Julia:
What we're finding interesting here is that Dan's father had stock in
Enron, which he unloaded over the summer. He gave as his reason that
there wasn't anything *to* the company to justify the stock price any
longer, that it was just a shell. If some Joe E. Engineer could see
that, why didn't the people who are paid to evaluate stocks and run
mutual funds see that?
Julia
Me:
And this is the fascinating question, isn't it? There are a few reasons, I
think. Here's the one that's occurred to me because of my worm's eye view
of many of these investment houses. The people who do the real work on
stock analysis for the investment firms - they're basically me. I
interviewed for jobs at places like Goldman Sachs that were precisely that,
and many of my friends are working at them right now. They don't really
have that much training and they _certainly_ don't have that much
experience. The Enron people had a great idea. They created an aura where
if you thought there was something weird about the company it wasn't that
there was something weird about the company, it was that _you weren't smart
enough to understand what they were doing_. If you're a 22 year old English
major just hired out of Harvard I think if there's one thing you never, ever
want to admit, to yourself or to anyone else, it's that you aren't smart
enough to understand something, even if you don't really have the experience
or training to really understand it. I have a feeling that that bit of
psychology played a critical role in this whole thing.
Gautam
