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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (899)	11/28/2001 10:24:20 PM
From: Raymond Duray	Respond to of 1433

Herd Instinct Hi SB, Re: Institutional investors ~ One thing that worked in ENE's favor for several years was the lack of sophistication among the I.I.s. They had no way to value the hidden off-balance sheet debts that ENE was piling up as it used every possible bit of chicanery and deception to skirt GAAP/FASB accountancy standards. Even the auditors seem to have not known which rocks to turn over to get a real picture of ENE's exposure. What the Wall Street analysts relied on was ENE's incomplete disclosure. Apparently, certain analysts were beginning to express bafflement at the financial statements by mid-2000. However, most were relying on the company's projections of growth and their own lack of sophisticated skepticism to continue to recommend the stock. Even today, only two of 16 analysts have a "sell" recommendation on the stock, six still had a "strong buy" on it as of this morning. A baffling disconnect from reality. So, the institutional investors were relying on fraudulent accounting reports, and on the opinion of analysts who were expressing the general bias of that trade, well discussed in various publications and on SI earlier this year. Those who have lost money on this were guilty of relying on conformance to peer pressure and the word of less than objective sell-side analysts for their investment decisions. JM2C, R.