As measured from market peak year to trough year, real estate investor performs poorly

Breaking news from the New York Times:

Newly obtained tax information reveals that from 1985 to 1994, Donald J. Trump’s businesses were in far bleaker condition than was previously known.

My comment:

This is shocking news indeed. 1985-1994 were such great years to be in the real estate business for everyone else. (Except maybe for the 300 or so Savings and Loans that had to be shut down by the FDIC (costing taxpayers more than $100 billion) due to real estate loan losses. And also perhaps for the 1600+ banks that were closed, merged, or bailed out.)

How about a headline “As measured from market peak year to trough year, real estate investor performs poorly”?

I am desperate to see the Times publish an article with a headline of “If Trump loses only one or two more $billion, he will need to trade the family Boeing 757 in on a flight school Cirrus.” I am ready with the photo illustration:

(Captured this weekend at KSWF on the way down to Washington, D.C. with an instrument flying student. Note blackface kit installed in case we needed landing clearance from Virginia Democrats at Dulles Airport. Also, if Trump is anti-Mexican, how come his base FBO was having a big Cinco de Mayo celebration?)

[The NYT article does not contain any information on how much money Donald Trump actually made or lost in any given year. It was previously reported that Trump was somehow able to deduct as business losses for himself money that had been put in by investors (i.e., he was able to deduct on his tax return far more than his actual cash losses). So the tax gains or losses aren’t related to Trump’s actual cash gains or losses.]

9 thoughts on “As measured from market peak year to trough year, real estate investor performs poorly

  1. It is a bit interesting, though, that basically DJT’s fortune has always been highly leveraged long commercial real estate, like a stubborn ass. Characters in the biz like Sam Zell repeatedly got in and out of the same trades over the relevant time period to better profit.

  2. Trump is not good at business. He is good at pretending. Good businesses provide a great product or service at a fair price and manage to make a profit from it. I would argue that most businesses exist to pay their executives and shareholders well, and provide minimally acceptable products and services to their customers while treating their employees badly.

  3. Reporting on financial matters is very rarely done properly because most journalist have zero background and are completely reliant on someone to explain things to them — people with the ability to make money usually do so rather than write about it. So the concept of “losing” or “making” money is not a financially clear one — real estate businesses generate lots of depreciation which is subtracted from revenues to arrive at income. But that is only an accounting concept that may or may not have anything to do with what most people think of as making or losing money. And the objective of smart developers is to generate lots of depreciation (losses) that can be offset against revenues and thereby reduce the taxman’s take. The Times’s objective is to make Trump look incompetent, which may or may not be deserved — but it would not be possible to tell from the reporting.

    • > Reporting on financial matters is very rarely done properly
      How is it different from any other line of business or domain of knowledge? I claim to have some knowledge in math, computer science, theoretical physics, computational biology, and finance (yes, I’m that old), and most articles have been almost stupidly false.
      And it’s getting even worse these days as most reporters try to overlay their political agenda.

    • Jack, he lost roughly a billion! dollars in a decade. How does one convince themselves that there’s some kind of hidden genius behind that. Since you’re an armchair journalist critic and financial analyst, do give us a single plausible example of how one could have a billion in losses, yet somehow be “making money.”

  4. Senorpablo – depreciation deductions and passive loss carry forwards are key here. So for tax purposes Trump could show that he “lost money” but on a cash basis he could very well have been making money. Jack is right.

    • Give me a break. Real estate depreciation is 3.33% per year. Yeah, ok, maybe he made some money in the 11th year. Otherwise, it’s the ol’ lose money on every sale, but make it up in volume business plan. I’ll say it again, provide one plausible example of how one could show losses of a billion dollars over ten years and make money. Trump is a bigly loser.

    • How can one lose a billion dollars yet make money?
      Suppose you own two LLC companies. One of them loses a billion dollars. And?
      In fact, that’s how all VCs operate.

    • If you as a business owner manage to convince the IRS that you lost a billion dollars, congratulations! That’s more than what a successful hack makes in their entire career!

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