Did Enron's Investors Fool Themselves?

So far the Enron story has mostly been about executives and accountants. This article focuses on the professional investment community ‐ fund managers and financial analysts. It argues that the data in Enron’s published accounts should have been sufficient to trigger warning bells long before the share price started falling. Enron’s reported revenue grew fast, but at lower margins ‐ with the result that it was failing to earn an adequate return on capital. As with the internet bubble, the investment community neglected the question of whether the growth was valuable.