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https://www.bloomberg.com/opinion/articles/2015-09-03/should-donald-trump-have-indexed- https://www.bloomberg.com/opinion/articles/2015-09-03/should... This Bl

https://www.bloomberg.com/opinion/articles/2015-09-03/should-donald-trump-have-indexed- https://www.bloomberg.com/opinion/articles/2015-09-03/should... This Bloomberg articles goes into our hypothetical discussion. Basically it concludes that if he was to time the stock market margins perfectly he would have made out a bit better in the long run. But that's with great timing of the market, which is hard. Also anyone will say you need to diversify your portfolio, not just dump it all in index funds. Then you have to factor in passion. Trump loves real-estate, why just invest money in the S&P 500 and hope you play all your cards right when you have a passion in a different investment strategy? "The simplest version of the comparison seems to be that if Trump had taken his $40 million inheritance from his father in 1974, converted it into cash, and invested it in the S&P 500, reinvesting all dividends and spending no money along the way, he'd have about $2.3 billion or so today, depending on how you do the math. Bloomberg computes his actual net worth as $2.9 billion, so he's modestly outperformed the S&P over his career, again depending on how you do the math." So he modestly outperformed a typical investment strategy, built a brand for himself, and did what he loves. I'd call that winning. Also an important tidbit from the article: "That, however, understates his performance. For one thing, if he put all his money in index funds and reinvested all the dividends for 41 years, he'd be dead, because you can't buy food with reinvested dividends. As an investing strategy you can't beat compound returns, but as a strategy for life food has key diversification benefits. Also I feel like Trump has unusually high consumption expenses? For instance, to choose one item at random, I gather that he is currently funding his own campaign for president. That would also eat into his returns."

NicoJuicy 8y ago
40 million of his dad? You didn't read about the real estate. That is way too little. Calling him a winner is believing in fairy tales when you are > 15 years old, because your mom says it's true. And guessing that he funds it himselve is a big if. The only thing I believe is the the loan has been paid back with the tax reductions, he didn't had to pay it himselve.
- s_y_n_t_a_x 8y ago
  "You didn't read about the real estate." What are you talking about? His father gave him a $14-60 million dollar loan depending on who you ask. If you're talking about the real estate Trump's family received after his father's death, that was around 2004, but you're conflating that with the initial speculation that he should have put that in the stock market. That would have been a VERY bad move as the stock market crashed in 2008. EDIT: I hit my posting limit apparently. To your reply, you're simply wrong. Overall he performed better in the long run. There were periods of time where he could have performed better in index funds, but that would require good timing and shifting of funds. It's not exactly easy to liquidate real estate and shift it to index funds either. Here's the article without a paywall (I didn't receive one though) https://outline.com/4FNxkP https://outline.com/4FNxkP I'm not sure how you're calculating it differently than Bloomberg is, but their numbers add up. EDIT2: Yes his father died in 1999, but his liquid assets were received by his children in 2004. It takes awhile to liquidate real estate. Either way, my point still stands. $20 million was split between the Trump children, which they sold off for around $500 million (split equally). That's furthering the argument that real estate is a good investment, you wouldn't get those returns in a low-risk index fund. Especially with the impending 2008 crash. EDIT3: You stopped reading after the 3rd paragraph that has nothing to do with the discussion? The article makes the calculation for the S&P 500 investment strategy and compares it to his net worth, which Bloomberg calculated to be lower than Forbes... LASTEDIT: You don't need a tax return to determine someone's net worth. Most people don't release their tax returns. In fact a tax return won't tell you enough information alone to determine someone's net worth.
  - NicoJuicy 8y ago
    I read your comment, not the paywall. Read my previous one about the tax-scheme ( with source) and redo the calculations. Also, you mention a loan and I mention inheritance. So he seriously underperformed the S&P 500 all of the sudden. Edit: his father died in 1999 Edit 2: One particularly interesting fact is that the Trump Organization, according to its chief financial officer, made a profit last year of somewhere between $275 million and $325 million, on $605 million of revenue. That's pretty good! Stopped reading after this. It's not based on facts, but according to the Trump organization, which... Are not facts. I only trust numbers ( eg. Tax filings) to see someone's performance. Let's let this rest ( no use / benefit for this discussion) + I'm going out. Last edit: like I mentioned else, I want to see tax filings to see if I'm correct and if he really is "successful", all the rest is guessing.

NicoJuicy 8y ago

40 million of his dad? You didn't read about the real estate. That is way too little. Calling him a winner is believing in fairy tales when you are > 15 years old, because your mom says it's true. And guessing that he funds it himselve is a big if. The only thing I believe is the the loan has been paid back with the tax reductions, he didn't had to pay it himselve.

s_y_n_t_a_x 8y ago
"You didn't read about the real estate." What are you talking about? His father gave him a $14-60 million dollar loan depending on who you ask. If you're talking about the real estate Trump's family received after his father's death, that was around 2004, but you're conflating that with the initial speculation that he should have put that in the stock market. That would have been a VERY bad move as the stock market crashed in 2008. EDIT: I hit my posting limit apparently. To your reply, you're simply wrong. Overall he performed better in the long run. There were periods of time where he could have performed better in index funds, but that would require good timing and shifting of funds. It's not exactly easy to liquidate real estate and shift it to index funds either. Here's the article without a paywall (I didn't receive one though) https://outline.com/4FNxkP https://outline.com/4FNxkP I'm not sure how you're calculating it differently than Bloomberg is, but their numbers add up. EDIT2: Yes his father died in 1999, but his liquid assets were received by his children in 2004. It takes awhile to liquidate real estate. Either way, my point still stands. $20 million was split between the Trump children, which they sold off for around $500 million (split equally). That's furthering the argument that real estate is a good investment, you wouldn't get those returns in a low-risk index fund. Especially with the impending 2008 crash. EDIT3: You stopped reading after the 3rd paragraph that has nothing to do with the discussion? The article makes the calculation for the S&P 500 investment strategy and compares it to his net worth, which Bloomberg calculated to be lower than Forbes... LASTEDIT: You don't need a tax return to determine someone's net worth. Most people don't release their tax returns. In fact a tax return won't tell you enough information alone to determine someone's net worth.
- NicoJuicy 8y ago
  I read your comment, not the paywall. Read my previous one about the tax-scheme ( with source) and redo the calculations. Also, you mention a loan and I mention inheritance. So he seriously underperformed the S&P 500 all of the sudden. Edit: his father died in 1999 Edit 2: One particularly interesting fact is that the Trump Organization, according to its chief financial officer, made a profit last year of somewhere between $275 million and $325 million, on $605 million of revenue. That's pretty good! Stopped reading after this. It's not based on facts, but according to the Trump organization, which... Are not facts. I only trust numbers ( eg. Tax filings) to see someone's performance. Let's let this rest ( no use / benefit for this discussion) + I'm going out. Last edit: like I mentioned else, I want to see tax filings to see if I'm correct and if he really is "successful", all the rest is guessing.