GM Bondholder Angry ... Because She Didn't Diversify

CNN ran a story this morning about a schoolteacher who invested and lost $70K as a GM bondholder. This must be sensationalist journalism. I mean, John King never asked the 700 pound gorilla question: You are a schoolteacher, what are you doing putting such a large portion of your investments in one company?

Yes, the government involvement here alters the picture, but that occurs at the aggregate level. The huge impact Debra (that's her name) is feeling as a result of the bankruptcy is her own doing. If she were properly diversified, this would have sucked, but it would not have been devastating.

1 comment:

David said...

Another question is what, if anything, the government has achieved by its involvement with GM. Personally, I think that it's very very little.