[CANSLIM] Enron Explained

From: Mhboatman@aol.com
Subject: [CANSLIM] Enron Explained
Date: Tue, 12 Feb 2002 00:57:26 EST

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ENRON EXPLAINED: In case you were wondering how Enron came into so much 
trouble, here is an explanation reputedly given by a Colorado Aggie professor 
to explain it in terms his students could understand. 



Capitalism -- You have two cows.  You sell one and buy a bull. Your herd 
multiplies, and the economy grows.  You sell them and retire on the income. 



Enron Venture Capitalism -- You have two cows.  You sell three of them to 
your publicly listed company, using letters of credit opened by your 
brother-in-law at the bank, then execute a debt/equity swap with an 
associated general offer so that you get all four cows back, with a tax 
exemption for five cows.  The milk rights of the six cows are transferred via 
an intermediary to a Cayman Island company secretly owned by the majority 
shareholder who sells the rights to all seven cows back to your listed 
company.  The annual report says the company owns eight cows, with an option 
on one more.  Now do you see why a company with $62 billion in assets is 
declaring bankruptcy?



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