Enron: The Smartest Guys in the Room review

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Based on hearing the news that Lay and Skilling were found guilty, I decided to check out the movie about their rise and fall, Enron: The Smartest Guys in the Room. The documentary was impressive in it’s detail. Now we know how the whole story turns out:

And after being convicted Thursday of fraud and conspiracy in one of the biggest corporate scandals in U.S. history, former Enron executives Kenneth Lay and Jeffrey Skilling face the possibility of spending the rest of their lives in prison.

The possibility of life sentences is very real for both Skilling and Lay! That’s quite a comedown for these two who were flying high as the world helped them succeed because of a sort of shared delusion that stocks prices only go up. The movie clearly shows that not only were there tons of warning signs, most of the were so blatant that you had to be criminal, an idiot, or both to ignore them. The greed of Ken Lay and Jeff Skilling was enormous, and their takedown was as dramatic as the rise.

There’s a lesson in here for all businesses which focus on growth above all else. Listening to the conversations of the Enron traders as they turned of California’s electricity is shocking. You want to literally reach out and slap them and say “Those are your neighbors you’re screwing”. As investors, we need to be sure we aren’t putting our money into straight crap like this. How can we be sure?

It’s not easy. Even the analysts were playing the game. The only people who didn’t know the whole truth were the investors, who always get burnt to a crisp when big money interests trample for the door.

If you haven’t seen this movie, please check it out. If you have, what do you think the movie says about how company’s do business?

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