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.”
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%.
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.