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Non-Tech : PPD (Pre-paid Legal Services) on the move -- Ignore unavailable to you. Want to Upgrade?

To: SC who wrote (768)	2/16/2000 1:10:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 801

that post is very superficial and misses several key points: 1) the company is NOT keeping 78% of its new customers after 3 years the membership fall-out is quite drastic; think of it as compounding in reverse; it took 1.2 million new recruits to get 400k new members as per my previous post; the company uses "persistence" as a measure (because it looks better, when really when you want to know something else - which I've also detailed here before), and your poster bought it hook line and sinker; btw you can watch the advances accumulate on the balance sheet as an asset; how much of shareholders equity is tied up in these assets? 2)the 20-year head start is all hype; as far as businesses go, there is and has been available legal insurance for quite a while; for individuals, the product has not sold through traditional channels; again, I ask you to investigate PPD's alliances with the big brokers; these were much ballyhooed at one point, but now are relegated to footnote status as nonmeaningful contributors; iow, what it takes to sell this stuff to regular people (and low-risk people at that) is a "there's something in it for you besides just the product" approach; i'm not saying the company isn't growing like gangbusters right now; it is, as these schemes always do at some point; i'm just saying the present value of all future earnings is really somewhere around 10, and less than that if management ever decides to load up with debt to force greater expansion; these things tend to burn out like a flame- there's no in-between; it gets shaky, then its gone; i should add, shawn, that your inability to find the numbers that I was quoting earlier -even though they were in the most recent company press release- strongly suggests that complicated insurance pyramid-like schemes should be far back on your list of potential investments; further, make sure you check your private mail for my reply as to my investing style and you being "unconvinced". Good investing, Mike