How to Avoid Investing in Crooked Businesses

by | Sep 5, 2005 | POLITICS

Reading Kurt Eichenwald’s fascinating book on Enron Corp., “A Conspiracy of Fools,” is enough to make an investor throw up his hands (or his lunch), sell all his stocks and buy a bundle of nice short-term U.S. Treasury bonds. Eichenwald shows, in vivid detail, how Enron executives used every trick, legal and illegal, to display […]

Reading Kurt Eichenwald’s fascinating book on Enron Corp., “A Conspiracy of Fools,” is enough to make an investor throw up his hands (or his lunch), sell all his stocks and buy a bundle of nice short-term U.S. Treasury bonds.

Eichenwald shows, in vivid detail, how Enron executives used every trick, legal and illegal, to display healthy, rising profits each quarter. The business itself meant little to these manipulators. A lust for sexy earnings reports drove the company. Even dispassionate professionals were fooled. At the conservative and independent Value Line Investment Survey, an analyst wrote in late 2001, after Enron shares had already fallen sharply: “We think fears are overdone

James Glassman

Ambassador Glassman has had a long career in media. He was host of three weekly public-affairs programs, editor-in-chief and co-owner of Roll Call, the congressional newspaper, and publisher of the Atlantic Monthly and the New Republic. For 11 years, he was both an investment and op-ed columnist for the Washington Post.

The views expressed represent those of the author and do not necessarily represent the views of the editors & publishers of Capitalism Magazine.

Capitalism Magazine often publishes articles we disagree with because we believe the article provides information, or a contrasting point of view, that may be of value to our readers.

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