With so much money riding on reported numbers, human nature is to manipulate them. And with so many doing it, you get Serpico effects, where everyone rationalizes that it's okay because everyone else is doing it. It is always thus.
Charlie MungerThe liabilities are always 100 percent good. It's the assets you have to worry about.
Charlie MungerI have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.
Charlie Munger"[Lawyers who file class-action securities suits] is not a group you would want to marry into your family. "That said, more than half the time the people being sued by the Lerach firm are guilty of outrageous conduct. The problem is, they don't mind (suing) the other half. They are an equal opportunity litigator."
Charlie Munger