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Fooling Some of the People All of the Time, a Long Short (and Now Complete) Story, Updated with New Epilogue

4.01  ·  Rating details ·  3,447 ratings  ·  156 reviews
A revealing look at Wall Street, the financial media, and financial regulators by David Einhorn, the President of Greenlight CapitalCould 2008's credit crisis have been minimized or even avoided? In 2002, David Einhorn-one of the country's top investors-was asked at a charity investment conference to share his best investment advice. Short sell Allied Capital. At the time, ...more
Paperback, 426 pages
Published December 7th 2010 by Wiley (first published May 27th 2007)
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Jon
Jul 23, 2012 rated it really liked it
David Einhorn manages a hedge fund whose strategy partly consists of pinning incompetent or fraudulent companies and betting against them. This book centers on his fight with Allied Capital, one of the fraudulent companies.

Fraudulent data turns Einhorn on like a full-fledged disco party turned on the Bee Gees. Seriously, you can feel his excitement about the numbers bubbling over on every page, and, to be honest, much of it is skim-worthy. Because it's just data data data.

And still, this book h
...more
Jacob
This is either a very in-depth case study or a tedious recounting of someone's side of the argument in a years-long battle to expose a company's wrongdoing, depending on whether or not you are interested in the topic and very familiar with how businesses and investing work. It's the story of a battle between a hedge fund manager who short sold a company's stock and publicized it and that company's reaction. The author is extremely detail oriented, which means that every time the company fails to ...more
Max Stone
Aug 26, 2008 rated it it was ok
I'm a big fan of David Einhorn, both his investing skill and his integrity. And I'm sure he is somewhere between 90% and 100% right on his fight with Allied Capital. But in general, what is the purpose of reading an extremely detailed account of a years-long scuffle between two parties which is authored by one of the parties. A book like this just cries out to be written by a third party. It might say exactly the same things, but it would be different coming from someone not in the fight.

Also i
...more
Alex Song
Jan 27, 2018 rated it it was amazing
Jesus Christ.

This book is so good. Who knew David Einhorn was such a beast at writing? This is investing at its best. Unfortunately the outcome wasn't a quicker/cleaner one.

This is a must-read if you are interested in:
- hedge funds
- short selling
- investing in BDCs and specialty finance companies
- what a shithole various US government agencies are

My version of the book was old and didn't have the epilogue... but the TLDR is basically: Allied Capital went BK and was acquired by Ares. BLX is still
...more
Steve
Jan 30, 2012 rated it liked it
Shelves: investment
This book is really two disparate parts welded together.

The first, quite enjoyable, section of the book describes Einhorn's start in the hedge fund business. If you have an interest in fund management, you'll get a lot out of how he put his first fund together and quickly rose to prominence with spectacular performance out of the gates. The book provides a detailed behind-the-scenes narrative on his early investment decisions and how each investment unfolded in the context of the overall fund. T
...more
Seth Spearman
Aug 10, 2012 rated it really liked it
Shelves: economics, politics
I loved this book.

This book is not just a book. It is a public service. It is very eye-opening and disheartening and heroic look at corporate greed, market manipulation, colossal regulatory and media failure, all at the same time.

If you have a naive view of the virtue of the free markets, especially as they exist in the form of publicly traded corporations, and you don't want your naivete spoiled, then don't read this book. This is a story of a real stinker of a publicly traded corporation, Alli
...more
Rick
Dec 29, 2010 rated it it was ok
Shelves: finance
It started out so promising... The first 50 or 60 pages are really great. They lay out a classic David v Goliath tale of an investor who is challenging a large and successful company with the belief that the company is engaging in accounting fraud. The challenge, raised by the author as CEO of hedge fund Greenlight Capital is one of the classic tales in hedge fund lore where a company goes out of its way to attack and discredit an individual. Einhorn, who was betting against the company, spent t ...more
Loh
Jan 12, 2018 rated it it was amazing
To some, David Einhorn presents a convoluted argument regarding Allied Capital (the book essentially is a 400pg short investment thesis) - but I think if one takes the time and effort to digest and follow his train of thought (and read up on accounting theory), Einhorn's tenacity, intensity and research prowess shines through.

He is incredibly thorough and detailed about the financial shenanigans that Allied Capital engages in, and to aspiring securities analysts, there is no better example for
...more
NeeOn
Oct 11, 2020 rated it it was ok
1 man's multi-year short-sell crusade against Allied Capital. I get it, short sellers are a necessary part of the system. I guess this woulda been more interesting if I was US-based as the intricacies involved were eye opening but US-centric. ...more
William
Dec 15, 2020 rated it liked it
Starts off pretty interesting, setting the landscape for how the business models work etc and how the fraud is enabled to happen.

But then proceeding to spend 100+ pages describing asset/investment write ups and write offs/downs is not particularly interesting, not that useful and not much of a learning point.

All boils down to ... “when loans are unrecoverable, the prudent thing to do is write them off”
Ektor Nikolinakos
Jan 19, 2021 rated it it was amazing
eye-opening
Zhou Fang
Mar 29, 2018 rated it really liked it  ·  review of another edition
Shelves: investing
David Einhorn is not only a hedge fund manager with an impressive track record, he is also an incredibly clear writer. Fooling Some of the People All of the Time is a book that reveals much about both his investing process in general and his experience shorting Allied Capital in particular. Despite his ultimate success in shorting Allied Capital, Einhorn's story strengthens my conviction that investors should stay away from short selling.

Greenlight's investment process could be described as sim
...more
Brandon
Oct 29, 2012 rated it it was amazing
I get a lot of books handed or recommended to me, most of which seem to miss what I actually enjoy in books. This one seemed one of the most egregious examples; a book about details behind short selling positions and market failure. Queue the confetti. While I had enjoyed Einhorn's takedown of GMC, this didn't seem like it would do anything for me.

I was wrong.

Halfway through, I had to stop and thank my friend for the recommendation. This is an interesting inside view of corporate (dys)function a
...more
James
Mar 29, 2011 rated it liked it
Shelves: life-in-amerika
A rather dry book, the author is right about the accounting games at Allied,
but he uses most of the book repeating particular ideas.

The book was written before the story ended.
See wiki http://en.wikipedia.org/wiki/Allied_C...

For the last word.

Allied wasn't a total fraud like Enron or global crossing,
but the people in charge goosed the accounting to make their pay and bonuses bigger.

In the end the company was sold for $5 a share in 2010,
down from the $26 when the author started battle with ma
...more
David Ball
Sep 04, 2011 rated it really liked it
The version I read of this was published in 2008, just as the financial crisis took off, and while I very much enjoyed the story, I wasn't happy with where Einhorn chose to stop writing. Being a trader, I was vaguely aware of how the Allied story ended, and if ever there was a book that needed an epilogue it was this one. But how the story unfolded was fascinating - you could almost call this an "accounting thriller". I'm shocked that it took six years for the regulators, media, and investment i ...more
Carson
Jun 25, 2008 rated it it was amazing  ·  review of another edition
Recommended to Carson by: Paul
Great Book! This story demonstrates primary research in an investment setting at its best.

Also, this is a great example of what happens in big government (the Small Business Administration in this story). “Let’s give career Washington-types billions of dollars and measure them on how well they are able to spend it! Let’s not hold them accountable for how well the loans ultimately perform.”

Also, for the company in questions, they should “bribe,” I mean give campaign contributions to, the politici
...more
Matt
Sep 25, 2008 rated it it was amazing
Shelves: read-it
Just finished this the other night. Unless you are interested in finance and investing, it may bore you.
However, I really enjoyed it. I respect Einhorn a lot and have read the excerpts from other speeches he has given.
This book further fuels my anger towards the management of large companies, who recognize fraud or stretching numbers, or at the very least improperly accounting for valuation and revenues, as merely a hurdle to increased profits. It also made me angry that he basically gift-wrappe
...more
Laura Gembolis
Jul 06, 2009 rated it it was ok
While the big message in this book is good, it's delivered much like someone who's been wronged and takes it personally by documenting every single transgression against him. This leads to a very accurate book with much documentation - transcripts, letters and news articles. Put another way: good for facts - bad for storytelling. The story would have benefited from setting a larger context of fraud. I think it would have been stronger from someone not so close to the subject. Or a stronger edito ...more
Ngee Poo
Jan 02, 2015 rated it liked it
The book's essence, and the unfavourable economics of short-selling in general, can be summarised by the following quote:

"...Allied is just one position in our portfolio. But, for the company and its management, it is the whole ballgame, so they will say and do things we wouldn't consider doing in order to win."

...more
Thomas
Sep 12, 2014 rated it it was amazing
Indispensable for people wishing to experience dishonest corporate culture.
Rodney Royden
Mar 31, 2018 rated it it was amazing
Absolute must read - especially for anyone considering a career in business and politics.

In short, basically a book about a dispute between a short-seller (Einhorn)* who shorted a company that he believed was fraudulently misrepresenting the numbers to mislead the public (Allied Express.)

Einhorn lobbied using evidence and tenacity but his viewpoint was shot down repeatedly by the media and the government (without obvious transparent reasonable inquiry into Einhorn's claims.)

* I hesitate to simp
...more
Carlos Salas
Jul 16, 2020 rated it it was amazing
I read this book when first published and think it was one of the best publications covering short-selling while delivering an entertaining tale. The book is a first-person description of the first years of David Heinhorn's Greenlight capital hedge fund following a long-short strategy with a dedicated value style. It covers several chapters, being Allied Capital and Lehman brothers among the ones that really occupy more pages.

Some good ideas that allow me to develop my shorting style were to wat
...more
Ole Christian
Sep 30, 2020 rated it it was amazing
Einhorn has written a facinating, detailed and well-evidenced summary of the events that led up to the final collapse of Allied Capital, an investment company. It reads like a detective story, and Einhorn has done well in explaining all topics covered in an easy-to-grasp way, so that anyone can read the book. 

In the book's summary Einhorn elevates the lessons learned from the Allied story to valuable lessons for business management, politicians, regulators, retail and institutional investors, ac
...more
Sergiu
May 31, 2020 rated it really liked it
How would you like a corporate fraud saga presented to you? As a Hollywood drama, Netflix a documentary, a journalist-written novel-style book, or the a details-rich diary of the main actor.
This book falls in the last category - an in-depth review of a fraud story (that most of us never heard of) told by the investor who raised the red flags on Lehman brothers.

Be prepared for the book to get technical, in a very non-best-seller manner. You would almost not expect anything else from someone who
...more
JDK1962
Oct 15, 2017 rated it really liked it
I read this on the heels of watching the second series of the Showtime drama "Billions" (a guilty pleasure), and while not as compelling as the tales of Axe Capital, it's still a fascinating, outraging tale. It boggles the mind that you can lay out a case of (at best) improper accounting, and all of the responsible regulators feel free to shrug it off. I felt at the time that SEC Chairman Christopher Cox was completely worthless--a prime example of a regulator who was actually against any meanin ...more
Dio Handoyo
Dec 18, 2019 rated it really liked it
A great text on how the financial system, as a collective of its individual institutions, might still fail to enforce the rules of the game even when accurate financial reporting is for its own good. Beyond the fact that the subject is highly complex (and dry), the conflict of interests plaguing the system were plenty abound. Conflicts affecting sell-side analysts, the media, even regulators (driven by politicians' funding sources) are well-understood, but it is another thing to hear accounts of ...more
Vasco
Apr 24, 2020 rated it it was amazing
Wow, looking at the start and end dates, it almost seems like I couldn't have just taken one and a half months to finish this book.

The bad: nothing in particular. Einhorn's communication style is very logical and objective. Compared to a similar book, Confidence Game about Bill Ackman and MBIA, it does seem a bit less sexy and a bit more "boring", but maybe to a finance expert it actually seems even more down to detail and rigorous. The accounting of events is excruciatingly detailed.

The good: d
...more
John
Nov 18, 2020 rated it it was amazing
A tour-de-force by one of the greatest investors of our generation, David Einhorn chronicles his treacherous journey that is both both investment analysis and a moral tale. I liked the former much more than the latter, whilst acknowledging that both elements complement each other. The concepts in this book are fairly advanced and are, in my opinion, not suited to a beginner or someone without financial training and experience. However, should you be able to decode the numerous acronyms, analytic ...more
Kristjan Velbri
Jul 09, 2017 rated it liked it
An historic account of how Einhorn shorted a stock and then went through the lengthy process of proving that the company was in bad shape. When everyone has a vested interest in looking the other way, it can be difficult to prove that a company is mismanaging its finances and lying to its customers. That is exactly what was happening and the company deserved to be shorted. The read itself is full of minute details, hence it takes some focus to chew through this interesting, but at times a little ...more
James K Worswick
Jul 03, 2019 rated it did not like it
Shelves: abandoned
The first part of the book was good.

Note that I bought this book in hopes that I would learn some techniques on how to spot companies that are dishonest to their shareholders. I got a few information, but most of the book felt like it was either trying to be a mix between story telling, informative and a rant.

Unfortunately, I got very few points from this book because the book was written (and structured) very poorly. The information inside this book is not friendly towards people who have no ex
...more
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