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Author: FoolishCop Big gold star, 5000 posts Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 10413  
Subject: Re: SEC Investigations Date: 1/24/2003 12:46 AM
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Patrick,

I'll stand corrected on the fact that you were speaking about Allied Capital and not Farmer Mac, but Tilson still provided links to both sides of the argument and told readers to go there and make a decision for themselves. He said that based on his reading of the "evidence" he was convinced both companies were producing shady results. Which is his opinion. Which is what all the articles ever published on the Motley Fool website ever were: their authors' opinion about a stock, whether for good or ill.

However, I stand by my opinion that the WSJ writer was making a case by using innuendo--based on the facts of an SEC investigation--to make the point that the investigation was merited.

Now I did not read the original article, only the bits you provided, but as a former editor (I've done my share of writing and editing too) you are more than well aware how easy it is to try and shape opinion through the selective use of words.

The first paragraph of the article you provided says "The companies have asserted to regulators that the hedge funds could have acted in unison based on longstanding relationships, the people say." Not did, but could have. And how? The writer says because they all attended HBS "around the same time" and "Indeed...all spoke on a panel at the business school on "Starting a Hedge Fund." That is writing which attempts to prove the original premise without any basis in fact. That's not reporting, that's opinion shaping.

I guess we should also indict the New York Times as well since they wrote a negative article about the company a whole month before those colluding began publishing their reports. Maybe the Times writer was shorting the stock too. Let's check and see which school he went to and who else went to school with him "around the same time."

But all this is a tangent. The crux of the matter is, did Tilson and the other hedge fund managers collude to drop the price of ALD and AGM to profit off the decline. I don't even know if that's illegal. If I short a stock, tell you that I'm short, and tell you what a piece of crap it is and you shouldn't buy it...and you don't, or you even short it too...is that illegal? Isn't that what analysts are paid to do?

Again, I'm not seeing a problem with what occurred. What I am seeing, though, is perhaps an opportunistic time to take the heat off the way some companies were run by smearing the names of analysts at a time when most analysts are suspect. Nor do I need a newspaper writer to try and mold my opinion through suggestive linguistic gymnastics. For me, Whitney Tilson has always provided intelligent, readable copy and analysis, and opened my eyes quite a few times about investments and investing. I'm more than willing to give him the benefit of the doubt (of which I really have none) that there was no illegal collusion occuring until proven otherwise.

Rich
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