Fooling Some of the People All of the Time: A Long Short Story

Fooling Some of the People All of the Time: A Long Short Story

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by David Einhorn
     
 

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In 2002, David Einhorn, the President of Greenlight Capital, gave a speech at a charity investment conference to benefit a children's cancer hospital. He was asked to share his best investment idea, so he did. He described his reasons why Greenlight had sold short the shares of Allied Capital, a leader in the private finance industry. Greenlight bet that the stock

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Overview

In 2002, David Einhorn, the President of Greenlight Capital, gave a speech at a charity investment conference to benefit a children's cancer hospital. He was asked to share his best investment idea, so he did. He described his reasons why Greenlight had sold short the shares of Allied Capital, a leader in the private finance industry. Greenlight bet that the stock would decline because the company's business was in trouble and its accounting was corrupt. Einhorn's speech was so compelling that the next day, when the New York Stock Exchange opened for trading, Allied's shares remained closed. So many investors wanted to sell or short the stock that the NYSE could not balance all the sell orders to open Allied’s trading in an orderly fashion.

What followed was a firestorm of controversy. Allied responded with a Washington, D.C.–style spin-job— attacking Einhorn and disseminating half-truths and outright lies. Rather than protect investors by reviewing Einhorn's well-documented case against Allied, the SEC—at the behest of the politically connected Allied— instead investigated Einhorn for stock manipulation. Over the ensuing six years, the SEC allowed Allied

to make the problem bigger by approving more than a dozen additional stock offerings that raised over $1 billion from new investors. Undeterred by the spin-job, lies, and investigations, Greenlight continued its research after the speech and discovered Allied’s behavior was far worse than Einhorn ever suspected— and, shockingly, it continues to this day.

Fooling Some of the People All of the Time is the gripping chronicle of this ongoing saga. Page by page, it delves deep inside Wall Street, showing how the $6 billion hedge fund Greenlight Capital conducts its investment research and detailing the maneuvers of an unscrupulous company. Along the way, you'll witness feckless regulators, compromised politicians, and the barricades our capital markets have erected against exposing misconduct from important Wall Street customers. You will also discover the immense difficulties that prevent the government from sanctioning politically connected companies—making future Enrons inevitable. This revealing book shows the failings of Wall Street: its investment banks, analysts, journalists, and especially our government regulators.

At its most basic level, Allied Capital is the story of Wall Street at its worst. But the story is much bigger than one little-known company. Fooling Some of the People All of the Time is an important call for effective law enforcement, free speech, and fair play.

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Editorial Reviews

From the Publisher
"Instead of stewing in private, Einhorn wrote a book "Fooling Some of the People All of the Time" about his six-year ordeal with Allied." (Daily Mail, September 18, 2008)

Product Details

ISBN-13:
9780470073940
Publisher:
Wiley
Publication date:
05/02/2008
Pages:
380
Sales rank:
676,563
Product dimensions:
6.20(w) x 9.10(h) x 1.50(d)

Meet the Author

DAVID EINHORN is the President and founder of Greenlight Capital, a long-short value-oriented hedge fund, which started with $1 million under management in 1996. Over the ensuing years, Greenlight has generated greater than a twenty-five percent annualized net return for its partners. Einhorn is the Chairman of Greenlight Capital Re, Ltd. (Nasdaq: GLRE) and serves on the boards of the Michael J. Fox Foundation for Parkinson's Research and Hillel: The Foundation for Jewish Campus Life. Einhorn has pledged his entire personal share of the profits from Greenlight's short-sale of Allied and this book to charity.

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Fooling Some of the People All of the Time 4.1 out of 5 based on 0 ratings. 11 reviews.
Guest More than 1 year ago
Fooling Some of the People All of the Time catalogs the incredible events that followed the author's fast rising hedge fund and the investment community that attacked him after sticking his neck out in a speech. The investment community attached to protect its interests, which provides a good lesson in today's financial crisis. The book gives an informative look at the ins and outs of wall street, and the lengths people there will go to attack companies and individuals who attempt to uncover untoward behavior. It's a very interesting, if detailed, read and necessarily so. As an investor and fan of the financial markets, I don't typically read psychology books, but a colleague passed along The Emotional Intelligence Quick Book to me this week when we were discussing the chaos that has befallen the financial markets of late. I devoured that book! It's really great at revealing the role emotions play in ANY decision you make, and I'm a smarter investor for having read it.
Anonymous More than 1 year ago
Two sides to every story. However, have to admire Mr. Einhorn. Some bad guys in the mix but not all those involved with Allied and BLX deserve to be burned at the stake. If you know any of the players, it makes even more fun reading.
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