The bias of believing a company’s story
Shane Parrish of The Knowledge Project spoke with investigative business journalist Bethany McLean about the issue of people having a bias of believing a company’s story.
“Breaking a story is being able to really get in there and explain what’s happening,” said McLean, who wrote a story for Fortune magazine about Enron Corp. six months before it filed for bankruptcy court protection.
“I was not cynical enough at the time, or skeptical is a better word,” said McLean about her Enron story, which was titled “Is Enron Overpriced?” and ran in the March 5, 2001 issue.
“The idea that this could be a fraud was almost inconceivable at that point in time…For me, it was a slow unfolding,” she said.
McLean said her story simply picked up on some underlying skepticism from the debt markets and short sellers about Enron. “The equity markets were total believers in Enron,” she said.
McLean believes that skepticism does not leak into the mainstream of the business world. It tends to travel in a very small circle, she believes, and is much harder to find. “Everybody is biased toward belief because they stand to make money if the price goes up,” she said. “It’s particularly true in business because people want to make money.”
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