Enron: The Smartest Guys in the Room (2005)

Trader's Film Library #38 · Frauds and scandals. How the smartest guys in the room built a gigantic fraud.

Original title: Enron: The Smartest Guys in the Room · Type: documentary · Created by: Alex Gibney · Usefulness for traders: ★★★★☆

What it's about

A documentary about the collapse of Enron, the US energy giant that hid losses with accounting tricks and went bankrupt in 2001. Oscar-nominated.

What it has to do with markets

Among other things, the film shows Enron's energy traders exploiting the California energy crisis. Recordings of their conversations are a shocking picture of trading without any rules. It also shows how “the smartest guys in the room” managed to fool themselves.

Lessons for traders

• complexity hides problems: if you don't understand where the profit comes from, don't trust it
• a culture that rewards only results leads to abuse
• management's confidence isn't proof (overconfidence, Atlas of biases #11)

What to watch out for

One of the best financial documentaries ever made.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #37 Rogue Trader · Film Library index · #39 Kerviel: L'outsider and Rogue Trader: One Trader, 50 Billion →

The description outlines the plot without revealing the ending where possible (true stories have a known outcome). Educational content, not investment advice.