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

Product Description

A rare look inside the world of hedge funds from one of this country’s top investors

David Einhorn is one of the investment community’s fastest rising stars. He founded his hedge fund, Greenlight Capital, at the age of 27, and now has $5 billion under management. In Fooling Some of the People All of the Time, Einhorn offers readers insights into the battles surrounding hedge funds.

In 2002, Einhorn spoke publicly about Allied Capital–a leader in the private finance industry–presenting it as an excellent short opportunity. This book will describe the incredible events that followed Einhorn’s speech and how Allied and the investment community attacked him to protect the company–and its stock price. Informative and intriguing, Fooling Some of the People All of the Time details how the current environment on Wall Street not only allows for such behavior, but how it protects the companies and attacks those who attempt to uncover them.

Product Details

Amazon Sales Rank: #965 in Books
Published on: 2008-05-02
Number of items: 1
Binding: Hardcover
380 pages

Editorial Reviews

From the Inside Flap
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.

From the Back Cover
"This book is a must-read for any investor who wants to know how far some companies will go in their quest to keep the real story from coming out."
—Herb Greenberg, Senior Columnist, MarketWatch.com

"In Fooling Some of the People All of the Time, David Einhorn, one of the great investors of all time tells one of the great investment tales of all time. This is a book in which you will learn about investing, short selling, and the politics of business. David is not only a great investor, but a wonderful storyteller. I recommend it wholeheartedly for your brain and your pocketbook."
—William A. Ackman, Pershing Square Capital Management, L.P.

"In the world of finance, as in the worlds of politics or science, free speech and open debate are essential. Sadly, our current system is rigged against bearers of bad news, and short sellers are an oppressed minority. David Einhorn's amazing story of scam artists, corporate doubletalk, clueless regulators, and sleazy lawyers is a gripping narrative. A great read."
—Owen Lamont, Fellow, International Center for Finance, Yale School of Management

An unscrupulous company has cost the U.S. taxpayers hundreds of millions of dollars. As it has happened, our government regulators have been at best derelict and at worst complicit. The company is headquartered in the political power center of Washington, D.C., where it has established enormous influence that has protected it. It is a large customer of Wall Street, which predictably lends it strong support.

In Fooling Some of the People All of the Time, David Einhorn—founder of the successful hedge fund Greenlight Capital—takes you on a fascinating journey that begins with his discovery that Allied Capital's accounting appeared corrupt. This led to Einhorn describing his hedge fund’s short position in the company at a charity speech (go to www.foolingsomepeople.com to watch), and what follows is a battle for the truth that continues to this very day. The story would make for a great forensic financial mystery novel—except it’s all true.

If you think we're past the days of corporate corruption and financial fraud, think again. Fooling Some of the People All of the Time details the harsh reality of how the current environment on Wall Street not only allows for such behavior, but how it protects the companies that participate in such activities and attacks those who attempt to uncover them. This is a story about investing, business ethics, and how our government should—but often doesn’t—protect investors and taxpayers.

About 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.

Thursday, August 14, 2008