Sunday, 23 December 2012

The Most Innocent company in America - Poor poor Herbalife!

Dear Friends,

In Singapore, we have Olam. In America, we have Herbalife (HLF). The thing is herbalife suffered the same fate twice! Another $20 drop in one week! It happened to them in April and last week. Blame the shorting hedge fund managers!

This year 2 well known hedge fund managers both questioned herbalife business model. Greenhorn and Ackman. It is amazing that Ackman calls the company "pyramid". Sigh, i thought MLM has been around for ages, and it is not like herbalife is a new MLM company. They also did not change much of their business plan. Ackman actually bought huge amount of put options a few days before! This is all planned in advance.


Some of our friends asked about whether can invest in this company. My suggestion is to wait for the short to subside and wait for its next earnings to prove itself. Short term it is never good to go against the hedge funds who are shorting the stocks.

My opinion is next time you see a hedge fund manager like Ackman or Greenhorn talking badly about a company, just short with them! In America, they have hedge fund conferences whereby these sharks will make their presentations. And these 2 guys are famous to make a lot of pages of info why they short the companies! Just short with them wont be wrong.

