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