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I find it almost too ironic to see a hedge fund manager righteously calling out another business model.
Herbalife's business model is "pyramid scheme", though. It's worse in basically every possible way, regardless of how poorly you view hedge funds.
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Seems like a sure thing to short the piss out of an enterprise like this and wage a comprehensive campaign of activism and consumer education against it. With rationality on your side, how could you lose?
> with rationality on your side, how could you lose? Look at south Africa, multi vitamins, and hiv/aids denialism. It's pretty fascinating, human toll aside.
I use to work in legislative affairs for the natural health industry. It's all one big scam. I try to explain it like this: Company A sells natural remedies, etc. Company B is a news organization which reports on natural health remedies, and also advertises for those companies, et. Nonprofit C is a consumer watchdog organization that investigates and promotes natural health. They are supported by the natural health i…
Edit: Seriously? I'm getting down voted. Look I don't care how much you hate the natural products industry but every industry has sleazy business practices. They are not alone.
Edit2: For example I work in the entertainment industry and the awards are all made up, the news is mostly just to get attention and they have politicians in their back pockets.
I use to work in legislative affairs for the natural health industry. It's all one big scam. I try to explain it like this: Company A sells natural remedies, etc. Company B is a news organization which reports on natural health remedies, and also advertises for those companies, et. Nonprofit C is a consumer watchdog organization that investigates and promotes natural health. They are supported by the natural health i…
Seems like a sure thing to short the piss out of an enterprise like this and wage a comprehensive campaign of activism and consumer education against it. With rationality on your side, how could you lose?
-Keynes
Here's what I know: The products are of dubious quality, and can be bought for much cheaper elsewhere. The majority of people who end up being distributors absorb a net loss, and given that many already come from financially unstable backgrounds, that loss is particularly painful. The largest sellers in the chain either got in super early, or make more money off of ancillary products (seminars, etc.) than actual sales.
That sounds shady as hell as best, downright predatory at worst, and all of the "Yeah, it might be bad, but so is X" arguments in the world don't absolve it.
I guess where the real decision fork is to what extent you feel the Government is responsible for making it harder for people to make dumb decisions by shutting down the companies that prey upon them.
I live and work in Utah, which, for not completely clear to me reasons, is home to a lot of MLMs. Nu Skin, Usana, Xango, doTerra, Young Living, Jamberry (and those are the ones I can just name off the top of my head) are all headquartered here. For an area that in many ways is punching above its weight class in terms of tech companies, I occasionally have nagging (possibly unfounded?) concerns in the back of my head…
I don't really get the Herbalife defense in here. Here's what I know: The products are of dubious quality, and can be bought for much cheaper elsewhere. The majority of people who end up being distributors absorb a net loss, and given that many already come from financially unstable backgrounds, that loss is particularly painful. The largest sellers in the chain either got in super early, or make more money off of an…
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You may not like it, but it is not necessarily a scam. Some of the posts by Bronte capital mentioned in the article http://brontecapital.blogspot.com/2015/06/herbalife-very-lon... http://brontecapital.blogspot.com/2016/07/herbalife-and-end-...
It's unfortunate that you are being downvoted - especially since you are citing John Hempton's excellent work on the topic. It's really worth a read and an interesting counterpoint to Ackman's analysis.
Does anyone know if there have been more developments to this story in the two years since this article was written?