I keep seeing people say this, but I'm not sure it's true.
He took a loan of a few million from his father and turned it in to a billion dollar empire.
It's difficult to do that without some measure of intelligence.
He almost lost that billion dollar empire in '94, but recovered and built it back up again in to a billion dollar empire.
It's more difficult to do that without some intelligence.
He also out-played all his Republican opponents in the primaries and then Hillary in the general election.
It's even more difficult to do that without some intelligence.
I remember all the pundits talking about Trump's strategy to win the election and how he didn't have ground game, and it was stupid to be doing all those rallies and campaigning in the states he was campaigning in, and yet it was that very strategy that won him the election.
And all those outrage inducing comments and tweets that keep him in the media spotlight and earned him some $2 billion in free advertising..
If Trump is not intelligent, what does it say when Trump seemingly always manages to outsmart his opponents?
How many times does it have to happen before you can no longer dismiss it as dumb luck?
http://fortune.com/2015/08/20/donald-trump-index-funds/
What kind of business genius does it take to lag S&P 500 that badly? If he had done absolutely nothing with his dad's money, except park it in an index fund, he'd be 4 times richer.
The article linked also compares the investment performance of Bill Gates and Warren Buffett. You can see quite a big difference.
That's actually not correct. He says he got a $1,000,000 loan in 1975.
The Fortune article picks a time 13 years after his first loan, and coincidentally at the start of a bull market. I'm not sure how that comparison is valid.
See a more thorough analysis here:
https://dqydj.com/donald-trump-beat-sp-500-index-funds/
Which indicates that if you count from when he started, he did beat the market.
Interestingly, I think the fact that he's quite stupid may be how he succeeded at the presidential election. An intelligent, principled person would have a vision and philosophy that guides their actions. When questioned on details or specifics they would use their philosophy to arrive at a reasoned answer.
Trump has essentially no record of this. He has no governing philosophy or sophisticated understanding of how the world works. He seems to do nothing but say what he feels in that moment -- even if how he feels isn't backed up by any reality.
However, in certain election environments that can also be a huge benefit. If the electorate is looking for a foil, someone to reflect their feelings, and the electorate itself isn't acting on calculated reasoning, the dunce with an acute sense of emotional environment is the perfect avatar.
In a sense, the reasoned candidate is at an inherent disadvantage since they will attempt to articulate a particular philosophy. If the electorate is mostly a coalition based on shared emotional reaction, stating a clear philosophy can do nothing but weaken support among your own constituency. In essence, being specific allows people to disagree with you. If you hand wave, they just imagine you think like they do, since they already think you feel like they do.
I can think of another group of people who a similar skillset: confidence artists. They're often not very bright or very skilled, but they are good at reading a room, a person, and an emotion. Interestingly, I don't believe Trump believes himself to be a con-artist; he's just a natural.
No they're not, the link I provided also showed figures based on Forbes estimate of his net worth.
$40,000,000 (Trump's share of his father's fortune) invested in the market in 1974 would be worth $1.22 billion in 2015 (when he announced his campaign).
Compared to Forbes estimate of his net worth at $4.5 billion and Trump's own estimate of his net worth at $10.0 billion at the same date. Both beat the market handily and in fact Forbes could have overestimated his fortune by triple the amount and Trump would still be ahead.
> An intelligent, principled person
Again, I'm not talking about principled, I'm making the argument purely that Trump is intelligent. Not whether he is principled, or a good person, or a good businessman or even if he's a good president.
> He has no governing philosophy
I don't know about that. From what I can tell, he seems to consistently follow the same or similar playbook outlined in 'The Art of the Deal'.
The ghostwriter of that book says he made the whole thing up, because Trump got bored so quickly he wouldn't sit for an interview longer than 10 minutes.
If you look at what the book talks about and you see how Trump acts, there are many similarities.
How did you get that number? Did you include re-invested dividends?
If you start in October 1974 and end in June 2015, you get a return of 9817.096% with dividends reinvested and only 2923.171% without [1]. So starting with $40 million you would end up closer to $4 billion. Admittedly that is after fiddling with the months to maximise the return.
> Compared to Forbes estimate of his net worth at $4.5 billion ...
There is a good chance that the $4.5 billion Forbes estimate is a significant overestimation. There is no downside for Forbes to overestimating his fortune, but a significant one in underestimating: they risk getting sued by Trump. See [2], on how he lost a lawsuit in 2006 when a journalist claimed that he was only worth $250 million. It also contains examples of how Trump inflates his net worth. The fact that he still hasn't released his tax returns and has no plans to do so, also speaks volumes.
> ...and Trump's own estimate of his net worth at $10.0 billion at the same date.
Given his long history of lying his own claim is useless.
[1] https://dqydj.com/sp-500-return-calculator/
[2] http://www.forbes.com/sites/chasewithorn/2016/03/31/how-dona...
From the site I linked to above (which incidentally is the site [1] you linked to in your post). It includes re-invested dividends and also taxes, which were significantly higher in the late 70's and early 80's compared to what they are now. The page I linked to goes through their methodology.
You make good points about his net worth, but even if I was to concede that, I believe my main point still stands.
He might not be an astute investor, but even if his entire businesses are only worth hundreds of millions, you can't run a company of that size for so long if you "lack intelligence" - even more so if you're building it back up after losing a billion dollars a few decades earlier.
I missed that link. It makes some good points. Of course, if you had $200 million in 1974, and your marginal tax rate was 75%, you would not hold it in person but would shield it in a corporation. I'm sure his tax lawyer would have found some structure that would have brought down his taxes significantly.
> you can't run a company of that size for so long if you "lack intelligence"
He is not a complete moron, but he is far from a brilliant businessman. And he doesn't seem to have many intelligent insights outside of business.
He is good at selling an image that appeals to a lot of Americans, though.
> even more so if you're building it back up after losing a billion dollars a few decades earlier.
How do you lose a billion dollars? Does that take a special kind of intelligence? Or does it maybe indicate that he takes irresponsible risks that sometimes pay off, but sometimes go horribly wrong? Could his relative success be explained by survivorship bias?
I'm not claiming he is a brilliant businessman. I'm only disputing the assertion that he "lacks intelligence", which is what started this side-thread.
> How do you lose a billion dollars?
Many different ways. For example, Hillary spent over a billion dollars on her losing campaign, but I don't assume that Hillary lacks intelligence because of this.
> Could his relative success be explained by survivorship bias?
It could well be, and again I'm not ascribing any sort of "special intelligence" to Trump, just that I don't agree that he "lacks intelligence".
Not her personal wealth
Losing a billion dollars is easier than you think, because even if you're intelligent, sometimes circumstances conspire against you.
You know Forbes is just a business magazine, and just a small one at that?
They don't have any privileged information. They probably just based their reporting on his self-reported wealth. At best they could look at the public valuations of some of his properties, but since the Trump organization is privately held they have no way of knowing how badly he's leveraged.
Here's a hint: check how much Forbes said Elizabeth Holmes was worth in 2015.
> I don't know about that. From what I can tell, he seems to consistently follow the same or similar playbook outlined in 'The Art of the Deal'.
That you don't see the difference between a set of strategies for making money in real estate and a governing philosophy of how you see the world and act as a person is the crux of the problem.
I'm simply pointing out observable reality.
'Art of the Deal' may just be a set of strategies for making money in real estate, but those same strategies seem to guide how he sees the world and acts as a person.
I'm not making any judgement about whether that is a good or bad thing, but failing to understand that means failing to understand Trump.
1. Think big
2. Protect the downside and the upside will take care of itself
3. Maximize your options
4. Know your market
5. Use your leverage
6. Enhance your location
7. Get the word out
8. Fight back
9. Deliver the goods
10. Contain the costs
11. Have fun
His only statements on normative, not positive, values come from things like "America winning" and "being great" and "going back." But it absolutely true that, for many Americans, these are a contradiction in terms.
I can attempt to infer his values from these vague statements, but I think that it is improper for a leader to not start with a set of first principles, independent from ill-defined notions like "winning", that guide what it means to win and what it means to be great.
Well, there's a whole book that goes in to specific details about those vague statements, so you don't have to infer much at all about what he means by them.
Much of the crazy, and supposedly unpredictable things Trump does, follows the playbook laid out by Art of the Deal. He's been following the same script for decades, and people are somehow surprised when he keeps doing the same thing.
> but I think that it is improper
I'm not commenting on the propriety or value of Trump doing this, just pointing out that he does do it (whether others think it improper or not).
Love him or hate him, if you want to understand him, the Art of Deal provides insight on that.
Well, not those statements specifically, it describes that type of statement and Trump's rationale for using them.
Here's a quote -
"The final key to the way I promote is bravado. I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular.
I call it truthful hyperbole. It’s an innocent form of exaggeration — and a very effective form of promotion."
So, it's a promotion tactic to get people thinking positive and thinking big, but also, the vagueness means that each person can attribute it to whatever is important to them, which leads to much stronger engagement and emotional connection.
For instance, there's an inherent conflict between freedom and security. The government and the people must strike a balance on these issues. How does Trump decide what the right balance is? What philosophical principles does he use to decide how much freedom we should be willing to trade for security?
You seem to believe that either winning elections or making money are satisfactory demonstrations of intelligence (as meant by IQ, or g). I do not.
I would be happy to reconsider if he released a simple IQ test, or even his old SAT scores (assuming he took the SAT).
See the other comment about how he'd have much more money if he'd plowed his inheritance into an index fund. It's been a story that cropped up every few years for the last decade. He's a bad businessman who keeps going bankrupt and borrowing money from greater fools. This last time, it seems he went into debt to the Russians. Maybe Putin is not so foolish.
Honestly, I think he didn't release his tax returns because they'd show he's actually broke and living off borrowed cash.
> always manages to outsmart his opponents?
Right time, right place. I've seen inept people "succeed" so many times, it makes me weep. But hey, no one likes to hear bad beat stories.
See my other comment about how that's not actually true, but in any case we are not talking about how much money he could have made, or whether he is the most intelligent out of all businessmen, but whether or not he is intelligent.
I would argue it takes more intelligence to run a multi-billion dollar empire than it takes to invest in an index fund, even if the index makes larger returns in the long run. Not everyone is motivated by money, especially if your net worth is several hundred million dollars, which it was for Trump at the point when Fortune started the calculation that he would have been better off investing in an index fund.
> He's a bad businessman who keeps going bankrupt
6 times out of 100+ businesses? That's not a bad strike rate.
> This last time, it seems he went into debt to the Russians. Maybe Putin is not so foolish.
> Honestly, I think he didn't release his tax returns because they'd show he's actually broke and living off borrowed cash.
And there was me thinking it was the Right that was in to conspiracy theories.
No conspiracy, just one guy. He's said in court deposition (for a lawsuit he lost) that he claims his net worth is however he's feeling that day.
> 6 out of 100+
Not all the businesses are equivalent, nor are most of them really his, beyond selling a license to his name.
The Trump Organization is less than 200 people, closer to 100. It's mostly real estate deals, not even building management. Not really what comes to mind for the phrase "empire". He certainly wants that, though.
No, they're not, but the fact still stands that bankruptcies make up only a small portion of his total businesses, even when taking away ones he's only licensed his name to.
> The Trump Organization is less than 200 people, closer to 100.
CNN (notoriously anti-Trump) calculates Trump has created around 34,000 jobs.
http://money.cnn.com/2015/09/03/news/economy/donald-trump-jo...
Not sure where the 100-200 people statistic comes from, but it seems a little on the low side.
There are plenty of things to criticize Trump about, but making things up to make him look bad reflects badly on the person making things up, not on Trump.
I did a brief search for "Trump Organization employees" and can't find the article I read last week. So, my apologies, I'll just have to say that I read it in a reputable newspaper.
Still, I find it plausible that Trump Organization directly employs a handful of people and the rest of the 22k are employees of subsidiaries.