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View Diary: After losing $1 billion bet, Hedge Fund seeks federal government help to bring company down (151 comments)

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  •  What's the difference between what Ackman is (4+ / 0-)

    doing in this case, and what everyone failed to do in the Madoff case?

    "Because I am a river to my people."

    by lordcopper on Mon Mar 10, 2014 at 04:23:39 PM PDT

    [ Parent ]

    •  Madoff was a pure pyramid scheme (4+ / 0-)
      Recommended by:
      lordcopper, VClib, Nailbanger, murrayewv

      In taking money from new investors at the bottom, to pay for investors at the top.  The system can keep going, as long as you can find more investors to invest at the bottom--otherwise, the scam crashes down.  Herbalife is more of a pyramid scheme to sell a product to people.  If you want to make more money, you have to bring more people into the company to buy more products.  The system doesn't crash, as in the Madoff scam of taking money from the bottom of the pyramid to pay those at the top, but you're also not going to make much money in selling your products.  

      At least, that is what I can gather from the MLM plans.

      •  Excellent answer, but the point I was making is (1+ / 0-)
        Recommended by:
        Eric Hopp

        that the "market" is biased in favor of information.  Those tangentially connected to the Madoff case have been criticized for violating the first rule of finance, "Know Your Customer".  In this case, Ackman is doing just that (he would claim).  The only question is if he is correct.

        "Because I am a river to my people."

        by lordcopper on Mon Mar 10, 2014 at 05:25:52 PM PDT

        [ Parent ]

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