Betting on Zero

source: Betting on Zero

You could read the whole story in 10 min. And be done with it. But this movie stretched it into almost 2 hours long and boring - whatever it is. Tl;dr The guy shorts the stock (makes a bet). Another one doesn't like this guy so he buys the stock (makes a counter bet - longs the stock). Others join the second one. The second one wins. In the end the first one was right, but didn't make money out of it, because he has a punchable face and nobody likes him and stock isn't about being right or wrong but about gambling and how good of a gamler are you. The first one isn't a good gambler.

"Betting on Zero" is a documentary film about hedge fund manager Bill Ackman's legendary feud with a multi-level marketing corporation known worldwide as "Herbalife". Herbalife is a public company whose stocks are traded on the NYSE (New York Stock Exchange), they sell dietary supplements and encourage customers to recruit other people into the fold as distributors of their products. The company seems to be big proponents of providing financial freedom to their customers yet most of their customers who are responsible for selling their products and recruiting others people into the Herbalife cause find themselves filing for bankruptcy. This dichotomy reveals a more nefarious modus operandi that is based on preying on the vulnerable, as so aptly put in words by many: "Herbalife in Robin Hood in reverse". Bill Ackman first became aware of the dubious stats of the company and became interested soon as he realized that this was in all essence a billion pyramid scheme operating in broad daylight. To him the company was a lie so audacious that people had no way but to believe that it was true. So he took it upon himself to drag the company through the mud, to expose it's true colors and to make a neat profit while at it. Meanwhile there were is another faction on the ground level, away from the machinations of Wall Street, mostly made up of the Latino community, along with a few others who have experienced the harmful effects that Herbalife firsthand. They have lost a lot of money and are dealing with the very real repercussions that come thereafter. For the most case Bill Ackman and the Latino community, who are hit the hardest by the ill effects of Herbalife, remain in their own separate worlds. They are largely uninformed of each other and have to deal with the problem in their own way. These are two starkly different worlds and have their very differing views of how to deal with the problem. While the Latino community engages in protesting and providing community support while Bill Ackman engages in shorting Herbalife stock. The documentary highlights the key moments in their struggle against Herbalife. The documentary is very US-entric and leaves much of the global operations of Herbalife mostly untouched, save for a brief mention. Although Bill Ackman gets painted in a sympathetic light, the disenfranchised masses are those who retain all sympathies. The documentary does well to show the corrosive effects that these fraudulent corporations can have on a community the helplessness that comes therein. But even in the face of the dehumanizing effects of these large systems, the community remains resilient. Beaten down again and again till they had someone like Ackman on their side did they have any hope of winning.

I started to watch the document mainly because I was curious about Mr. Ackman's investment style. But, at the end, I got to learn and think about a lot more things than it. The document stitches well different facts, people, struggles, and battles surrounding Herbal Life, a controversial but quite successful U. S. company. Yes, it's about Ackman's challenging investment journey of shorting on the company's shares for multiple reasons (including humanitarian ones). But it's about innocent people lured into businesses where they are mostly destined to lose and fail. This part was sad as they were real people rather than abstract numbers on excel sheets or legal documents. It's also about flaws and loopholes in our economic, political, and legal systems (not only in the U. S. but across the world): Nearly imposed damages not being dealt because they are not illegal; controversial entities/people flourishing through connections and lobbying. I don't want to go far by making too big an analogy. But I now keep thinking about this pyramid scheme. Maybe many more companies and societies (than the focal company) may work on similar mechanisms to a less controversial and subtler extent, or maybe not!

A long but engaging and extremely even-handed documentary, and it's engaging in large part because it doesn't take obvious sides. You really don't know which way things will go, nor is anyone portrayed as a purely good guy or bad guy, and different parties are given equal opportunities to speak. I liked it.

It's an interesting story, but there's 15 minutes of useful content in the story; the remaining ninety minutes is pure filler. As you're watching, whenever you feel "god we get it, you've already said this a dozen times" jump forward 20 min -- you won't miss anything. I have nothing to say beyond that. Hopefully IMDB won't force me to pad this reviews with vast amounts of filler!

Overall this is movie is really interesting. William Ackman does his best trying to expose the business model used by Herbalife, which is cleary unethical and the potential to harm a lot of uneducated and unsophisticated investors. Meanwhile, another CEO of an investment firm tries to fight him by buying buying shares from Herbalife, which creates this competitive rivalry between investors. It does a great job highlighting all sides and the consequences the business model has (which is not officially defined as a pyramid scheme by the FTC, but is pretty damn close). For me, someone that studies banking and finance this movie could be a lot more attractive than for someone that is uninterested in finance or markets in general, my advice is therefore watch it if you are interested in the field of finance or like documentaries regarding economicies, else this is propably not worth it.

As of October, 2017 - a few months after the premier of this documentary - Herbalife stock price peacefully sits at ~67 USD. I just wanted to start the review with this statement to let everyone know the company is still well and thriving. None should look at this production as the documentary that exposes the dirty cheats that may run a corporation bankrupt or earn them the most thorough federal investigations of all time. My law teacher once told me: everyday people think that courts provide justice for the mass, but it isn't true. What they provide is law. This applies to Herbalife a lot: the way an MLM company operates is clearly unfair and unjust, but none was able to prove so far that it is completely against the law. There may be illegal operations behind the curtain we don't know of yet or 'Betting on Zero' was unable to bring to light, but as far as they are considered clean by the regulators, they go on. However I must praise the documentary for the financial approach. It gives very good explanation on basic terms like shorting, provides a good view of the hedge fund world and reveals why the efficient market theory is far-far away from reality. So in case you want to be the next George Soros, this is a must-watch for you. If you are looking for a documentary where the little men fight to get revenge on big money, then just skip this - Mexican immigrants praying with attorneys will hardly provide you any useful information.

You're being scammed if you believe the cherry picking facts in this movie: "Herbalife doesn't let you use its name on your fitness clubs". Yes and?...That's not shady practice - they don't monitor your club like a franchise would (think Mcdonalds). Therefore, they can't control how you represent them or the quality of how you run it. I wouldn't want you using explicitly my name either if I couldn't keep an eye on you. Look, you'll meet salespeople in every business. Some people are pushy and don't tell you the truth. That could very well be it. Not the company's responsibility. BEFORE you sign up, there's a very clear document outlining that you may not make money (and other things clearly outlined). If you can't read or think for yourself, you shouldn't go into any business. How much does it cost to be a McDonald's Franchisee? Oh right, about $1million. And you think Herbalife is going to give you money *right away* the moment you sign up with a minimal investment JUST for selling a few products? The company would go out of business. Of course they're going to require you to gather a large sales team of distributors - they need to sell a lot of product before giving you royalties. Think of it this way - you have a new watch business. You need people to sell watches for you in order to scale - you don't give them half your profits right away, do you? ANY corporation works this way. This movie twists facts to make it look like things are shady when there are simple explanations for them. And quite frankly, not everyone is an entrepreneur - you don't all have the ability to stick to something or to change your path. Look up Akbar Sheikh. Dude was living in a closet before he made his money on Clickfunnels. No wait, don't look that up. You might get scammed.

I had heard of Herballife before, but I never really looked into it. I have to admit that only by name and the vague promise of healthy living/eating, I'd say I would be interested in that product. But having watched the movie and having checked online for other sources, I wouldn't do it in hindsight. The Pyramid thing of selling, is something I despised from the moment someone tried to sell it to me. Back then I got introduced into the life insurance business. Where when you got people signing a contract, you got a percentage. But you could also get other people involved, lean back and let them do the hard work. Obviously, the most money would land with the people at the top ... all those below would get a smaller amount ... all the way to the crumbs at the bottom. The movie portrays different sides and gives voice or offers perspective from Herballife too. There are more than a couple of warning signs. But if someone promises you riches and a lot of money ... well some people do fall for that. Intriguing and compelling editing does the rest