Stansberry Investor Hour

Have We Learned Our Lesson From Enron?

Episode #148 | April 2, 2020

Have We Learned Our Lesson From Enron?

Guest: Bethany McLean

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In This Episode

On this week’s episode, Dan speaks with Bethany McLean, author of the “The Smartest Guys in the Room” the story of the scandalous and unexpected fall of Enron.

Before their epic collapse, Bethany was one of the first in the financial media investigating the red flags around the company. In early 2001, she wrote an article in Fortune Magazine, titled “Is Enron Overpriced?”

Bethany takes Dan back to 2001 and gives him some incredible in-depth details at the scandal. They also discuss what implications it had on the financial world, and the perplexing fact that collectively, we haven’t seemed to fully learn our lesson from Enron.

Bethany even lets Dan in on an industry that could be seeing bankruptcies in the coming years.

The two also touch on the Coronavirus, and the reason there’s so much uncertainty. Bethany admits “there’s a lot that we just don’t know” but ends the episode on a very positive tone. Enjoy.

Featured Guests

Bethany McLean

Journalist

Bethany McLean is a contributing editor at Vanity Fair. She is also a columnist at Yahoo Finance and a contributor to CNBC. Her two books are the The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron and All the Devils Are Here: The Hidden History of the Financial Crisis. She lives in Chicago. She has also written two mini books, Shaky Ground: The Strange Saga of the US Mortgage Giants and Saudi America: The Truth About Fracking and How It's Changing the World. She also serves on the boards of the Stigler Center at the University of Chicago and the Foundation for Financial Journalism. She's a 1992 graduate of Williams College.

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Episode Extras

NOTES & LINKS

To follow Dan’s most recent work at Extreme Value, click here.

To check out Bethany’s research and insights, click here.

SHOW HIGHLIGHTS

1:00 – What’s going on with the gold market? Dan discusses how the Coronavirus has battered the global supply chain and priced in a shortage of precious metals.

8:36 – “Longer term I think it’s a no-brainer that we get higher gold and silver prices… Crazy as the price may behave, I think you should own it.”

12:00 – Dan has a conversation with today’s guest, Bethany McLean, previously an editor at large at Fortune Magazine, where she wrote the piece “Is Enron Overpriced?” in 2001, one of the first documented skeptical articles on the company. She later authored a book about the scandalous fall of Enron, “The Smartest Guys in the Room” and today she works as contributing editor at Vanity Fair.

17:32 – Bethany says one phone call from a friend in the industry was all it took for her to put her attention on Enron… and the thread unraveled from there.

26:00 – Dan asks Bethany why Enron-type scandals seem to happen, and Bethany gives a thought-provoking answer.

30:55 – Dan asks Bethany, “what’s going through your mind these days?” Bethany tells him which industry she believes will have many bankruptcies in the coming years.

37:20 – Dan and Bethany discuss the Coronavirus and how there are so many unknowns… “I was not afraid at all in 2008… but I don’t know… this feels different and bad.”

44:44 – “On the positive side, there’s the wildcard out there of what the pharmaceutical industry may be able to come up with in the short term… and there’s another wildcard about how warmer temperatures are going to affect the virus…”

49:00 – Dan asks Bethany “if you could leave our listeners with one idea, what would that be?” Bethany’s gives Dan and the listeners some helpful questions to ask yourself each day to help see the good during these difficult times.

50:55 – Dan answers questions from listeners in the mailbag… is silver a viable option relative to gold? Don’t you think you should be more measured about Coronavirus, since you’re not an expert? What do you think of Porter’s recent comments? How can we grow from the situation we find ourselves in today?