(May 31, 2016 at 3:00 pm)paulpablo Wrote: I don't know much about investments, but I find it hard to believe this billionaire is not a successful businessman because he didn't invest in this specific thing.
Most businesses fail, so even if Donald trump has broke above even it's still successful.
That's not what I'm saying at all.
Let me break it down.
In order to determine whether a thing is "good" or "bad", one must have a standard to judge it against.
In the investing world, one such benchmark is the S&P 500. There are others, but this is suitable for our purposes.
Any drooling idiot can invest in a mutual fund that achieves the returns of the S&P 500 index. This is done by virtue of the mutual fund being invested in all 500 companies that comprise the fund, weighted exactly as they are in the index. Minus brokerage fees (which for no-load funds are minimal), any drooling idiot can match the performance of the S&P 500. Performance is measured by the metric "return on investment" (or ROI).
Or, one can do as Trump has chosen, which is to manage one's own portfolio of investments, who's performance is likewise going to be measured by the same metric, ROI.
Trump's ROI on the money he inherited lags the ROI of the S&P 500 over the lifetime of his investing career. Ergo, Trump has underperformed an investment vehicle suitable for those who know absolutely nothing of investment and business, and who may in fact be drooling morons. Trump would be more successful if he had simply put his inheritance into index mutual funds and gone off to work on his golf game. Ergo, Trump is a bad (albeit rich) businessman - but his riches have little to do with his business acumen.
Now, if Trump had made wise investment choices, with his inherited wealth, it should be no problem at all to at least match investment benchmarks. He has failed to do so, ergo he has made unwise business decisions, and is in fact a poor businessman.
If you don't understand the implications of the above, I cannot help you further.
