Of the large investment banks, Lehman, Goldman, Bear Stearns, Merrill Lynch, three of them have failed in a way that has required being bought or bankruptcy (Lehman). While MER is being bought by BAC at a premium above Friday's closing price, Lehman will likely go bye-bye. MER/LEH outcomes are a good example of betting v. investing. How would anyone know the outcome ultimately? Who gets bought; who goes away? I've not even mentioned AIG which is looking for a $40B loan from the government.
But there are some that have speculative money cached for just this purpose, and prudent speculation can be well rewarded. And when one cannot determine the line between prudent v. imprudent, there is much to recommend about standing on the sidelines.