How to Avoid Investing in Crooked Businesses

by | Sep 5, 2005

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

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James Bovard is the author of ten books, including Public Policy Hooligan, Attention Deficit Democracy, The Bush Betrayal, and Lost Rights: The Destruction of American Liberty. He has written for the New York Times, Wall Street Journal, Playboy, Washington Post, New Republic, Reader’s Digest, and many other publications. He is a member of the USA Today Board of Contributors, a frequent contributor to The Hill, and a contributing editor for American

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