tag:blogger.com,1999:blog-8152901575140311047.post6747993256850612052..comments2024-03-29T05:33:33.027-04:00Comments on Musings on Markets: How do you evaluate risk taking?Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8152901575140311047.post-80228449410956436392010-11-29T01:05:58.079-05:002010-11-29T01:05:58.079-05:00I think it's normal. Any government alway spen...I think it's normal. Any government alway spends taxpayer's money for financing different projects and sometimes in investment form. And if authority wins, this is good opportunity to demonstrate their succes. It's normal. In a nutshell nothing much - it's just a policy ...Nicholashttps://www.blogger.com/profile/09959976537957483849noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-8839041113232283192010-11-22T14:56:33.601-05:002010-11-22T14:56:33.601-05:00Is the financial outcome really worth the risk ? I...Is the financial outcome really worth the risk ? If so, GM wouldn't have required a public bailout. Isn't it true that any other investment would have fetched us a better outcome - and this includes diversified portfolios such as S&P 500 ( which by the way has grown by more than 50% ). The problem with objectivity and finance is that we tend to de-emphasize the human aspect of decision making. Politically speaking, government had a lot to gain from rescuing GM. As long as the results are debatable, decision makers are incentivated to make a sub-optimal decision ( sub-optimal for the society, but optimal from their stand point). Else we would have had a solution for social security and medicare long time back.Hemanth Mandahttps://www.blogger.com/profile/06898007078875416663noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-16805626593809766682010-11-19T23:08:40.305-05:002010-11-19T23:08:40.305-05:00@Nadeem: I agree with you that the consumer might ...@Nadeem: I agree with you that the consumer might have more faith in GM, but what is the guarentee that GM will not repeat its bad policy decisions? Will it not create moral hazard? Will it not cause inefficiency and dampen the quality of the service they provide? I don't see govt will again step in and save it just because it has huge side costs. As Prof. pointed we need to take the success (partial) of GM with very caution!!Surender Komerahttps://www.blogger.com/profile/01144672939566638597noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-28596109690000845912010-11-19T18:16:57.533-05:002010-11-19T18:16:57.533-05:00Would you agree with the common assessment that be...Would you agree with the common assessment that being owned by the government hurts GM? <br /><br />Also, from an investor standpoint, the interests of the common investor might not be aligned with the interests of the government. But, the consumer might have more faith in the GM brand knowing that the government will try to keep the company afloat. I remember when Daewoo was under financial stress, their sales dropped further because consumers were not sure if the company would be around for parts and service.Nadeem Moulvihttps://www.blogger.com/profile/13480340197860669843noreply@blogger.com