Book review: Fooling Some of the People All of the Time

Zac, you share one thing in common with Einhorn. On this point both of you are wrong. Let's set the stage, Einhorn gives a speech at a "charity event." ALD's stock never "tanked" as you put it but tends to follow the market. If you had conducted a little research instead of reproducing either in whole or part without attribution the press release that the publisher furnished you would have discovered that ALD has never been much of a grower in regard to share price but rather is owned primarily for the dividend which is approx. 12% as of this writing. I refer to ALD as the poor man's Berkshire Hathaway. If you had reinvested the dividend over the life of the stock I believe you would have received a return of 17%. Allied is a relatively small company hardly large enough to have the clout to influence the government but oddly it has recently persuaded a bunch of rubes from an outfit named Goldman Sachs to partner with it on investment ideas. (Einhorn should enlighten them too.) In the time since his allegations it is Einhorn and his ilk that have managed to influence the government and the SEC by repealing the uptick rule now making it easy to punish a stock on a few fictitious news releases.

"But nothing has been done." Well, ALD continues to pay its dividend and the stock price has begun to rise with the rest of the market and Mr. Einhorn has published his book which I admittedly have yet to read. At least I'm honest about having not read the book. What about you Zac?

Beltway Greg

BTW, in regard to books read Barton Bigg's new book, War, Wealth and Wisdom," and if you missed it last summer, "A Demon of Our own Design," by a dude named Bookstaber I believe.

Hi,

The stock did tank immediately following the speech. Go back and look at the speech. It rebounded though.

I have never seen any press release about the book, and the publisher didn't furnish me with one. If you have a copy, I'll be happy to take a look.

Thanks,

Zac

Einhorn gives a speech, one must assume, given that he runs a fund that shorts that if he held any position in the stock that he covered that position. Odd that he would give this speech at a "charity event" and someone would have a camera rolling. And now he writes a book about the entire affair. Seems like he can't leave well enough alone. They won; he lost. Once again much of what you wrote seems to be a little dust jacket blurbagesque.

Beltway Greg

Zacster, I bought and lightly read the book.

And I'm sorry to report that despite supplying us with 356 pages of whining Einhorn fails to make his case.

To begin, I asked about the press release because you wrote that you read some 50+ "bidness" related books a year some of which, given your position, are probably supplied by contacts at publishing houses.

Let me supply an example from the book.
On pg. 168 Einhorn writes, "We next heard from Professor Perold from Harvard Business School, who completed his case study of Allied. I was surprised because he hadn't contacted us since I spoke to his class in October 2002........

"I was dumbfounded. Why would a professor at the Harvard Business School, who seemed like an intelligent guy, write a case study that resolved everything in Allied's favor? ...

"The final version came out in early 2004 and was fairer." (Shouldn't that have been more fair.)

The interesting thing here is I wonder if Einhorn's recollections of his attempts to change the direction of the seemingly intelligent Prof. Perold research are correct?" Lesson learned if you agree with Einhorn you're intelligent if you don't you aren't.

To quote Kenny Rogers, "You gotta know when to hold em' and know when to fold em'.

Time to fold, David.

Beltway Greg

Einhorn has been close to the line from the beginning. Other than the bad egg in the Detroit Small Business company office (not the major part of ALD business), the only complaint is that ALD has never given Wall Street all the inside of their dealings with companies who come to them for special financing, thus no guidance. Einhorn and his ilk have savaged several companies I've been an investor in, especially since the no uptick rule came in. Einhorn lost in court and was mildly excoriated by the judge for bringing old and reworked material to try to sue on behalf of US government, a right of any citizen that is honest.
Allied has paid 179 quarterly dividends; annually their dividend has never gone down, only gradually up, as a BDO they must pay certain of their income and have done so at usually 10% level or higher at market prices. I have owned the stock for ~20 years.
Somehow, I think Einhorn is the loser and GE Finance who just joined with them in a 3 billion $$ effort and Goldman Sachs who also set up relationship, were both well aware of Einhorn's vendetta, did the due diligence that mattered. My late mother once said don't believe anything you hear and only half of what you read -not original with her but apt as I don't believe anything Einhorn says of his motives or his own purity in the matter.

Zac,

Another sucker on board, BB & T Bank just upgraded ALD to a buy. Send them a copy of the book and help them save themselves. BTW, I'm going to make it up to you. Buy some TIN and call me when it hits $20 in less than a year.

Beltway Greg
The Prophet of Profits