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Is Trump really the great stock picker he claims to be?

Michael Santoli
Michael Santoli
Is Trump really the great stock picker he claims to be?

Leave it to Donald J. Trump to turn a bureaucratic disclosure form into a chance to boast about how good he is even at things he doesn’t try hard at.

Trump’s chest-thumping statement on his personal financial disclosure to the Federal Election Commission - after claiming in all-caps that he’s worth more than “TEN BILLION DOLLARS” – makes special note of his prowess at playing the stock market with his play money.

The Republican presidential contender’s press release says: “Even though stock market purchases are not something that Mr. Trump has focused on in the past, and while only a small part of his net worth, 40 of the 45 stocks purchased went up in a relatively short period of time, creating a gain of $27,021,471, not including those stocks still remaining in the portfolio which currently have an unrealized gain of over $22 million.”

Related: Donald Trump still has a money problem, no matter how rich he is

The attached schedule of stock transactions shows that Trump sold $94.4 million worth of stock as of Jan. 31, 2014, having paid $67.3 million at an unspecified earlier date. The realized gain on the stock transactions provided was 40.1%.

It’s impossible to gauge the relative skill of Trump’s stock picking because of the lack of a start date. But here’s a guess that he probably acquired the portfolio during 2012 or near the start of 2013. From Dec. 31, 2012, through Jan. 31, 2014, the Standard & Poor’s 500 gained just under 40%. And given the makeup of the stocks Trump owned – a generic list of widow-and-orphan style blue chips – his account would have tracked the broad, large-cap benchmark pretty closely.

The 45 stocks listed include more than half of the 30 members of the Dow Jones Industrial Average, plus Facebook Inc. (FB), Amazon (AMZN) Tiffany & Co. (TIF), Yahoo Finance parent Yahoo Inc. (YHOO) and a smattering of other household-name stocks.

Indeed, at least a sizable part of the portfolio at least has the look of an investment firm’s separately managed stock account, given the roughly equal dollar amounts of just under $1 million paid for about three-quarters of the 45 stocks.

The per-share cost of his 12,800 shares of Apple Inc. (AAPL) is $66.43 (adjusted for the stock split subsequent to his purchase), which was Apple’s price in early February 2012. It also got back there in early-to-mid 2013. He booked an 18.5% gain in Apple as of Jan. 31, 2014 – missing the subsequent 75% surge since then.

He bought Facebook well, paying just over $19 a share –which must have been in mid- to late 2012 – and rode it until the stock tripled. Since he was out of the stock, it’s run another 43%.

The biggest losers in the portfolio were energy stocks, losing 36% in Noble Energy (NBL) and nearly 10% in Enbridge Inc. (ENB).

Meantime, his mixed results in high-powered hedge funds shows the way that mom-and-pop stocks have outperformed those pools of capital reserved for the wealthy.

He’s sitting on modest losses on his $10 million investment in three hedge funds run by John Paulson, whose great success betting on disaster ahead of the financial crisis gave way to a tough few years of lean results.

Bottom line: Trump’s nice windfall in stocks seems to have had more to do with Trump’s timing in riding a strong patch of a sturdy bull market than with any particular genius in selecting great stocks.