Fooling Some of the People All of the Time: 8 key ideas
The core ideas of Fooling Some of the People All of the Time, each in under a minute, written in our own words. Want the full depth? Get the book.
- IDEA 1 OF 8
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.
- IDEA 2 OF 8
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.
- IDEA 3 OF 8
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.
- IDEA 4 OF 8
The company fought back
Einhorn describes how Allied attacked his motives and denied wrongdoing.
He also describes efforts to investigate him and other critics, which he found deeply troubling. The tone of the dispute was bitter.
- IDEA 5 OF 8
Government-backed loans raised concerns
Einhorn describes problems he found at a subsidiary that made loans backed by a government small-business programme.
He argues that losses fell on taxpayers. Some phone records were obtained improperly.
- IDEA 6 OF 8
Regulators were slow to act
Einhorn criticises regulators for taking little action despite the evidence he presented.
He argues that they sometimes seemed more suspicious of critics than of the company. He found this frustrating.
- IDEA 7 OF 8
Short sellers can expose problems
Einhorn argues that short sellers, often seen as villains, can help markets by uncovering wrongdoing.
He sees their research as useful, not harmful. Critics of short selling see it very differently.
- IDEA 8 OF 8
Persistence came at a cost
Einhorn describes the time, money and stress the fight required.
He presents the story as a lesson about how difficult it can be to challenge powerful companies. Being right was not enough.
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