There is something that many people with strong opinions miss entirely.

You can be technically right and entirely wrong.

Being judgmental about a situation and using your subjective lens, thinking you have the truth, does not translate in reality.

Why?

Because reflexivity impacts a market way more than what your fundamentals believe it is worth.

What is reflexivity?

Market participants’ biased views shape fundamentals.

A purely economic view of what the fundamentals are overlooks the importance of appreciating the subjective value of an asset.

When you have a positive feedback loop, optimism drives purchasing, which in turn pushes prices higher. The company gains capital, helping Fundamentals (Pnl, Balance Sheet, Cash Flow Statement and the ratios) improve, fueling more optimism.

When you have a negative feedback loop, fear drives selling, which pushes prices lower. The company struggles to raise capital, and fundamentals worsen, fueling more fear.

Reflexivity is about the two-way relationship between perception and fundamentals. The aggregate subjective reality becomes the objective reality.

So now, when we transpose that reality on the dating and relationship market, you can feel or think that fake-looking women are of lower quality, thus are frauds with no intrinsic value based on real beauty or amazing personality, as their looks translate superficiality. That is your subjective value based on what you think about objective metrics. The fundamentals of beauty have been tricked with superficial tools.

So, let's call that the fundamentals are artificially propped up by fakery; therefore, it is all fraud, and the beauty does not stand.

Regardless of your personal taste, the best proxy for a market where women can advertise themselves is IG. Their handle is a ticker (The shorthand letters for the name of the company), and their following counts the bid-ask spread (the price for buyers and sellers to interact in the market; the margin is what the broker pockets). That is how they establish their popularity and their expectations and requirements when they are being flown out. Their prices if they decide to escort officially. You may think it has no intrinsic value, yet that is how companies look for influencer sponsorship after looking at their engagement metric, to advertise their goods.

Some will argue that it is all fake based on popularity, not on quality, but who defines quality? So is the price of a stock popularity, or the indication of market value, once the number of shares is discounted (market capitalisation = price of the stock x number of outstanding shares)?

It’s a negotiation between technical standards (objective) and market perception (subjective). In a free market, buyers’ collective perception dominates, because if people stop believing something is high quality, its market price and survival reflect that.

A stock’s price is partly an indication of underlying market value (once you account for shares), but it’s also partly popularity.

But who defines popularity?

Market participants.

That is where reflexivity comes into play. Many Hedgies (Hedge Fund Managers with deep pockets) got themselves wrecked thinking they would be the smart kid in the room, thinking they knew better than the market, focusing on what they believed to be fundamentals, ignoring reflexivity, to close their positions with their dick between their legs. At the very least, they had skin in the game, and they had the option to bet big on their vision of the asset or thematic they believed in.

But most people with strong opinions on the subject of fake-looking IG models being of lower value than natural-looking women first don't have the optionality to make their judgment valid (aka they don't bet against the trend), so they have no skin in the game. Secondly, they don't influence a market; therefore, they are as good as a guy watching other people interact with an asset getting traded left and right (aka watching highly market-valued women get fuck here and there, while claiming they are overvalued).

You can say all the Megan Foxes are ugly and get lots of likes, but everybody knows you are full of shit, because you would not have access to her anyway. Turning a lack of optionality into a virtue is like a post-wall infertile woman saying she never wanted kids. Hardly believable, all the work of the ego to protect whatever agency you think you have, but you don't, otherwise you would not be so desperate to have that view being validated by others as the norm, to feel reassured you are not alone in thinking this.

The market defines the norm, not you, no matter how desperate you are in believing otherwise, or how fake you think the market is. Permabears got themselves destroyed in the 2010s trying to short the overall market because it was all based on bollocks Monetary Printing. They may have been technically correct, but the market disagreed. You can say to yourself you are right, but what does your portfolio say?

But let's be more specific and assume you have the optionality and want to operate on a market propped up by hype.

In the case of Herbalife, you would represent Bill Ackman, a billionaire Hedge Fund Guy who said Herbalife was a Fraud and take a massive short position (betting on the price falling). You make it very public, trying to create a perception that Herbalife is doomed. The negative perception itself pressures the stock (falling prices, spooked investors, distributor doubts), which threatens Herbalife’s actual business fundamentals.

Herbalife represents some fake IG Bimbo that gets lots of money from hoeing around between millionaires and billionaires (current Herbalife investors).

On the other hand, you have a representation of the status quo, comprising individuals who initially supported the hype behind Herbalife, represented by Carl Icahn, another billionaire investor, who took a massive stake in the company to stick it up to his fellow Jewish enemy. His support stabilises investor sentiment, which helps Herbalife survive long enough to restructure.

What happened?

Ackman first revealed the bet in December 2012, when Pershing Square disclosed a $1 billion short, calling Herbalife a pyramid scheme.

Right after the public feud, Icahn started buying aggressively. By mid-2013, he became Herbalife’s largest shareholder, with more than a 16% stake.

After years of very public battles with Icahn from 2013 (including the infamous Icahn fight and multiple regulatory probes), Ackman began reducing the short in 2017.

Icahn raised his holdings to nearly 25% in 2016 of the company.

By late February 2018, Ackman confirmed he had fully exited the position, having lost hundreds of millions of dollars..

After Ackman exited his short position in 2018, Icahn stated that he had generated over $1 billion in profit on Herbalife.

Optics-wise, Ackman transferred his original $1 billion short bet to the pocket of Icahn.

In 2021, Icahn finally wound down most of his position, selling the majority of his shares back to the company. He exited with huge gains, contrasting sharply with Ackman’s losses.

CONCLUSION:

Herbalife’s model relied heavily on distributor recruitment. The Hoeligarchy also relies heavily on self-starters who distribute their bodies or their image for transactional purposes to the highest bidders. After regulatory changes, sales slowed.

Investor confidence dropped further when growth could no longer be maintained at earlier levels.

Icahn's exit removed a strong vote of confidence, fueling bearish sentiment.

So Ackman was eventually right if we look at the current $9 price vs the $60 stock peak.

The stock had weaker fundamentals than the market capitalisation implied, mostly relying on the reflexivity principle, with Icahn's undervalued narrative beating Ackman's fraud claims.

But what happened?

Ackman destroyed Pershing Square's Assets Under Management, which went from $20 billion in 2015 to $8 billion in 2018, as losses dragged the fund's performance and investors pulled money out.

Icahn stuck it up to him and made a billion dollars on top of it.

How does that translate to you?

Now you are not Ackman, you are just a railbird cheering for him, and you can say she won't be with a quality man long-term. Still, you ain't banging highly valued stocks (IG Bimbos), you are dealing in Russell 2000s at best (average stock factory chicks) that you think have a better value than what the market has already established, when you are not completely priced out (wanking on porn if your dick still allows it, screaming on top of your lungs that she will hit the wall single and washed up, because you are not invited to the game).

How does that impact your portfolio?

You are not making any money nor losing any money if you are out of the game, aka you are not operating in the dating and relationship market; you are just wasting your time.

You are doubling down on market losses by believing that your opinion matters in how Herbalife will end.

What is the reality?

Herbalife/IG Bimbos operate as such. It is their best chance of landing the bag, no matter how poor the pure economic fundamentals, because it also relies on reflexivity, where general perception drives their demand higher. They can attract the attention of guys they would never have had, had they not marketed themselves in this way.

Their short opportunity window necessitates the sacrifices, and the Ackmans' narrative does not help them. Investors, with more money, champion the life direction they chose until they no longer do (millionaires and billionaires as sponsors). Still, it is up to them to be astute during their few years of fame, such as the 2012-2021 Herbalife Window. Many won't, but it is their best chance.

Hoes and other IG Bimbos is the name of the game, no matter your morals and preferences, as the market defines overall value from market participants (people with optionality), not yours. You can enjoy what you have, but implying you hold the normative truth behind the market is as misguided as Ackman fighting against the market and Icahn.