Trump's Business Acumen

O

Oneuli

Verified User
In the wake of the New York Times's revelations about just how much of his father's money Trump got, I think it's worth revisiting the issue of how much business skill Trump actually had.

The myth of Trump is fairly simple: he took a loan from his father of $1 million, and grew it into a business worth many billions of dollars, thanks to his brilliant investments.

Even before the extent of Fred's handouts to his son were clear, the legend of Donald's business sense never added up, mathematically. For example, between 1982 and 2018, Forbes says his net worth grew from $100 million to $3.1 billion:

https://www.cnbc.com/2018/10/02/trump-forbes-400-spot-tumbles-as-net-worth-declines.html
Trump Net Worth History

That would be an annualized return on his fortune, in that timeframe, of 10.0%. Over the same period, any moron with a passively managed index fund would have gotten 11.827%:

https://dqydj.com/sp-500-return-calculator/

So, a completely mediocre investor, starting where Trump did in 1982, should be worth about $5.6 billion today, which is 81% higher than Donald Trump.

Now that we realize just how much Trump got in hand-outs from his father, it looks even worse. According to the NYT article, these contributions from his mega-rich father's business added up at least $413 million in value, in today's money. There are lots of questions about the legality of these transfers, which were done by way of shifty schemes of giving deliberately under-valued gifts, to avoid paying taxes. But I'd like to set those aside and just look at it in terms of how this reflects on Trump's investing skill.

According to the NYT article, Trump was being transferred $200,000 per year from his father's fortune starting as a toddler, such that by age 8 he was a worth at least $1 million.

https://www.nytimes.com/2018/10/02/us/politics/donald-trump-wealth-fred-trump.html

Projecting forward $200k per year in transfers from age 3 to 18 and a reasonable return on the trust fund investments, Trump should have been worth well over $10 million at age 18. Yet, that would "only" involve a transfer of $26.4 million from daddy to Donnie, in today's dollars ($200k per year, each adjusted by inflation to 2018 dollars). The NYT says he eventually got a total of $413 million in today's money from his father. So, he'd have had to average a transfer of $3.054 million per year, in nominal dollars, if distributed evenly, from age 18 until his father's death in 1999, to hit that lifetime total of $413 million in today's dollars.

So, based on an assumption of $200k per year from his father from age 3 to 18, followed by $3.054 million per year after that, until his father's death, what would Donald Trump be worth today if he'd just put his daddy's financial gifts into a passively managed index fund, and never did a day of active investing or other work in his life? In other words, if Donald Trump has been born severely retarded, and Fred had made all the same wealth transfers to him but without letting him play with the money, what would Donald be worth today?

The answer: $11.725 billion. The real Donald Trump, "brilliant businessman," is worth about 1/4 as much as the hypothetical Donald Trump who'd been born so mentally deficient that he couldn't be trusted make any decisions about the money, or even to get a job. That makes the real Donald Trump a shockingly terrible investor. Yet the mythology about his business skill was (aside from the racism, sexism, etc.) the very core of his sales pitch when he ran for president.
 
Last edited:
His skill is scamming people and self-promotion.

He is literally too dim-witted, uninformed, and shallow to be a genius businessman.
I don't even think this fat fuck could make it in the corporate world. He is not a team player. It is not 1968 anymore, and pussy grabbing, unearned braggadocio, relentless lying, and lack of mental acuity just don't cut the mustard.
 
Stretch said:
So, he was rich? He had money and he made money. What's the problem?
Click to expand...

Democrats just don't understand business. Trump was even able to overcome obstacles when local banks started blackballing him. He was able to find new investors willing to partner with him without a problem.
 
Stretch said:
So, he was rich? He had money and he made money. What's the problem?
Click to expand...

Try rereading. I'll give you a hint: the point wasn't to argue there was a problem with him making money. It was to point out that he was a really, really terrible investor, whose wealth is due entirely to his father's hand-outs.
 
hvilleherb said:
Democrats just don't understand business. Trump was even able to overcome obstacles when local banks started blackballing him. He was able to find new investors willing to partner with him without a problem.
Click to expand...

the Russians


why did they stop lending to him?


because he kept not paying his loans
 
Cypress said:
His skill is scamming people and self-promotion.
Click to expand...

Yes. But I'm not even sure he's terribly skilled at that. If he'd been born poor, and had to hustle to put together scams without his father's money and name, would he have been even moderately successful? Or would he have been one of those Ralph Kramden types, who always had some harebrained scheme for making it big, but never got very far? Would he have been a three-card-monty scam artist, out on the street, barely clearing the poverty level despite being completely unburdened by ethics and empathy?

Given the way his return on his father's hand-outs was far below even the level of mediocrity, I'm not sure he was all that skilled at running a con.... at least a business con. His political con was somewhat more successful (though even there, three million more people voted against him than for him).
 
evince said:
he didn't make money

he spent and wasted daddys money
Click to expand...

Exactly. If the NYT is even close to right about the cumulative value transferred from his father over the years, Trump's own efforts amounted to a massive negative value, relative to a "par for the course" return like you'd get in a generic index fund, with the same handouts.
 
hvilleherb said:
Democrats just don't understand business. Trump was even able to overcome obstacles when local banks started blackballing him. He was able to find new investors willing to partner with him without a problem.
Click to expand...

Trump eventually convinced the mainstream banks that he was a bad credit risk, because he kept running businesses into the ground and stiffing the creditors. With his father dead and no longer to keep trickling money to him to act as collateral to make it palatable to the banks, Trump needed to turn to Russian gangsters and Putin-aligned oligarchs to take on Fred's old role of keeping him afloat in the face of the waves of his own incompetence. For a while, it was unclear why they'd be willing to lose so much money on him. Now, it's no longer unclear.
 
Oneuli said:
Exactly. If the NYT is even close to right about the cumulative value transferred from his father over the years, Trump's own efforts amounted to a massive negative value, relative to a "par for the course" return like you'd get in a generic index fund, with the same handouts.
Click to expand...

they were given family papers by someone who knew or was related to Fred T.


they are Freds papers
 
Oneuli said:
Trump eventually convinced the mainstream banks that he was a bad credit risk, because he kept running businesses into the ground and stiffing the creditors. With his father dead and no longer to keep trickling money to him to act as collateral to make it palatable to the banks, Trump needed to turn to Russian gangsters and Putin-aligned oligarchs to take on Fred's old role of keeping him afloat in the face of the waves of his own incompetence. For a while, it was unclear why they'd be willing to lose so much money on him. Now, it's no longer unclear.
Click to expand...

Putin became his NEW daddy
 
Bigdog said:
B.O. had ZERO Business Acumen :palm:
Click to expand...

Obama was never a businessman. He was a lawyer, community activist, and politician. Yet, in terms of how he advanced his net worth, he was vastly more successful than Trump. Trump's net worth grew at far below the pace of generic investments, despite huge handouts from his father. Obama, on the other hand, went from obscure and modest origins to great financial success. He started as the child of an immigrant, as a member of a disadvantaged minority, and was raised in a broken home, and yet he went on to be a multi-millionaire.
 
Bigdog said:
B.O. had ZERO Business Acumen :palm:
Click to expand...
it showed.
he regulated the economy to such a measure GDP was stunted.In other words he was a drag on the economy.

Trump comes in and takes off the brakes,and gives it a little gas....BOOM
 
You must log in or register to reply here.
Back
Top