President's Message - Cutting Through the Smoke & Mirrors
April 2002

Perhaps we don't face a problem as big as illiteracy or as devastating as world hunger. But the need for overall wellness in our homes is just as vital! People need our products and the opportunity that we can give them.


A few days ago, I was working in my office at home and I overheard the comments from a news program coming from the TV in an adjoining room. Two commentators were talking about a company they said was operating a "Ponzi scheme." The other agreed and added the accusation that this firm had been running a "pyramid scheme." When I heard the terms "Ponzi scheme" and "pyramid scheme" I hurried to the other room to learn more. I assumed that some multi-level company had been discovered and wondered if it was an MLM company that I was aware of, or if it was something brand new.

As I sat down in front of the television the name "ENRON" flashed on the screen. It soon became apparent that the "pyramid scheme" they were referring to was "Enron." For a minute, I could not believe what I was hearing. For my entire life I had heard the term "pyramid scheme" only associated with multilevel companies - never a corporate giant held in high esteem by the financial marketplace. Yet here it was - Enron being called a pyramid scheme.

And I thought to myself, "How appropriate." Indeed, Enron appears to have been exactly that - a pyramid scheme! A company based on "smoke and mirrors." Enron promised its investors huge profits. It fooled everyone! No one could figure out exactly what it did or how it did it. But the analysts were creating a frenzy advising their clients to buy more Enron! Even the employees lost big-time! Everyone was caught up in the frenzy. Over a period of several years the stock went higher and higher until this facade of a company finally hit the end of the road and it fell apart.

Now we learn that really it was all a hoax. There was nothing there! No real profits, no legitimate business plan - even no real products. It was all a hoax! But in truth it was not the first time that Wall Street has been fooled. Eighty percent of the "dot. com" internet companies were also hoaxes. The term "pyramid scheme" would have fit very well describing them, also. They too were "shells of nothingness."

They never produced a real product either, nor did they ever produce any real profits. But in their case, they were open about it. They reported losses year after year. Yet the Wall Street analysts were very hot on almost every dot.com company that had a presence on the Internet They told their clients these companies were great investments. They advised their clients not to worry that there were no profits - and not to worry that they could not really understand the product or business plan. These companies were so "high tech," so "future oriented," so "cutting edge" that normal people should not even try to understand them. But they were "great investments." Of course the truth is they too were built on "smoke and mirrors."

The reason people could not understand the product and the business plan is that none ever really existed. Yet billions of dollars were invested into those companies - people felt comfortable investing into these high tech industry leaders because everyone else was investing in those same companies. And of course, eventually they too came crashing down. They too were nothing more than "Ponzi schemes" or "pyramid schemes." And as a result, thousands of lives have been destroyed, financial empires have been crushed, and as the dust clears, people are wondering, "What happened?" "How could I be so foolish?" "How could I have been fooled so badly?"

I believe it is about time that the financial gurus and the news media realize that fraud and deceits are prevalent in all kinds of companies - not just multilevel It is time that people learn the basics of how to determine a real company from a fake, and determine real long-term potential rather than a short-term fad. It all boils down to a very simple and easy-to-understand concept. Does the company you are investing with have real product, bought by real customers, who really want it? That almost seems too simple, doesn't it? It surely is not a profound concept. But it is as solid as a rock! The fact that you can understand it does not make it any less valid. Real customers, buying real product because they really want it! That is what makes a real company! It should be obvious that companies that have products that the public is anxious to buy have a great future!

For those who want to invest in something solid, a company with a bright future, a company you can understand and that makes a lot of sense, we invite them to invest in Melaleuca. But they do not have to invest their money - just their time. And if they do that consistently, they will reap an amazing return on their investment. It is as solid as a rock - because we have superior products that people need everyday! There are no smoke and mirrors. Just real people, buying really great products because they really want them. Go ask your financial analysts about that concept. It will blow their minds!

Sincerely,

Frank

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