Donald Trump is a good businessman? Guess again.
According to the July 6th edition of The New York Times Business Day, a $10,000 investment in Donald Trump’s 1994 IPO is worth approximately $636 today. (Hat tip to Tom Peters for the link.)
In 1994, The Donald had $900 million in personal debt and business debt of $3.5 billion. As a result, Trump skirted the edge of personal bankruptcy several times, and his hotels and casinos holding company emerged from bankruptcy and re-structuring in 2005.
It seems that, in a very real sense, Trump’s “business” is more of a cult of personality than a profit-generating company. Trump has mastered the art of image, but there’s not much backing up his bluster.
By way of contrast, a $10,000 investment in Sysco (a relatively boring food service company) in 1994 would net you $60,877 today. That’s enough to keep you supplied with steak for a long time.
It distresses me that so many people still view Donald Trump as a business role model. In light of the above, you’d do much better emulating Charlie Munger or Howard Schultz.
The moral of the story: great PR and a great business are two different things. Sometimes the “boring” companies perform the best.
(Ironically, Trump is currently trying to increase his profitability by selling steaks.)
{ 1 comment }
After the way Trump flipped on Rosie for criticizing him, this is a brave post.
I’ve read at least one of Trump’s books, but I can’t remember gleaning anything in it that was useful. He recommended picking up golf, which may be good advice in his world, but not so much in mine. It was a lot of advice like that.
I have on occasion enjoyed The Apprentice, which has been successful, but I don’t catch it anymore. I’ve got too much to read to watch a lot of TV these days.
He is not shy about taking risks, and I do like that about him. Maybe he isn’t always successful, but he is always trying things. I wouldn’t count him among my business “role models” but I think something can be learned from just about anybody.
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