What We Can Learn from Stock Market Investments of President Donald Trump?

We all love to look at other people pockets. And whose pockets might be very interesting? Of course, the president of the United States - Donald J. Trump.

We are going to look at his stock market portfolio based on the Federal Election Commission filings. We will look at the performance of his stocks in comparison with the broader stock market.
I do not think that Donald Trump needs an introduction. He is the president of the United States. Before entering politics, he was a businessman and television personality.
The net worth of Donald J. Trump was a popular story during the last presidential election. Trump has said on multiple occasions that his net worth is exceeding $10 billion. According to estimates of companies like Forbes or Bloomberg, his net worth is around $3.5 billion. That makes him one of the wealthiest politicians in American history and the first billionaire American president.

His assets include skyscrapers in New York City: 40 Wall Street and the Trump Tower. He also owns golf course resorts in Florida, New York, New Jersey and Scotland.
He was chairman and president of The Trump Organization, which he inherited from his father, Fred Trump. He turned over operations of his business empire to his two adult sons after he moved into the Oval Office in January 2017.

The vast majority of Trump’s wealth is in real estates. But according to what he disclosed in a Finance Election Committee filing in May 2016 he had some money in the stock portfolio too.

Here you can see the 14 most significant stock market positions of Donald Trump on the 31st May 2016 as by the Federal Election Commission filings. The commission allows candidates to give broad estimates of asset worth. To visualise the companies in the pie chart, I just took the average value from the ranges given. It is a simplification, but it will allow for an easier understanding of the biggest positions in this portfolio. I showed sectors in respective colours. The biggest exposure at that time in Donald Trump's portfolio was to technology companies. It is displayed in dark blue: Apple, Microsoft and Alphabet.

Next significant exposure is to the Consumer sector. Pepsi Corporation and Nike represent this sector. Then we have financial companies in green. Red colour indicates healthcare companies.

From 31st May 2016 till 6th December 2019, which is slightly more than three and a half years, the S&P500 index went up 50.02%. But 14 the most significant positions from Donald Trump's portfolio went up by 101.60%. It looks like Donald Trump is a good stock picker.

Here is how Donald Trumps's biggest stock holdings performed. The numbers below include dividends paid. The best positions almost tripled the value during that time. Apple, which was the biggest position, increased by 181% or more than 51% annually. That is incredible growth. In my portfolio, Apple is still my third biggest stock market position.

The 2nd biggest position was Microsoft. The company did even better than Apple as it grew by 198%. These two positions show that we should not rely too much on diversification. Just choose the best companies and let them increase your wealth. There was one more Technology company within 14 biggest positions - Alphabet. The company grew by 79% during this period. And that is the company I also have in my stock market portfolio; it is my 2nd biggest stock market position.

We cannot verify it. But we have just confirmed that if President Donald Trump did not sell his stock market positions, he could double the value of his stocks.

The best performers were big names: Apple, Microsoft or Visa. These are companies with a moat which means that people will use products of these companies whatever happens.
As Donald Trump said: "The more predictable the business, the more valuable it is." We did not see speculative companies in his stock market portfolio.
The lesson from his portfolio is to choose predictable businesses but also do not try to time the market. If you bought shares of a great company, hold it and let it make you rich.



Music: Leonell Cassio


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Please note I am not a regulated financial advisor, and so any help will be non-advisory. If you are unsure of the suitability of any investment, you should seek professional financial advice.