Fortune is publishing excerpts from its favorite business books. Read the rest of the one from "The Big Short."
Friday, December 24, 2010
Eisman stuck to his sell rating on Lomas Financial, even after the Lomas Financial Corporation announced that investors needn't worry about its financial condition, as it had hedged its market risk. "The single greatest line I ever wrote as an analyst," says Eisman, "was after Lomas said they were hedged." He recited the line from memory: "'The Lomas Financial Corporation is a perfectly hedged financial institution: it loses money in every conceivable interest rate environment.' I enjoyed writing that sentence more than any sentence I ever wrote." A few months after he published that line, the Lomas Financial Corporation returned to bankruptcy.
Posted by Michael Wade at 9:36 AM