Daily Dose of Optimism

Donald Trump & Robert Kiyosaki: Leaders of the American Cargo Cult

Excerpt from the Principles of the American Cargo Cult:

You can succeed by emulating the purported behavior of successful people: To enjoy the success of another, just mimic the rituals he claims to follow.

Here's a preview from an upcoming DDO post:

It's funny how once a someone succeeds - a person, a country - they tend to forget the ingredients of their own success.

It's sort of like listening to Donald Trump tell us that he succeeded as a developer because of "hard work," and not that his Dad's reputation, money and contacts allowed him to do deals that he would never have otherwise been allowed within 100 miles of. It does no one a favor to repeat such lies - not The Donald, who's likely to enter into yet another cockamamie business scheme driven by his inflated "self-made" ego, nor those listening to him, who will be lulled into complacency about the power of contacts for success in the business world.

Nonetheless: I now bring you a seminal event in financial publishing depravity:

Donald Trump, author of the best-selling "Think Like a Billionaire," is teaming up with "Rich Dad, Poor Dad" author Robert Kiyosaki to self-publish a financial advice book expected to hit stores in October.

The title of the new effort, which has been evolving almost daily, is now expected to be: "Why We Want to Make You Rich," with the subtitle, "Two Men, One Message."

This is why you read the NY Post. Who else breaks this kind of news? Surprisingly, this passage from the article actually rings of some truth:

"You can only choose between rich and poor," Kiyosaki told Media Ink. "The middle class is gone."

I would say "in danger of going," not "gone," but perhaps that's a distinction without difference. I also liked this bit:

Trump, a real estate deal-maker and star of "The Apprentice" on NBC, has also had a run of No. 1 best-selling books for Random House, including "Think Like a Billionaire"

Think like a billionaire - a subject Trump knows a lot about. If you can't actually be a billionaire, the next best thing is deluding yourself, right? - Ed

For my prior ramblings on Trump, see here.
For my prior citation on Kiyosaki's Rich Dad, Poor Dad, see here. - Ed

DDO Book Review: TrumpNation: The Art of Being the Donald

The Donald, Godzilla Billionaire of the Business World

(a fictitious creature created for entertainment purposes)

I finally got around to reading TrumpNation: The Art of Being the Donald, Timothy O'Brien's 240-page reinterpretation of the Donald Trump legend. You know, that story about the crazy billionaire real estate mogul?

Summary: TrumpNation is an entertaining and quick read that gives an interesting history of the Trump business "empire" and various shenanigans, from the best (Trump Tower on 5th Avenue) to the worst (everything else).

Donald Trump Sues Tim O'Brien

You may remember this old post on how Donald Trump's wealth has been reported to Forbes over the years. Well, there's more:

Trump is suing a New York Times reporter over a book that quotes anonymous business associates as pegging his net worth at $150 million to $250 million — less than one-tenth the $2.7 billion figure that he deems a conservative estimate of his fortune. [...]

The Times is not a defendant in the case — but Trump's lawyer yesterday alleged that the paper should not have published excerpts from the book because editors knew it was "egregiously wrong."

O'Brien and the Times declined to comment. A spokesman for Time Warner Book Group said it hadn't seen the court papers yet — but noted that Trump "participated . . . extensively and willingly" in the book's research. [...]

Trump pegs his wealth at $2.7 billion — and he bases that figure on Forbes Magazine's annual list of the nation's 400 richest people, on which he ranks No. 87. Link: NY Post

(Yes, this lawsuit is over some of the same information I reprinted on the DDO.)

I understand the gravity of this lawsuit. "Trump" is a brand that is used to sell luxury goods by association with a billionare. If he were really a millionaire, it would all fall apart! Protect the image!

Saying the book was inaccurate but wrong would have been enough. Suing, that's another story. Perhaps, based on what O'Brien's work uncovered...Trump needs the money! - Ed

Tracking Donald Trump's "Rise to Wealth"

This post contains a timeline of how Donald Trump's reported wealth has changed over the years. What an investor might take away from this is some evidence of why we should be skeptical of someone who publicly presents themselves as anything - a billionaire, an entrepreneur, a "success," etc.

The timeline below is from a longer NYT article on Donald Trump, which was written by Timothy O'Brien, and is based on the research he did for his recently released book TrumpNation (a book I just may read).

Of course, for a simple explanation of the timeline below, I'd refer you back to Warren Buffett's assessment of Donal Trump:

Where did Donald Trump go wrong? The big problem with Donald Trump was he never went right. He basically overpaid for properties, but he got people to lend him the money. He was terrific at borrowing money. If you look at his assets, and what he paid for them, and what he borrowed to get them, there was never any real equity there. He owes, perhaps, $3.5 billion now, and, if you had to pick a figure as to the value of the assets, it might be more like $2.5 billion. He’s a billion in the hole, which is a lot better than being $100 in the hole because if you’re $100 in the hole, they come and take the TV set. If you’re a billion in the hole, they say “hang in there Donald.”

Let skepticism reign. Perhaps the lesson is this:

People engaged in an activity and doing great work that they enjoy don't solicit others' attention - their activity is their own reward, and if we are interested, it is incumbent upon us to find them. We should be wary of people seeking our attention to tell us the great stuff they've done. If the attention is a  meaningful reward, this may imply that at least, the achievement was not satisfying on its own, and at worst, the "achievement" was mediocre or fraudulent.

What that says about this blog is, of course, up for interpretation. - Ed

1982 Wealth: Share of Fred's estimated $200 million fortune. Forbes explains: "Consummate self-promoter. Building Trump Tower next to Tiffany's. Angling for Atlantic City casino." Forbes quotes Donald: " 'Man is the most vicious of animals and life is a series of battles ending in victory or defeat.' " While Forbes estimates that the family's fortune was over $200 million, it says that "Donald claims $500 million."

Daily Dose of Buffett - Donald Trump and Business Talent

It's tough coming up with well-edited brilliant, original content every day, but I'm working on it.

On days like today, where I'm more pressed for time than usual, I offer someone else's genius - with my edits. I have read and marked up a 40 page lecture by Warren Buffett, and have choice excerpts for you to digest, one piece at a time.

Today, we have Warren on the Donald, and thoughts on what business talent really is. Enjoy. - Ed

Where did Donald Trump go wrong? The big problem with Donald Trump was he never went right. He basically overpaid for properties, but he got people to lend him the money. He was terrific at borrowing money. If you look at his assets, and what he paid for them, and what he borrowed to get them, there was never any real equity there. He owes, perhaps, $3.5 billion now, and, if you had to pick a figure as to the value of the assets, it might be more like $2.5 billion. He’s a billion in the hole, which is a lot better than being $100 in the hole because if you’re $100 in the hole, they come and take the TV set. If you’re a billion in the hole, they say “hang in there Donald.”

It’s interesting why smart people go astray. That’s one of the most interesting things in business. I’ve seen all sorts of people with terrific IQs that end up flopping in Wall Street or business because they beat themselves. They have 500 horsepower engines, and get 50 horsepower out of them. Or, worse than that, they have their foot on the brake and the accelerator at the same time. They really manage to screw themselves up.  ...

Donald Trump wanted to get rich. That might not be a great qualifier. What would you do to select that one person out of this whole crowd here, because there will be a huge difference in results here. There’s not a huge difference in IQ. But there will be a huge difference in results. [To understand success, y]ou would probably relate it to a lot of qualities, some of which would be straight from Ben Franklin – I would suggest that the big successes I’ve met had a fair amount of Ben Franklin in them. And Donald Trump did not.

One of the things you will find, which is interesting and people don’t think of it enough, with most businesses and with most individuals, life tends to snap you at your weakest link. So it isn’t the strongest link you’re looking for among the individuals in the room. It isn’t even the average strength of the chain. It’s the weakest link that causes the problem.

It may be alcohol, it may be gambling, it may be a lot of things, it may be nothing, which is terrific. But it is a real weakest link problem.

When I look at our managers, I’m not trying to look at the guy who wakes up at night and says “E = MC 2” or something. I am looking for people that function very, very well. And that means not having any weak links. The two biggest weak links in my experience: I’ve seen more people fail because of liquor and leverage – leverage being borrowed money. Donald Trump failed because of leverage. He simply got infatuated with how much money he could borrow, and he did not give enough thought to how much money he could pay back.

You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing. I’ve never borrowed a significant amount of money in my life. Never. Never will. I’ve got no interest in it. The other reason is I never thought I would be way happier when I had 2X instead of X. You ought to have a good time all the time as you go along. If you say “I’m taking this job – I don’t really like this job but in three years it will lead to this,” forget it. Find one you like right now.

Source: Three Lectures by Warren Buffett to Notre Dame Faculty, MBA Students and Undergraduate Students. Spring, 1991 (Lightly edited by Whitney Tilson) Link