The Pinnacle Notes has a "credit event". If any of 5 entities default, the investor has the chance to lose up to 40% of the invested amount.
What is the likelihood of this happening? I checked the internet for "credit defaults".
I found a link to "credit default swaps" or CDS. It appears to me that the Pinnacle Notes have CDS built into the product.
I find it quite complex to understand the CDS, especially to calculate the chance of a "credit event" occuring.
You should read the section on "Criticism". It quotes Warren Buffet.
Lesson: If you are not able to understand a product, do not invest in it. You do not know if you are getting a fair deal.
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