Risk, Reward and Investment
Lately you hear all these sob stories of little investors or Joe the Plumber who bought GM bonds and if this or that company goes under, they lose their money. Well, that is the life of investment. Please show me where it is written that you don't lose in an investment. I have yet to see a single investment that has no risk and no possibility of failure.
Are we honestly in the practice of bailing out companies because their investors will lose money? It seems to be the road GM is trying to take their current situation. Pulling on the heart strings and stating 'look at our 6B in bond holders that will lose their investment'. Yes, losing all you money because you decided to sink everything into one company is sad, however, that is the name of the game. It is a risk/reward system. Let me ask this of the heart string pullers, would you feel so sad for those invested fully in Exxon? Or maybe AIG? I bet the 'feeling' would be different.
GM for decades succeeded by building mediocre products, producing multiple labels and constant putting off dealing with legacy UAW costs. Now everything has caught up with the company. Any investor should have seen this coming, you can't push your bottom line around and then not expect at some point that the black would turn red. Now in GM's case they have been in bad shape since 2000 officially, so how do you buy 6B in bonds in that company?
The fact of the matter is you make investments, sometimes they turn out great and sometimes they fail. GM needs to fail. GM needs to go into bankruptcy regardless of impact, you can not post a company up because you are afraid of the consequence of failure. If that is the case, then we should NOT have businesses that go public, everything should be privately owned. Lets see how the 401k and IRA lovers like that.
Are we honestly in the practice of bailing out companies because their investors will lose money? It seems to be the road GM is trying to take their current situation. Pulling on the heart strings and stating 'look at our 6B in bond holders that will lose their investment'. Yes, losing all you money because you decided to sink everything into one company is sad, however, that is the name of the game. It is a risk/reward system. Let me ask this of the heart string pullers, would you feel so sad for those invested fully in Exxon? Or maybe AIG? I bet the 'feeling' would be different.
GM for decades succeeded by building mediocre products, producing multiple labels and constant putting off dealing with legacy UAW costs. Now everything has caught up with the company. Any investor should have seen this coming, you can't push your bottom line around and then not expect at some point that the black would turn red. Now in GM's case they have been in bad shape since 2000 officially, so how do you buy 6B in bonds in that company?
The fact of the matter is you make investments, sometimes they turn out great and sometimes they fail. GM needs to fail. GM needs to go into bankruptcy regardless of impact, you can not post a company up because you are afraid of the consequence of failure. If that is the case, then we should NOT have businesses that go public, everything should be privately owned. Lets see how the 401k and IRA lovers like that.
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