The Shorting of Frauds, Overhyped and Bankrupt Stocks Journal

Quote from m22au:

After reading a few neutral / bullish reports on HLF, I covered my (small) short in the high 20s. With the benefit of hindsight I could have gone long, and/or sold a put spread. But still I am grateful to Mr Ackman for providing the catalyst for the big plunge in the stock, regardless of where HLF goes in the long-term.
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The two articles that convinced me to cover my HLF short:

23 December
http://seekingalpha.com/article/1079421-but-mr-ackman-herbalife-is-a-sustainable-pyramid-scheme

28 December
http://brontecapital.blogspot.ca/2012/12/bill-ackman-enters-city-of-stalingrad.html

and also another article since then that lists all the things that need to happen before HLF goes to zero, including but not limited to, the FTC taking action against the company. Unfortunately I've forgotten the details of that article.
 
Quote from m22au:

The two articles that convinced me to cover my HLF short:

23 December
http://seekingalpha.com/article/1079421-but-mr-ackman-herbalife-is-a-sustainable-pyramid-scheme

28 December
http://brontecapital.blogspot.ca/2012/12/bill-ackman-enters-city-of-stalingrad.html

and also another article since then that lists all the things that need to happen before HLF goes to zero, including but not limited to, the FTC taking action against the company. Unfortunately I've forgotten the details of that article.
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In my experience people will always find 'reasons' to buy the stock. When they get oversold a ton it's just a matter of time till the optimists jump in and the stock runs out of sellers. Then the stock is in 'strong hands' bad news stop mattering and its hard to get the stock down for a while, dips get bought, etc

How long the rally lasts I haven't been able to determine through observations yet but it pays to use a trailing stop using the low of the previous day bar. I didn't do this on HLF and missed profits as a result, probably because I was still a bit scared of another drop, I should have used my emotions as a contrarian indicator
 
Hempton was on CNBC talking about HLF. He had similar points that I did in this journal, if the ponzi short case rests on FTC action its not a good short. He mentioned the cashflows of the company, I'm worried about that but even more so about its PEG ratio, this will just draw investors like moths to flames

I have no interest in shorting this stock unless there is some kind of government disclosure rule. Even then the international diversification could mean they can scam globally and only get hosed in the US. There are easier plays than this
 
Quote from m22au:

The two articles that convinced me to cover my HLF short:

23 December
http://seekingalpha.com/article/1079421-but-mr-ackman-herbalife-is-a-sustainable-pyramid-scheme

28 December
http://brontecapital.blogspot.ca/2012/12/bill-ackman-enters-city-of-stalingrad.html

and also another article since then that lists all the things that need to happen before HLF goes to zero, including but not limited to, the FTC taking action against the company. Unfortunately I've forgotten the details of that article.
More...

I found the third article:

31 December
http://blogs.reuters.com/felix-salmon/2012/12/31/whats-ackmans-herbalife-game/

which also links to Kid Dynamite from 21 December
http://kiddynamitesworld.com/why-bill-ackman-is-wrong-about-herbalife/
 
Covered AAMRQ. I believe that PR is misleading and the lawyer has incentives to talk nonsense but I don't have time to write about it right now
 
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