...Introduction: Michael “Mickey” Monus managed to lose over $500 million dollars of investor money while seemingly building a successful discount chain. Using catchy slogans such as "Phar-Mor power buying gives you Phar-Mor buying power" enabled Monus to take his chain from 1 store to over 300 in 10 short years. This phenomenal growth was attributed to selling a lot of merchandise, purchased at rock bottom prices, to turn a small profit. The success was unusually rapid and even had Sam Walton, of Wal-Mart, worried; and in July 1992 Mickey Monus (President), David Shapira (CEO), and Patrick Finn (CFO) felt like they were on top of the world. They had 25,000 employees and sales of more than $ 3 billion. Accounting issues: Phar-Mor bankruptcy was one of the largest private companies in 1992. The fraud was executed primarily by upper management from the President, CFO, and COO to name a few. Phar-Mor executives embezzled money by using it for personal use and creating the World Basketball League. Phar-Mor accounting issues included falsifying financial statements. The false financial statements were submitted to banks and allowed them to increase the credit line from $435 million to $600 million. Phar-Mor defrauded Corporate Partners, Chemical Bank, Westinghouse Credit Corporation, and Westminster National Bank for a total of $517 million dollars (Mintz & Morris). Mickey Monus, Pat Finn and associates managed to overstate inventory which amazingly increased tremendously...
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...THE B L A C K SWAN The HIGHLY I mpact IM of the PROBABLE Nassim Nicholas Taleb U.S.A. $26.95 Canada $34.95 is a highly improbable event with three principal characteristics: It is unpre dictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9 / 1 1 . For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives. A BLACK SWAN Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don't know. We are, therefore, unable to truly estimate oppor tunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the "impossible." For years, Taleb has studied how we fool our selves into thinking we know more than we actually do. We restrict our thinking to the irrelevant and inconsequential, while large events continue to surprise us and shape our world. Now, in this reve latory book, Taleb explains everything we know about what we don't know. He offers...
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