Donald Trump “has a good brain and he’s said a lot of things,” which is why he often “speaks with himself” when he needs advice.
Be that as it may, Trump has apparently chosen to give his “good brain” a well deserved break when it comes to investing the portion of his net worth that isn’t tied up real estate because according to FEC filings, he has some $121 million stashed away in nearly two dozen funds run by a variety of asset managers including John Paulson and BlackRock.
The problem: they’re performing horribly.
“Eighteen out of 21 hedge funds and mutual funds in Trump's portfolio lost money in 2015, and 17 of them are down so far this year,” Reuters reports. “The funds managed by Paulson & Co, BlackRock Inc, Baron Capital and others lost an average of 8.5 percent last year and are down another 2.9 percent so far this year.”
“By the looks of it, Mr. Trump's investing prowess is very pedestrian," Brian Shapiro, chief executive of Simplify LLC, which tracks and analyses alternative investments like hedge funds told Reuters.
"For someone who prides himself on being surrounded by the best talent, I'm surprised to see so few winners," added Brad Alford, an investment advisor and CEO of Alpha Capital Management.
Now wait just a minute Brad. Did you just suggest that Donald Trump is a “loser?”
What say you, Trump?
"You can't measure it in a short time. I'm way up with BlackRock. I'm way up with Obsidian," the billionaire responded.
Trump is referring to a BlackRock fund that was hit by plunging commodity prices. He also ran into trouble investing with John Paulson, who hasn’t been able to get out of his own way for years and at this point is pretty much relying for survival on people remembering that once upon a time he called the housing market crash.
“The three Paulson funds used by Trump all fell [and] one of the funds, the Paulson Advantage Plus fund, had declined an average of about 22 percent every year over the last five years,” Reuters continues.
One can’t help but recall the following tweet that emanated from the official account of Massachusetts Senator Elizabeth Warren, who earlier this week suddenly blew a gasket and launched into a Kanye West-style Twitter tirade aimed at the GOP frontrunner:
Listen to experts who say @realDonaldTrump might have more money today if he’d put his inheritance in an index fund & left it alone.— Elizabeth Warren (@elizabethforma) March 21, 2016
If you’re like us, you’re confused at this point. How could it be that a man who has never lost at anything could possibly be down in 18 out of 21 of the investment vehicles he presumably chose?
And then, we got our answer. "I put some money with people that are friends,” Trump explains. “I have no idea if they are up or down.”
There you go. Trump didn’t choose the funds. If he had, he’d have gone with something that can’t possibly lose. Like say an offering from the Fed’s leveraged PPT squad. Here’s Reuters again: “Some investing experts who looked at Trump's portfolio and Reuters' compilation of their performance were not impressed, saying he could have earned better returns by investing in other hedge funds. For instance, Citadel gained 14.3 percent in its main multi-strategy hedge funds.”
But at the end of the day, Trump doesn’t need vacuum tubes, or quants, or the 2 and 20 crowd to invest his money for him. Why? Because when he does choose individual stocks, his record is flawless. Just ask him about a series of sales he made two Januarys ago for some $27 million.
"I bought them low and I sold them high. It was very good timing. I hit the market exactly perfectly."
We’d expect nothing less.
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