Donald Trump enjoys bragging about his business wizardry and his wealth. Yet it is well known that he has been close to bankrupt….or at least not even worth a measly billion….as recently as a decade or two ago. Some reports say he would have made more money if he simply sold his Dad’s company and took that – and any cash inheritance – and invested it into the S&P (stock market).
If so – all these decades of bankruptcy, investment losses for banks and bonds, stiffing contractors and poor people (Trump U), etc…..would only be an exercise in poor management! This can’t be true – right? After all, the many is a business genius…or is he?
Let’s apply two well know scenarios to his life and investments.
Firstly, there is no final figure as to the value that Trump received from his father and mother. Estimates of the value of their companies were in the average range of 200 Million – plus whatever they had in cash and other investments. Donald took over most control in 1973. For the purposes of our calculations, we will be very conservative and say that he had only a small fraction of that money – say 60 Million dollars, by 1975.
Investing 60 Million in the S&P in 1975 would result in a 10,000% gain, or put another way, he’d have 6 BILLION dollars instead of the 3 or so he has today. Worse yet, depending on when you “stopped the clock” he did even worse at many times.
Just imagine if Trump would have put the money into Berkshire? Then he’d be a real billionaire and wouldn’t have had to sell out to Putin and friends.
Just for fun, taking a lower level of 100 Million total that Trump got from inheritance and initial value increase in Dad’s real estate empire – Don became truly active and President of the companies in 1973.
If, in 1975, he invested 60 Million in Warren Buffer, that would be worth…
Well, it works out this way. $1,000 invested in Buffet in 1975 would be worth over 3 MILLION today.
So for each MILLION Don the Con might have trusted to Warren, he would get 1,000X that 3M, or 3 BILLION. Since he could have invested 60 Million easily, that would mean he would be worth 180 BILLION today, more than double what Buffet himself is worth and probably 60X or more what Trump is.
Think of all those bondholders and investors and contractors who would have not been screwed….and now think of how bad WE are getting screwed.
No wonder they call Buffet The Oracle. Trump lost 177 BILLION dollars by relying on himself rather than investing his money sanely with a mutual fund run by a well known investor.
Please correct my math if I am wrong!