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

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

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Did you gain value from this article?

With over 9,000 articles online Capitalism Magazine is completely free. We rely on the generosity of our readers to keep us going. So if you already donate to us, thank you! And if you don’t, please consider making a donation today. One-off donations – or better yet, monthly donations – are hugely appreciated. You can find out more here. Thank you!

What do you think?

We are always interested in rational feedback and criticism. Feel free to share your thoughts using this form.

We will post responses that we think are of interest to our readers in our Letters section.

Pin It on Pinterest