in this fight, but I'm finding it difficult to distinguish between the claims about HLF being a pyramid (and hence unsustainable by definition) from those that find the business model distasteful and even immoral.<br /><br />There are lots of businesses and companies that I find distasteful and immoral - and while I'd like to believe they won't last for long, or won't be good companies to invest in, that doesn't make a complete argument for them to go to zero.<br /><br />Lots of companies 'prey on' the poor by selling them overpriced products they probably shouldn't buy. <br /><br />Perhaps 'we' can even accept that this is true about HLF (at least hypothetically), but the 'moral' arguments are not clarifying the pyramid aspect.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-15599009899455316352014-08-07T06:32:47.485+10:002014-08-07T06:32:47.485+10:00John, your family doesn't live with a dozen pe...John, your family doesn't live with a dozen people to a room, desperate to make money.Texhttp://www.stoptheamwaytoolscam.woredpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-75480177214586936902014-08-07T06:30:58.419+10:002014-08-07T06:30:58.419+10:00John, another useful piece of information to have ...John, another useful piece of information to have is this: How is the business is presented to prospects? If it is presented like Amway, which I strongly suspect it is, based on the mountains of evidence Ackman has provided that shows HLF to be an Amway clone in virtually every aspect, the opportunity to make money is what is emphasized, not the products. In this case, it is doubtful most people sign up to use the overpriced powdered shakes. <br /><br />It is much more likely people signed up with the intention to be distributors, then chickened out or got rejected by one person, and decided to literally eat (or in this case, drink) the inventory. This happens in Amway all the time, probably well over half the distributors fall into this category. Who would want to admit they are a coward? It is much easier to claim you just bought the shakes because you wanted to buy overpriced shakes. <br /><br />Or perhaps they tried hard and failed to sponsor anyone, or sponsored a couple who quit right away (see above) and also decided to eat/drink the inventory. Many of them tried to succeed for over a year, as the upline encourages people to do, and the one year product return limit expires. Also, who would want to admit they are a failure? Again, it is much easier to claim you just bought the shakes because you wanted to buy overpriced shakes. <br /><br />People are also naturally lazy, particularly group 1, above. Therefore, they don't want to go to the trouble of finding out where to send the shakes, get a box big enough, determine how not to pay for shipping, place the items and packing material inside, take the box to the Post Office, wait in line, and ship it. It's much easier to eat/drink the products, give them to a charity, family, friends, or just let them rot on the shelf until the next time they clean out the closets. <br /><br />As a former, 16 year Amway "veteran," having conducted extensive research since 2005, and an astute observer of the way people think and act, I know what I'm talking about. I simply don't buy Hempton's story, it is far too simplistic of a reason for Ackman not to have considered or discovered by now. It is implausible to think Ackman would spend $50 million and not already come across this possibility. <br /><br />By the way, I dismantled the Vandaele report on my blog, sentence by sentence. See the 7/28/2014 post in the news section, section D. My main complaint is there is no basis for any of the statements.Texhttp://www.stoptheamwaytoolscam.woredpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-29005557218888690132014-08-07T03:27:59.507+10:002014-08-07T03:27:59.507+10:00John--
dislosure: no position in HLF
If you are t...John--<br />dislosure: no position in HLF<br /><br />If you are trying to take a scientific approach I think you must take the short thesis and work backwards.<br /><br />The shorts say the distributors, if they ARE drinking the shakes, are just doing it to get rid of them, and not for meal replacement. Is that reasonable?<br /><br />Lets assume the distributors give away 0% to friends and family. They are going this alone. The distributors would have to be consuming 1000 per year if that were the case. <br /><br />That is 3 per day. In water, that is 270 calories, in milk, it is 540 calories. <br /><br />Depending on the country, people consume 2500-3500ish calories per day. Is it reasonable to think that, in their quest to become supervisors and move up the Herbalife food chain, distributors are gulping down 10-20% of the calories in shakes?<br /><br />That seems perfectly plausible to me. <br /><br />--EvanTEvan Tnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-4363602923858042712014-08-07T02:14:05.965+10:002014-08-07T02:14:05.965+10:00Seriously John. You are lost in your "analys...Seriously John. You are lost in your "analysis". You seem intelligent. Something is clouding your judgment. Your Sisyphusian efforts to defend this company make no sense. Challenge yourself. See and process the other arguments rather than trying to gin up explanations that the company itself doesn't even make. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-41848833323553351872014-08-07T02:07:14.718+10:002014-08-07T02:07:14.718+10:00John,
I love your work. Please don't take any...John,<br /><br />I love your work. Please don't take any of this personally, which it most certainly is not.<br /><br />See the World Health Organization BMI statistics for obesity<br />http://apps.who.int/bmi/index.jsp<br /><br />Using the 2009 data<br /><br />1/4 of Mexican Adults are classified as obese (23.6%)<br /><br />against 2.9% for China<br /><br />Out of shape Mexicans looking for help is at least plausible.<br /><br />Fat East Asians seeking health benefits from powdered drinks?<br /><br />Yes, 2.9% of a big number is a big number, but the fatties are going to be "thin on the ground", so to speak.<br /><br />HLF, broadly, seems more like a product targeted for enabling evasion of local capital controls than a health product.<br /><br />Relatively high cost per pound, water soluble, cash-based transactions.<br /><br />Whether that supports a short position or a long position, I'm agnostic. <br /><br />Switzerland ran a great business for many centuries, until it didn't. I have no view on whether HLF's time is at an end.<br /><br />ThanksRellagnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-25120789753753267002014-08-06T17:06:13.937+10:002014-08-06T17:06:13.937+10:00"What herbalife is selling is a business plan..."What herbalife is selling is a business plan for a fee of $4,000 in shakes. that is illegal."<br /><br />If any of you guys come to India, you'll make tonnes of money<br /><br />Superb Reasoning<br /><br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-22543297135263880262014-08-06T17:05:27.521+10:002014-08-06T17:05:27.521+10:00"The majority of Nutrition club's sales a..."The majority of Nutrition club's sales are to Distributors, their families and friends, not third party retail sales."<br /><br />--<br /><br />8% of the number of meals as McDonalds. You strain credibility sir.<br /><br />I could not get my family to drink five such shakes a year let alone 200.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-87144084274539579732014-08-06T17:04:43.553+10:002014-08-06T17:04:43.553+10:00"John, there's plenty of sad Herbalife au..."John, there's plenty of sad Herbalife auctions on Ebay, for gods sakes. Have you searched ebay for 'Formula 1 Herbalife?' There's nearly 2,000 active listings. There's 3,500 completed listings, thats only back till May. <br /><br />And, you have admitted that Herbalife are scumbags who take advantage of people, so why can't you accept that people might be too ashamed and embarrassed at having been taken advantage of, and throw the canisters away?"<br /><br />I am writing from India without any stake or understanding of the entire bull/bear case<br /><br />I am just appreciative of how the Gentleman above me thinks ....Charlie Munger would be proud<br /><br />I think the owner of the blog can go deeper with regard to the psychological aspects of the business model - I think that is required <br /><br />Thanks<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-54050899073418835842014-08-06T14:39:39.460+10:002014-08-06T14:39:39.460+10:00John, there's plenty of sad Herbalife auctions...John, there's plenty of sad Herbalife auctions on Ebay, for gods sakes. Have you searched ebay for 'Formula 1 Herbalife?' There's nearly 2,000 active listings. There's 3,500 completed listings, thats only back till May. <br /><br />And, you have admitted that Herbalife are scumbags who take advantage of people, so why can't you accept that people might be too ashamed and embarrassed at having been taken advantage of, and throw the canisters away?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-44515519597081551072014-08-06T12:40:00.679+10:002014-08-06T12:40:00.679+10:00"Each packet contains 15 fifty gram meal repl..."Each packet contains 15 fifty gram meal replacements"<br /><br />I believe your maths are off.<br /><br />Porciones por Envase: 30<br /><br />There are 30 twenty-five gram meal replacements per container.<br /><br />Which means twice as many meals consumed, at a price of only about $1 per meal. Of course the meals can be consumed up to once every two hours according to the advice of my distributor.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-60065837519610074292014-08-06T12:27:44.131+10:002014-08-06T12:27:44.131+10:00In the end, a good quarter absolves all sins. Herb...In the end, a good quarter absolves all sins. Herbalife did not have an especially good quarter. If you're wrong about the stock, it will be because the growth slowed naturally, not whatever Ackman has posited. <br /><br />Gun to my head: the bears will be right for the wrong reason.Anonymousnoreply@blogger.com