On Sunday, the New York Times published extensive reporting based on a trove of Donald Trump’s tax records. They show aggressive tax avoidance, with Trump’s claimed losses on failed ventures almost entirely wiping out his income tax liabilities for more than a decade.
They also reveal what turned out to be an extremely costly investment strategy. According to the tax documents seen by the Times, Trump sold a huge amount of stock between 2014 and 2016: $98 million worth in 2014, $54 million in 2015, and $68.2 million in 2016. According to public financial disclosures, Trump now owns as little as $873,000 in securities.
In other words, Trump effectively took his chips off the table starting in 2014, and never bought back in. Based on other elements of the Times’ analysis, it seems probable Trump made these sales because he needed cash, in part to finance the huge debt that still hangs over his head, which the Times calculates at $421 million.
The bad news is that with these sales, Trump missed out on a historic bull market: From the end of December 2014 to the end of December 2019, the S&P 500 index gained over 56%. So every time Trump over the past three years took credit for the rising stock market as evidence of his great performance as President, it must have been somewhat bittersweet: He was barely personally benefiting from the run-up at all.
Based on what we know, Fortune estimates Trump would be $114 million richer today if he hadn’t sold his equities—a sum that would certainly be useful in paying off his debts.
That estimate is based on a number of assumptions and proxies. We don’t know what stocks Trump sold or held. We don’t know when precisely he sold any particular part of his portfolio. And we can’t guess exactly when or if he would have eventually sold his assets if he hadn’t cashed out in 2014–2016.
But it’s a safe bet that holdings of that size would be diversified with a wide variety of high-quality equities. And active managers over the past decade haven’t done any better than the overall market. So we take the S&P 500 as a rough proxy for the performance of Trump’s former portfolio.
Meanwhile, we’ll assume the end of each year as the benchmark date for his big stock sales, and the end of 2019 as the benchmark date for Trump’s potential gains. The market has now roughly returned to its December 2019 levels, and Trump understood the serious dangers of the coronavirus well before he discussed them publicly. So a December 2019 benchmark equally represents him unloading his equities before the market crash in March (as some legislators were accused of) or holding on for a recovery.
Using those assumptions, the $98 million in equities Trump sold in 2014 would have been worth $152.9 million by December 2019.
The $54 million worth of stock Trump sold in 2015 would have been worth $85.3 million by December 2019. (He actually would have been better off selling these assets in 2014: 2015 was a rough year for equities).
The $68.2 million in holdings Trump sold in 2016 would have been worth $96.2 million by December 2019.
All told, then, selling into a bull market cost Donald Trump $54.9 million on the 2014 tranche, $31.3 million on the 2015 tranche, and $28 million on the 2016 tranche, for a grand total of $114.2 million in missed gains.
There is one final unknown here, of course, which is Trump’s cost basis for his sales. That is, we don’t know when he bought the stocks that he sold in 2014–2016, or how much he paid. He may have realized huge gains with the 2014–2016 sales if, for instance, he loaded up on stocks just after the Great Recession. From 2009 to 2014, the S&P gained a staggering 84.6%. Gains on stock bought in 2007 and sold starting in 2014 would have been on the order of 46%.
So while his premature sales add to a larger pattern of financial ineptitude, Trump likely still benefited bigly from the stock market.
