This is an investment book that should not be missed (as long as your accounting and financial analysis skills are well-honed -- the critical analysis is detailed). This would be excellent reading for a CFA/MBA/CPA.

David Einhorn writes the detailed story of his investigations into malfeasance at Allied Capital. He makes the case, with all the back-up detail, that this company is essentially a "Ponzi" scheme (like a financial chain-letter). Allied books SBA (and other Federal Agency) guaranteed loans, violating origination-risk criteria, front-ending income, managing and delaying loan write-downs while inflating earnings on the pretext of lack of objective value impairment (though they do manage to write-down their equity investments earlier!), increasing portfolio size which hides higher bad-debt experience on seasoned loans which they do not disclose, and distributing capital (if the accounting had been more conservative) through increasing dividends funded by new equity. All this, as well as documented fraud.

These technical details and analysis are worth the price of admission alone. However, the most frightening thing about the book is the lack of interest in the Allied malfeasance shown by the SBA and the SEC, Congressional oversight committees, sell-side analysts and journalists, all for their own self-serving reasons. If you had any faith in government by-and-large acting in our best interests before, this book could well destroy that act of faith.

As well as the Allied Capital story (most of the book), the early chapters describe how Greenlight Capital (David's Hedge Fund) works. That's a fascinating revelation in its own right. What is most impressive, though, about the book is the quality of analysis David has done. Why are Hedge Funds who sometimes run short-positions so reviled these days by regulators? David is anything but a shoot-from-the-hip trader, neither is there any indication whatsoever he is trying to manipulate the market in Allied stock with rumours (everything is backed up with hard evidence and detailed analysis). By the way, David is the person who publically took on the ex-CFO of Lehman and won. If you are a financially sophisticated shareholder in Allied Capital, please do read this book -- you most probably won't be afterwards.

At the end of the book, I was left with one puzzling question: why has David devoted so much of his time to researching and telling this story (early on in the events, he even says he thought of quitting because it was becoming so time-consuming)? It's almost as if he is now a dog with a financial bone and just can't let go any more. Admittedly, he's doing us all a big favor in the process (and has agreed to give any proceeds from his short position to charity, so he has no personal conflict of interest).

If anyone from the management of Allied Capital or SEC enforcement reads this review and thinks of bringing a lawsuit, do think again. I am only summarising David's book, which is in the public domain, and I never have had, neither do I, nor will I ever have any position in Allied Capital's stock. But then, of course, as David makes the point near the end, the SEC only seems to be interested in high visibility enforcement when a big company has actually failed (Enron, Worldcom), unlike Allied Capital (yet!), or it involves a well known figure (Martha Stewart). Where is the justice that we are all supposed to put our faith in?

Many congratulations, David. I hope there can be more financial books of this quality in the future.

David Einhorn has given us a remarkable gift in this book. The work that he does each day, and which he has so carefully and capably revealed in detailed and documented fashion in this book, provides immeasurable benefit to each and every one of us every single day. I am sincerely grateful to David Einhorn for his relentless effort to hold the misbehaving stewards of our wealth and resources accountable for their misdeeds. It is an added bonus that he decided to devote a significant amount of his valuable time to providing this account of his work and his discoveries of the behavior of the many other players in the Allied fraud case.

Since their arrival, hundreds of years ago, the capital markets have evolved organically as generations of humans have gradually built the markets to transfer the ownership of the world's resources from the few, privileged families who once controlled the world, to the many. In the process, these markets have improved the visibility and transparency with which we are all able to observe, understand and influence the critical decisions which result in the eventual allocation of resources. As a result, the improvement in allocation of resources toward serving us all as individuals has delivered previously unimaginable improvements in human well-being and freedom from oppression and exploitation by those few at the top of the pyramid. And yet, while these improvements are real and remarkable, the progress made possible by the organic evolution and functioning of these capital markets continues to be held back by people who claim to be protecting us and serving us.

I've long wondered whether those people, who work in the many organizations and agencies identified in this book, are inherently 'evil' and desire to prevent humanity from obtaining the benefits which could be made available to all by enabling the ongoing development and expansion of capital markets in the developed and undeveloped world as they regulate the few who seek to control and regulate the many, or are simply 'clueless' and fail to understand and recognize the role that capital markets play in bringing these benefits (in spite of overwhelming evidence visible to anyone who travels from the developed (where capital markets have grown and evolved) to the undeveloped countries (where the power-hungry have successfully fended of the organic development and influence of local and international capital markets)). With this book, I now see that it is a combination of both, but there is much more of the former behavior than I suspected in the journalists, analysts, regulators, supervisory organizations, and throughout the government in the USA.

Given the evident greatness of the US economy and society in relation to so many other countries, I can only conclude that these problems are even more pronounced in many other countries. Only by exposing this behavior, and demonstrating how it undermines the functioning of the capital markets upon which so much of our modern material well-being depends, can we hope to continue to progress and enjoy the phenomenal benefits that await us as these markets deepen and improve. David Einhorn's contribution to this ongoing improvement is enormous, and yet will go almost entirely unnoticed by the billions of beneficiaries of his efforts. Even more unjust, a very vocal few of those beneficiaries will continue to declare him and other similar hedge fund activists to be the villains, while they themselves hypocritically work against us all in the name of 'protecting' us.

(Typed on a phone, please excuse the typos)

The book is really close to being 2 or 3 books in one. Initially heard about the book in the WSJ, I pre-ordered it on Amazon and took a few weeks to read.

In the first part Mr. Einhorn writes several chapters aimed at a non-professional investor to build the background of how a hedge fund invests, building the reader's knowledge from zero to fluent enough to understand the book. There's a glossary in the back of the book to refer to if you forget any of the terms. In fact, later on Mr. Einhorn's open and full disclosure of his investing philosophy, technique, and results contrast with those of Allied Capital and its collection of LLCs.

The second part of the book builds from a small trickle to a river of fraud, and frankly this is the hardest part to get through. You're directed to watch Mr. Einhorn's speech on the web in order to understand a dissection of reactions that follow, and I admit that I felt as if I was reading a story from somebody who was picked on too much in the schoolyard and is taking revenge by writing a book. As I kept reading the chapters the story suddenly took me by surprise (around P.200 or so).

It then becomes a story of how, if you were to implement a business poorly and needed to keep it going no matter what, you would do whatever it took to keep paying a dividend to keep your stock from tanking. You might start by fibbing on the health of the business one year, sell healthy companies to hide your true results a few years later, and start directing campaign donations to the right parties a few years later. In for a penny, in for a pound. Mr. Einhorn didn't mention, but in years past I have read, that Enron kept going for so long because they did a good job spreading their money around to both the politicians and the local community. Mr. Einhorn does mention how much many parts of the US (Wall Street, the various parts of government, and mom-and-pop investors) want to continue the company so as not to lose whatever interest they have vested into the company or system.

In the end I feel educated about his hedge fund, I feel in over my head on how to value a company's investments if the company is similar to Allied Capital, I feel a bit angry on how narrow the scope and small the punishment delivered (but not surprised - I've seen how narrow the scope of investigations of companies are before), and I feel that Mr. Einhorn has, for lack of a more subtle way of putting it, wasted enough of his life worrying about this company. You're not going to get back the years you've spent. You should go on to enjoy something else in life (but I appreciate the sacrifice you made so I could read about this in a book).

Wow, what an eye-opener to the inner workings of the establishment and the corruption, fraud, theft, politics, & incompetence running throughout the system. David does an excellent job of walking you through his incredible fight with the establishment, based on his analysis of Allied Capital which to this day has not ever really questioned or tested his facts. Like they say all good frauds must eventually come to an end, having finished the book I was not surprised to find that Allied's corrupt management team lead the entire flock of sheep over a cliff in a disgusting act of pure greed. Mr. Einhorn's analysis has proven to be more than accurate.

What is surprising is that Allied's Management, Allied's Board of Directors and key government employees are not serving long prison terms for their fraud perpetrated on the American public and the American taxpayer. This emphasizes the distinction between regulations and regulators, the regulators (surprise) are totally inept at performing the most basic of job functions in jobs that we the taxpayers fund. Apparently if you're connected on Capital Hill operating a ponzi scheme in the light of day isn't a problem provided you tithe blood money to politicians

Allied stole hundreds of millions of your tax money, paid themselves handsomely, funded political contributions and broke every rule in the book while also stealing billions of dollars from investors. Raising new money from investors to pay dividends because you're operating business (Allied) can't generate enough operating cash flow is a pure crime no matter how you twist the story against Einhorn's position. I especially liked how management orchestrated the company to purchase employee stock option awards while purposely delaying bad economic news so they could execute the extraction of money before things went bad - pure manipulation. Now I know for sure that Martha Stewart got a bad deal compared to these crooks. If you invert the story it's a guide book on how to openly steal millions and get away with it. SOMEBODY in Washington needs to take action and punish the evil doers.

If you're interested in investing, politics, or the basic freedoms afforded in the United States you MUST read this book. You wont be able to put it down, Einhorn's analysis has proven to be 100% accurate and then some (google Allied acquired by and see for yourself the carnage this management team left in its wake). WARNING - it will make your blood boil and you will likely loose faith in the American political system while learning how defunct our regulators really are at doing their job. This does not bode well for Fin-Reg, or regulation in general. As you will learn, regulations (or lack thereof) are not the problem, it is the regulators that pose the biggest threat and I'm afraid that isn't likely to change any time soon. A blatant FRAUD of epic proportions, you wont believe what you read.

Thanks to David Einhorn for having the courage and stamina to fight the good fight for our freedoms and for protecting the health of our economic markets. Whatever money you made shorting Allied wasn't enough in my opinion.

As usual, this review as posted elsewhere, which is why at the end there is a reference to Amazon...

There's a bit of background on this book. I have been in communication with the author for several years and recently had occasion to spend an hour chatting with David and his wife in person. I found him remarkably direct but with a tinge of somebody who is being deposed. You could really sense the persona and the care with which he articulates his ideas, a persona that garnered him an 18th place in the World Series of Poker. I read his book less out of interest in the content than out of interest in the author. With that said, it proved to be an amazing tale.

Einhorn describes in compelling detail an approximately eight year battle with the management of Allied Capital, a financial institution with protocols and a code of ethics you expect from the mob. The story offers an insightful, oftentimes gut wrenching, view of corruption and incompetence that permeates the financial system, regulatory agencies, government, and, possibly most of appallingly of all, the journalists. One is struck by the profound thoroughness with which he analyzes a company before taking a position (long or short). You see how the pros really do it. The executives of Allied were complete weasels, but it doesn't stop there. The Small Business Administration (SBA) aggressively assisted in the coverups to hide their own incompetent handling of billions of dollars. The SEC, run by the always incompetent Chris Cox, did nothing. It's worse than that. They obstructed the investigation the whole way. One of the primary investigators who took a detailed deposition from Einhorn, soon thereafter quit the SEC to become a lobbyist for--wait for it--Allied Capital! The guy should be in jail. Although Einhorn senses near the end of the battle that the DOJ is finally going to extract the pound of flesh, the DOJ backs away and settles for peanuts. Einhorn is exhonerated completely at the end as all the facts come out, but it is a Pyrric victory in that there are almost no consequences to the perpetrators. Einhorn tries to conclude on an optimistic note, but he doesn't seem to believe it. One can't help but wonder if the only solution will be a crisis so profound that the pound of flesh will be given up literally not just figuratively. Einhorn clearly notes that another crisis is due. You certainly have no trouble imagining how Madoff got away with his Ponzi scheme.

As an aside, Fama's efficient market hypothesis takes a severe beating. At the opening of the book you are presented with a stock chart of Allied over the course of the battle. Despite the well orchestrated hatchet jobs against Einhorn appearing in the press, the stories of fraud and corruption are slowly working their way into the public's view. The result is a steadily rising stock chart, which only gives way as the financial crisis begins to rage.

You get a sense of Einhorn's view of his role in society: Einhorn promised at the Ira Sohn Conference in 2002 that he would donate half of the proceeds to a children's hospital. As the case drags on, he drops a chunk of change on them anyway. By the end, he and his partners at Greenlight capital donate all of the proceeds to charity. For them, the multi-year struggle is profitless.

As usual, I ran over to Amazon to see what the comments say, paying particular attention to the one and two star ratings. There were surprisingly few bad ratings. One pointed out that Allied's hefty dividend checks don't lie and that Einhorn's "bear raid" is just that. This reviewer appears to not understand that a major part of the fraud was perpetrated against the tax payer by getting payments for Federally-backed loans gone bad.

I picked this book up as a light summer scandal read and it turned out to be anything but. This is a tremendous book. As someone with limited knowledge of the world of investing, I was a bit behind the curve in muddling my way through what is a very complicated story told using the language of the world of finance, but the author took the time to explain the concepts he used throughout and I learned an incredible amount from this case study. I imagine it will be one used in many academic Business/Finance classes. The best part of the book is that it paints a very vivid picture of life on the "inside" of the world of finance to a broad audience that typically is limited only to an outside perspective. However, the story is quite unsettling as it presents a scenario where the system (SEC, the media, Department of Justice, etc...) fails to protect investors and taxpayers and instead looks the other way while politically well-connected corporate bigwigs work the system and amass millions in part by defrauding said investors and taxpayers. I came away from the story depressed and appalled but ultimately with a better understanding of some of the reasons the country is likely facing the mess we are today. Are you a taxpayer? Do you have a bank account, an IRA a 401K or plan to fund part or all of your retirement through some sort of investment? If so, you will benefit from reading this book. Bottom line, it's not an easy or pleasant read, but it's a must read. Think of it as a good investment. :)

The book is a interesting story of how a public company, Allied Capital, chose to fight transparency and misrepresent its financial position in an extreme fashion to inflate its stock price. In Fooling Some of the People All of the Time, the tenacious hedge fund manager turned author, chronicles his fight to expose the fraud while detailing the unresponsiveness of the authorities. The book serves a purpose in outlining Allied's questionable activities but most readers won't benefit from pouring over the level of detail provided. In my opinion, the true objective of this book was to satisfy the author's desire to show that he was indeed correct in his battle with Allied despite the fact the CEO and CFO were never charged with any wrongdoing. Its entertaining nonetheless.

Like many books, Fooling Some of the People All of the Time is actually many stories in one. The main theme maps out the labyrinthine fraud perpetrated by a business development company and its portfolio companies. Parallel to this story, is the saga of a hedge fund manager who clung to his short investment in Allied for an amazing amount of time -- several years. At the same time, he had to confront incompetent regulators who turned their attention to him, his fund and its short selling activities. With the smell of a grand conspiracy theory, the author describes a series of questionable events across several agencies that suggest key government personnel were not doing their jobs.

Einhorn deserves a great deal of credit for tenaciously sticking with his convictions. Yet, the story could be shortened significantly without sacrificing much of the crucial content. Personally, I would love to see more stories of corporate fraud like Fooling Some of the People All of Time.

This book is about the 5-7 year process of how Einhorn's hedge fund legitimately and correctly shorted Allied stock because of ongoing Allied fraud, and how Allied--against all reasonable odds and expectations--continued to exist, to fight back, to slur Einhorn personally, and even to continually raise more more by issuing millions and millions of new stock for years, until it finally died.

Really, it's hard to believe in a rational finacial regulatory system when you read a book like this. It blows your mind, like the Markopolos book No One Would Listen (Bernie Madoff). In both cases, you have people (Einhorn and Markopolos respectively) working for YEARS on their own dime, to collect and prepare incontrovertible evidence of ongoing fraud, preparing hundreds of pages of documentation, literally serving up the cases to the SEC and other regulatory agencies, only to be ignored. You can't help but conclude that politics and incompetence both trump rationality, honesty, and responsibility in regulatory agencies.

Having talked a bit about the overall story, here's a bit about the content. Einhorn's book is packed full of accounting and regulatory details -- page after page of paragraphs of quotes and excerpts from legal proceedings, letters, recorded investigations, and so on. This is what makes the book so tedious to read; it's like you're doing jury duty on a hard chair in a hot trial room without air conditioning, day after day, unable to escape, hoping for a faster pace or a more interesting narrative, but it never arrives.

As a writer, Einhorn had me convinced of the overall story, the evil of Allied players, the rampant incompetence, corruption, and irresponsibility of the (many) regulators, and of the inevitable conclusion -- all within the first chapter or two. The rest of the book was an unending list of events, evidence, transcripts, and countermoves in the process as it unwound. Finally you get to the end, but without any more real lessons since the first chapter or two.

1. Credit to Einhorn for many things -- for making the original speech, for taking all the crap that was heaped on him over the years by Allied and the regulators, for spending so much of his own money on the case, for persisting, persisting, persisting against so many people for so long, just to earn 7M on his invested capital, and then to give it all away to charities. Yes, credit to him. I'm not sure I would hang in there as long as he did in such a disgusting environment. (I wonder if that is a reasonable way to judge/respect a person, if he does things that you personally would not?)

2. Shame on Allied and the regulators especially, for their roles in this travesty of sucking hundreds of millions of dollars from the USA taxpayers, and then letting (indeed, encouraging) the perps to get away with the money completely, in broad daylight, day after day, for years, and years.

I think the book would have benefited greatly from summaries of lessons learned, and of behaviors observed, and of maybe "here's how crooks think, and here are their most effective moves", or maybe "here's a summary of all the stupid excuses that judges and regulators can hand out", etc.

Einhorn does give a summary list of players at the front of the book -- haha, I remember the sinking feeling I had as I turned about the fifth page of names before I could start reading the story; I was thinking, "oh oh, any book that has a list of players this long is going to be a long and tedious read... (and I was right, it was)".

But there are no good summaries of material intended to educate the reader in the main lessons from the author's journey, like you find in More Money than God (on the history of hedge funds). No summaries of excuses regulators can use, no advice for people who might want to use the lessons from this book in their own fights/journeys.

What a story of amazing persistence on the author's part, and disgusting behavior on the part of the "professional" media, regulators, judges, and political systems. Haha, but you'll have to have some persistence of your own, to get through this book.

As a record of what happened, the book is excellent. You have to give it five stars for that. But as for being an interesting read based on a fast narrative, I could only give it three stars because I had to press on with persistence to see if there were any brighter moments in the conclusion (sadly, there were not).

In the end, I'm glad he wrote the book and I'm glad I read it -- it's one of the memorable stories of our time, for sure. And as a final note, once again to Einhorn's credit, can you imagine how much persistence he must have to relive the whole process a second time to write this whole book? Wow. Maybe that's one of the big lessons of the book, a tribute to the depth of character and persistence that some people have. I'd like to meet him sometime...

Très décevant.

J'avais trouvé ce livre sur une liste de bons ouvrages sur les turpitudes comptables. C'est le récit d'un gestionnaire de fonds qui vend à découvert et se bat pour le justifier.

Le livre aurait pu tenir sur 10 pages. Il y a des transcriptions d'échanges téléphoniques, de lettres, etc. Et finalement, très peu d'analyse comptable.

Once started it's hard to stop reading ..... until the end .... Very very interesting. A great opening on the secret world of investments and corporate America. also useful from a professional perspective, if you work in those industries. Bravo David.

Esse livro é simplesmente sensacional. É o case de short selling mais bem documentado da história! Tem todas as nuances e sutilezas que podem suceder no mercado, e a análise do David Einhorn é simplesmente sublime. Se você quer trabalhar na CVM ou como analista de equity, compre ontem!

A classic pure-value investor, this book is written by the hedge fund manager himself which means a lot to me. There is a lot of technical jargon so prior accounting knowledge is necessary to make it through this book.

Einhorn knew what was going on at Lehman long before the crisis started and the book gives valuable insight into the relationship between private sector lenders and Washington.

The number of reviews I've left on Amazon could probably be counted on one hand. This is one of them.

Straight off the bat it becomes clear that Einhorn is intelligent and talented at his job. Despite being written by a hedge fund manager, 'Fooling Some...' reads well and the story unfolds at a pace neither too fast causing a sense of overwhelm, nor too slowly leading you to wonder when the hell it gets started.

It could easily pass as a fiction as the events come across as so outlandish, yet Einhorn leads you through the proceedings in a friendly and matter-of-fact way. Some passages come across as dispassionate or 'cold' and, personally, this adds to the narrative because it's how I imagine Einhorn to be if you sat down and he told you the story in person. He wouldn't be animated or outraged at management's actions, he'd just tell you what he did, Allied's reactions and then proceed to justify why he went short. This built the excitement.

The 'finance' is only 1/2 the story here, so this can be enjoyed by a die-hard finance nerd interested in forensic accounting, through to the casual stock market enthusiast who likes to watch a bit of Bloomberg every now and then. After I finished, my grandfather (in his 80s) borrowed it and raced through.

Einhorn is a perfect guide through a scandalous story; by the end of the book you'll be rooting for his corner and you'll be only too tempted to re-read it.