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The stocks of three of the four large multilevel marketing firms he has exposed are selling near their 52-week highs: Usana, Herbalife, and Pre-Paid Legal. A fourth, Medifast, is below its yearly high but doing well. Minkow tries to support his institute by shorting the stocks he exposes — that is, betting they will go down. He has generally broken even on that activity, but his adventures have been very expensive because his targets almost invariably throw lawsuits at him, claiming that his shorting activities are reasons for his probes. So he may stop shorting: “We are considering shifting our business model back to uncovering fraud for free as opposed to the whole shorting of public companies,” he says. “One can literally be sued into silence.”

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SurfPuppy619 Oct. 6, 2010 @ 3:44 p.m.

Grimm had 66.9 million shares and Hanser 11.4 million in 2007. The company never made money, defaulted on its debt, and had an accumulated deficit of $14.9 million.

LOL....sounds like the west coast version Warren Buffet!

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Don Bauder Oct. 6, 2010 @ 6:35 p.m.

Response to post #1: Since the stock sells for a fraction of a penny, the market doesn't seem to think much of the company's prospects. Best, Don Bauder

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jonrpatrick Oct. 14, 2010 @ 4:33 a.m.

What a generic, hating, vengeful, biased article! I hope this doesn't qualify as 'news reporting' here. The most important thing is for people to remember it's netWORK marketing. Sure, the dreams of houses, cars, lifestyle, vacations and swimming pools filled with cash are great... but you don't join and cash starts rolling in. The person who realizes this takes work, effort, and frequently things you've never done before!
The people who 'fail' and badmouth MLM are those who QUIT and never WORKED to generate the skills they needed. Yes, it has a very high attrition rate, because people are only paid on their successes in marketing. You can make many thousands a month just retailing products. Now, not ALL MLM's are top-notch - anyone with a snazzy website can start an MLM... but there are many dozens of great, ethical companies that allow you opportuntity. But there are whole skill sets you need to develop, and if someone's looking for Get Rich Quick, they'll fail. http://JonRPatrick.com

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Don Bauder Oct. 14, 2010 @ 7:53 a.m.

Response to post #3: I have been badmouthing (your word) MLMs for more than two decades. I have never worked in the industry and never will. Nor have I ever seen a bar of Amway soap in someone's home. Best,, Don Bauder

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Darren Oct. 19, 2010 @ 1:27 a.m.

To post #2 (Jon R Patrick), your bias is built-in since you obviously are a network marketeer. Don Bauder is in fact, one of the most objective, fair, honest, sincere and informed business journalist, I've seen, and I've followed his articles for decades (including those in SDUT). You say he is "generic, hating, vengeful, biased" in his topic article, and I don't see where you come up with that.

I've had many people attempt to involve me over decades into what you call "network marketing" but what is too often pyramid schemes. I will be honest to tell you that only a few trusted people or friends, did I elect to attend perhaps the first introductory meeting to get acquainted with those "network marketing" companies, their products, and people. Though, I have never joined any of them.

The bulk of "network marketers" that I've been approached by, I did not attend their first meeting because of their approaches. One, I don't like being bothered in bookstores, the business section, by someone who pretends to be highly succe$$ful (thus why are they prospecting in a bookstore?), and attempts to befriend you, and then give you some scripted $ales verbiage trying to cast you in like a fish. Second, I think any "network marketing" adventure worth attracting people into, would disclose all facts up-front, versus using the subtle disclosure method of trying to get prospects to the first meeting without ever telling them what is really involved. Third, I don't $ell to my family or friends, period. I don't care how good a product I have been trained to think I represent, I don't want to be using closing techniques on my trusted ring of family/friends.

Years ago when the dot-com boom was just going bust, I was invited to a weekend seminar where they had motivational speakers trying to swindle us into a "network marketing" type opportunity by having a shopping website for your friends/family. The gal that invited me, invested $2,300 that day, in a "training package" that set you up with the website. I walked out. She lost the $2,300 and never made a penny, although she worked hard at it for a while. The company went bust soon after.

Lastly, the only way to win in "network marketing" is to chose a stable and successful company with great products and ethical people. I am not saying they are not out there, but there is a hit & miss rate to be expected, and once you pair with the truly strong platform, one must commit enormous work (time, energy) to make it payoff. Why not do that in your own business?

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Don Bauder Oct. 19, 2010 @ 7:03 a.m.

Response to post #5: There has been a lot of research showing definitively that only a few people make good money in MLMs. You can see it on Barry Minkow's website, www.frauddiscovery.net. Best, Don Bauder

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a2zresource Oct. 19, 2010 @ 7:54 a.m.

RE "Lastly, the only way to win in 'network marketing' is to chose a stable and successful company with great products and ethical people":

MLM is a good way for large to mega-sized corporations to avoid paying employee taxes. Example: Primerica MLM of mortgage, investment and insurance services door to door before subprimality and other related factors resulted in the Crash of 2008.

MLM pretty much describes the insurance industry today, as if AIG ever wanted to treat insurance agents as anything other than piecework producers of policies. Even after the insurance industry bailout, one can only imagine just how little anyone selling insurance is actually contributing to the tax base, while everyone else picks up the slack.

I know people who made a killing by moving air purifiers during the 2003 and 2007 SDG&E wildfires via MLM... they kept my asthmatic relatives from suffering from the really bad air quality as smoke and ash filled the outdoor air.

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Don Bauder Oct. 19, 2010 @ 2:34 p.m.

Response to post #7: I would certainly resent paying taxes that an MLM is dodging. Best, Don Bauder

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