On Dec 24, 2008, at 6:53 PM, Jordan Hayes wrote:
> Doug writes:
>
>> Buying GM bonds is a bet, not an "investment."
>
> Wow, gramps; tell me more about the distinction you're drawing here?
Well, the classic definition of an investment is one whose return comes from dividends or interest, as opposed to a speculation, where the gain comes from price. That's admittedly a gramps-y definition. But updating it some, an investment is a reasonably solid thing that appreciates at a nonspectacular rate appropriate to its moderate risk level. Buying GM bonds is highly risky, either by the MPT theory def of deviation from expected return, or the colloquial def of the possibility of being wiped out.
Doug