To be fooled all of the time. Yes, you can.

It's quite a long story for a short position, even for a long one actually.

More than 6 years have passed since David Einhorn shorted Allied in 2002 where it was traded at $26. Still his call is dead right. Although the company is still in existence today for some curious reason, at $3.20, its stock price says something more alarming than itself. Without trumpeting a hot short story, the book focuses on how bad management can persistently keep raking in millions of dollars in compensations, how regulators can persistently turn a blind eye to fraudulent lendings and inflated accountings, and how retail investors can persistently be fooled by seemly consistent cash distributions and symbolic insider buyings.

Warren Buffet once told Einhorn about the difficulty of shorting stocks of companies run by crooks. Buffet reasoned that the short position is only a portion of his whole portfolio while the crook's life depends on it so they'll fight dirty to save themselves. Despite the wise advice from the wise Buffet, Einhorn carried on his conviction, a journey not short of personal attacks from Allied management, oddly investigations by SEC and Attorney General Elliot Spitzer, and even caused his wife to lose her job. His persistence, which he took from his father, however, wins him money and my respect.

What made me notice Einhorn was his another short trade, Lehman, a much shorter and equally compelling story. He started short Lehman in Jul 2007 when it was traded at $70 and we all know the rest of the story, Lehman went bankruptcy in Sep 2008. Einhorn says he never underestimate those who trade against him and always strives to find out if he has an edge over them. George Soros turned out to be one of them, who picked up Lehman just a quarter before its bankruptcy and lost millions.

In a cartoon, the boss says on a management meeting, "Remember, you can fool some of the people all of the time. Those are the people we need to concentrate on." Ergo investors who kid due diligence can be fooled all of the time. If they haven't found themselves fooledyet, just wait till the tide recedes.