Saturday, April 6, 2013

Good Read

Interesting read highlighting fundamentals investment mindsets vs not so explicit trading mindsets.  Knowing a truth doesn't mean a trade materialize in that truthful direction. No one sees markets in 20/20 vision.

The whole MLM aspect too was interesting in that such a strong fundamental view coming from Ackman failed to capture the many different types of people involved in the Herbalife business. His viewpoint comes from a very high level one track mindset.

I've been to a few Amway meetings, and they try to recruit like cults. The average person involved in distribution for an MLM most probability won't know or care what some Fat Cat Hedgie guy thinks or says. MLM's run on a faith type system and highlight the 1% Ackman highlights as successful, as a norm or something to aspire too. Reinforcement, and self-fulfilling yumminess.

Hope and faith are a powerful thing. Powerful enough to trump any short plays. The only question is how long can Ackman's billions last until the margin calls ring in...

Who knows, maybe he will get lucky like that time Robertson sat on a metals position for more than 5 years to claim he was "right" on the trade after it moved in the desired direction...

When you are well funded, its easier to sit on tougher positions.

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