I can’t believe we are half way through February already.
At the end of last year, I held roughly 50% of my holding in cash so I put some of that to use recently by buying small to medium positions in unknown small caps as well as a couple of big names.
Here are some recent notes and links I posted:
- InfuSystem Holdings (INFU)
- Bio-Reference Laboratories (BRLI)
- Notes on Syntel (SYNT)
- Nathan’s Famous (NASDAQ:NATH) Notes
Some Recent Buys and Thoughts of HLF
Here is what I posted on Twitter a couple of days back.
I forgot to mention that I am also Long Herbalife HLF.
The main thesis that Ackman and everybody is screaming about is that HLF is a Ponzi scheme.
Couldn’t disagree more.
To keep this short and hopefully try not to introduce more “noise” into the mess already, Multi Level Marketing (MLM) is huge in Korea and Asia.
Some of my relatives are still involved in MLM to this day so I have heard my fair share of sales pitches, compensation schemes, lectures and other pitches. I helped deliver the goods myself.. lol.
Looking back, I can now understand the psychology aspect of why my relatives are so into MLM. The main point I want to bring up is that they really love the product and not to make a living out of it.
Are Herbalife’s shakes and pills overpriced? Yes to those who do not take the stuff. No to those who are loyal to the brand and the product.
Where does that loyalty come from? The best form of marketing, word of mouth. Especially through the mouths of people they love and trust. It’s virtually unbreakable.
I did not spend 18 months analyzing HLF, and Ackman is not wrong on everything, but it seems like Ackman is falling into backfiring and skill bias.
Backfiring bias: When presented with information that goes against your viewpoints, you not only reject challengers, but double down on your original view.
Skill bias: When education and training causes confidence to increase faster than ability.
I’ve started to build a perverse nature of trying to find bad articles on companies I want to buy.
I don’t buy into the whole argument that just because you can’t see where AAPL will be 10 years from now, it is speculation.
Ultimately, the success of any investment is judged on the price you pay.
NOK at $1.70 was a good investment or trade. Even GRPN at $2.70 may be a good investment.
The thing that many value investors misinterpret is that such a “trade” is speculation and not an investment. In real estate, there is nothing wrong with buying a beaten down home and flipping it a few months later.
In my books, an investment is one where your primary goal is to make money on calculated risk.
So while others were debating whether AAPL is an investment or speculation, I went ahead and bought myself some apples.
The following is couple of great articles none the less.
Long HLF, AAPL, IEHC, INFU (Sold out RSH)
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