Hedge Fund Manager Tells All in New Book

Immediately after the speech, all hell broke loose. The company pushed back hard, and Einhorn embarked on a mission to interest regulators and journalists in what he saw as fraud. He first wrote his opinions for a public audience on TheStreet.com.

Alliance did eventually come to an agreement with the SEC, but it was toothless and quite disappointing to Einhorn. This is part of my fascination with the book and Einhorn's decision to write it. Six years have elapsed since Einhorn started working on Allied, and he ends the book where he began: claiming that the accounting was flawed. Hedge fund managers are not generally public creatures, so to go this public and about an idea that has not worked is somewhat remarkable. In fact, remarkable might be a kind word for it.

But you, the savvy investor, can benefit greatly from this book, even if you have to occasionally wade through tedious detail. There are many legends about shorts and how they try to interest journalists and regulators in their positions. The truth is, of course, that just as many investors try to interest journalists in writing about longs. There is nothing wrong with either, provided the investor is aboveboard in his or her opinions and isn't obviously looking for a quick profit by selling at publication.

But this is nothing if not a fly's-eye view of how this back-and-forth can work -- in all its glory and messiness -- at the highest levels. Journalists sometimes bite on the idea, sometimes disappear after professing interest and sometimes betray Einhorn. Few have time for investigative reporting, anyhow. Regulators move slowly, and they sometimes move against Einhorn. (He was called on the carpet by the Securities and Exchange Commission.) Like many shorts, especially the vulnerable ones, Allied also fights back -- and sometimes fights dirty.

Anyhow, it's all there. And Einhorn is still there, too. Not with a Grisham-like hit, but still waiting for the world to catch on to his opinion on Allied and for the stock to crack. In the meantime, he's written an important guide for investors.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting