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Enron's new clothes

August 20th 2009 07:02
Found this quote recently (Bethany McLean and Peter Elkind, The Smartest Guys in the Room, 2004, p 233): --

What if an analyst tried to get beyond Enron's pat explanation of its business? Executives would imply that they were slow and stupid, and most of the other analysts would agree with that assessment...

Skilling, in particular, was infamous for dividing the world into those who "got it" and those who didn't... Outsiders who came into regular contact with Skilling hungered to be included on the list of those who got it. This was especially true of Wall Streeters, who pride themselves on their smarts. On the rare occasions when Skilling was pressed, he would react with scorn... "He had a good McKinsey trick," says [an investor]. "If you asked a question that he didn't want to answer, he would dump a ton of data on you. But he didn't answer. If you were brave and said you still didn't get it, he would turn on you. 'Well, it's so obvious,' he'd say. 'How can you not get it?'" So the analysts and investors would pretend to get it even when they didn't.


Jeffrey K Skilling



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