HOUSTON, Jan. 20 — Of all the Enron mementoes, John Olson might have the best one. Mr. Olson, an analyst who has been a longtime skeptic of the energy company's once-stratospheric stock price, has a handwritten note that the Enron chairman, Kenneth L. Lay, sent last June to Mr. Olson's boss, Donald Sanders.
"Don — John Olson has been wrong about Enron for over 10 years and is still wrong," Mr. Lay wrote. "But he is consistant [sic]. Ken."
Consistently right, actually. Mr. Olson, who follows the energy industry for a small investment firm here, has finally been proved correct where just about every other Wall Street analyst who followed Enron was wrong. But he can take only a grim kind of satisfaction in his prescience. "I would like to be able to gloat," he said, "but this thing is just too damaging, too unhappy, to do anything like that."
Mr. Olson, who calls himself an old-fashioned analyst who does not own individual stocks himself, is now a Houston celebrity. A recent talk he gave at the Petroleum Club on the fall of Enron drew a standing-room- only crowd.
"He's a very sharp analyst," said George P. Mitchell, founder of the Mitchell Energy & Development Corporation in Houston. "When you have 16 out of 17 analysts" promoting the stock, he said, "that's pretty tough opposition. But he stuck to his guns, and he did it early."
Mr. Olson's moment in the sun comes at the end of a lonely time. Wall Street, he said, was dazzled by Enron's high-technology gloss, and did not scrutinize the business. That, he said, has been the sad trend of the analyst community during the years of the dot-com bubble, when companies with no profits and few prospects of earning them could get glowing reviews from analysts like Henry Blodgett of Merrill Lynch and Mary Meeker of Morgan Stanley.
"Henry Blodgett might be a nice young man, but . . ." he said, trailing off into silence.
"On Wall Street," he said, "the worst thing you can be is a schnuckel," which he said was the Yiddish word for dupe. "We were schnuckled on Enron," he said. "It was gloriously overvalued."
His rough command of Yiddish — the likely word he was referring to was "schnook" — came from his adolescence in Larchmont, N.Y., where he said the fathers of Jewish girls he dated used choice Yiddish terms to insult him. "Yiddish is a marvelously slanderous language," he said.
A sardonic man, six feet tall, thin and weathered, he looks like a Giacometti statue in pinstripes. He describes himself as "a basset hound with a 25-watt personality."
After receiving an M.B.A. from the Wharton School of Finance at the University of Pennsylvania, he worked as an analyst covering the oil, gas and electric power industries for firms including Merrill Lynch, Drexel Burhnam Lambert and First Boston. He is currently director of research for a boutique firm here, the Sanders Morris Harris Group.
His small corner office, on the 31st floor of one of Houston's many downtown office towers, has a splendid view of Enron Field, the city's new baseball stadium. The wood-framed note from Mr. Lay hangs near a wire sculpture of an oil derrick and a silver yo-yo.
The note was scrawled in the margins of a story from U.S. News & World Report in which Mr. Olson was quoted as saying, "They're not very forthcoming about how they make their money." He went on to say: "I don't know an analyst worth his salt who can seriously analyze Enron." A messenger delivered the note from Mr. Lay the next day by hand.
When Mr. Sanders, his boss, showed him the note, Mr. Olson recalls shrugging. "You know that I'm old and I'm worthless," he said, "but at least I can spell `consistent'."
In Houston, opposing Enron was a little like being against the city itself, said Stephen L. Klineberg, a professor of sociology at Rice University. "You could make a case that it was especially hard in Houston to be a skeptic on Enron," he said, because "Ken Lay and Enron were very much at the center of Houston's sense of positioning itself for success in the post-oil age" of trading and high technology.
The cost of such pessimism could be high, Mr. Olson said. "They are a very combative culture over there," he said. "They always played to win."
Those who did not join the chorus of praise for Enron, he said, could be punished. "There was a strong mandate, unwritten, unspoken, at Enron that if you the investment banking house ever wanted to do business with Enron, your analyst had to have a strong buy on the stock," he said. "I was continually at war with investment bankers."
His consistency, however, has not been complete. He did recommend Enron stock when its troubles first drove the price down to $27 a share last September. "I thought it was a real bargain at the time," he said. The slide, of course, continued as Enron headed toward bankruptcy.
Surprisingly, he does not believe that Enron is finished. He said that he believes Enron can, and should, recover because of its trading prowess. "They were the best of the breed," he said. "Trading did not bring them down. It was a rogue financing operation."
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