EagleOne wrote:Rod and Barry are both friends of mine. It truly pained me to see what Barry did, but he is still my friend and always will be. Just as it pained me to see what Rod has written, but he is still my friend and always will be.
Just my two cents worth.
Loyalty to friends is a good thing. And your two cents are always welcome here, Lynn.
I don't know either Minkow or Cook. But, from what I know of them, I don't think I'd want to.
Minkow: As I wrote above, I've represented plenty of con men. A couple became friends of mine following the representation. Those two guys are smart and funny - terrific company over a beer or three. That's one of the things that made (hopefully not "makes") them successful con men. But, for guys like these, the con definitely has a life of its own. They get a high from running it, similar to what you see in "The Sting". I doubt that either would set out to con me, but my experience would not let me bet on that.
Cook: How does he make his money? Well, he tells you: "Our Golden Word Helping Good Folks make money". His "golden word" consists of books and paid subscriptions on MLMs. Suppose the odds are overwhelming that none of them will help "good folks" make what they can at the counter at Mickey D's. How is Cook different from the ripoff MLM "tools" business? They both advertise that, for a fee, they will help you make money in a business in which it is all but impossible to make money without being on the top of the pyramid. What does that make Cook?
I keep coming back to the findings of the British court as to Amway, the granddaddy of all MLMs. Yes, it's legal. But:
the reality of the Amway business is that the nature and rewards of becoming an IBO and participating in that business are such that only a very small number of IBOs make any significant money from their participation. In fact, the substantial majority of IBOs make no money and indeed by reason of their payment of the registration fee [£28] and the annual renewal fees [£18], lose money from their participation…For the period from 2001 to 2006 (a) 95% of all bonus income was earned by just 6% of the IBOs; and (b) 75% of all bonus income was earned by less than 1.5% of IBOs. In 2005-2006 there were 39,316 IBOs who shared a bonus pot of £3.427 million. But of this total, 27,906 IBOs (71%) earned no bonus at all, and 101 IBOs (0.25%) shared £1.954 million between them. That leaves a group of 11,309 IBOs to share a bonus pot of £1.473 million. Within that category there was a group of 7,492 IBOs…who between them shared £101,400. This gave them an average annual bonus of just over £13.50, a sum less than the annual renewal fee of £18.
The picture can be presented in a variety of ways: but it is consistent. Between 2001 and 2006 the proportion of IBOs not earning any bonus income varied between 69% and 78%. In year 2004/5 only 74 out of 24,342 IBOs earned over £10,000 by way of bonus. In that year only 4,076 IBOs earned enough bonus to cover the annual renewal fee: 21,266 did not even cover their most basic running cost from bonus payments (though there may be retail margin).2 If very modest business expenses are factored in (say £100 on petrol or the purchase of BSM) the picture is even starker with only 1,820 IBOs making sufficient from bonus payments to cover those expenses and 23,521 IBOs failing to do so. In the period from 2000 to 2005 Chris and Sharon Farrier’s bonus income ranged from £21,495 to £7,971 and averaged £12,850. Over the same period Dr Anup Biswas ranged from £137 to £433 abd averaged £306. These are the people whose testimonials said respectively that they were earning “the equivalent of good executive size income”, or was deriving an income that “continue[d] to climb to replace my full professional salary”.
Only one in fifteen made enough to cover expenses. Given those numbers for the industry's poster boy, how can someone in good conscience charge for "helping good folks make money"?