David Einhorn

Fooling Some of the People All of the Time

1. IDEA 1

   A speech started a long battle

   Einhorn describes giving a speech at a charity investment conference in which he criticised Allied Capital, a company that lent to small businesses. The speech began a dispute lasting six years.

2. IDEA 2

   He bet against the company

   Einhorn explains that his fund had shorted Allied Capital, betting its shares would fall. He openly admits this financial interest while arguing his criticisms were based on evidence. His fund stood to profit.

3. IDEA 3

   Valuations seemed too optimistic

   Einhorn argues that Allied did not mark down the value of its troubled loans as it should have. He believed this made its results look much better than reality. Accounting choices mattered a lot.

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