NEW YORK (Real Money) -- Perhaps I misspoke, Or perhaps Herb Greenberg misheard me. But I have never in my life believed you should "forget the fundamentals" when it comes to Herbalife (HLF - Get Report) or Green Mountain (GMCR - Get Report).
Because what I meant to say, or did say, frankly, is that all that matters is the fundamentals and they simply aren't as bad as the short sellers think they are.
That's my premise and I defend it this way:
1 - Herbalife is a company that sells a product that you may or may not care for, in a way that you may or may not care for, with a point system you may or may not care for. You may think that the direct-selling model is totally flawed and that all the company does is recruit others to sell a product that -- if it were just sold in stores -- wouldn't do that well and the company would make far less money if it would make money at all. You know what? That's probably true. But it doesn't matter because that's not the company's business.My point was that Bill Stiritz -- a very smart investor who knows the business, a man I have admired since he was at Ralston, a man who is to food as John Malone is to cable -- has taken a very big stake in the company, and who am I to say that he's wrong. I do not believe Stiritz is buying Herbalife to bash the shorts, including Bill Ackman. I think he is buying it because he believes the fundamentals are undervalued and when the company gets a clean audit -- which is not its fault, but the fault of the auditors -- it can go higher. And that direct model business? We can wait and wait for the government, some part of the government, to step in to close the company, and maybe some entity will. That's a risk you have to take to own it. I think that there's not much more value added to talking about Herbalife than that. You want to own it? You know the risks. You want to short it? You know the risks. There. That's my rap on Herbalife.
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