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Trump’s actions have never been crazy; his words, often

Posted by John Reed on

The fear about Trump is that he would do crazy things as president because he says crazy things. I suggest that readers look at the actions Donald has taken during the 52 years since he graduated from high school, not his words, and ask if any are crazy.

They were not.

In college from 1964 to 1968—the same years I was in college—a lot of kids, maybe most, did drugs, got drunk, adopted radical positions like burning their draft cards and going to Canada or blowing up police stations.

Many others dropped out of college, like Scott Walker and Rush Limbaugh or Bill Gates. Trump earned his degree—from an Ivy League college (Penn).

As far as I know, Trump did none of the above. He is a lifelong teetotaler. He avoided the draft by way of claiming to be 4-F. Avoiding the draft was shameful, but probably the rule among those born in 1946. (As a West Point cadet, I was an active-duty U.S. Army soldier in college.) He would appear to have been one of the LEAST crazy members of the first year of Baby Boomers as of graduation day in 1968.

As an adult, Trump has been a bold, risk-taking businessman. He took too much risk at times. For example, he accepted personal responsibility on huge mortgage loans. At the low point, he had a negative $900 million net worth.

Was that crazy? No. It was naive. I made the same mistake myself. I once wrote an article for my newsletter Real Estate Investor’s Monthly in which I said agreeing to personal responsibility should be considered an offensive weapon in the wars to build net worth in real estate.…/john-t-reed-s-real-estate-invest…

I never had any negative net worth, but I learned there are serious hazards out there for real estate investors: litigation risk, economic downturn risk like the various recessions and the 2008 downturn, inflation like we had around 1980, political risk like the Tax Reform Act of 1986 which chopped 25% off the value of every income property in America, etc. Donald and I each failed to fully understand how risky business and real estate were early in our careers. But we were naive, not crazy.

Now, I would say that you should be extremely reluctant to accept personal liability on a mortgage. I have even recommended that investors move to states where personal liability is more easily avoided—like CA and AZ with regard to your home mortgage. Or that you use a HECM if eligible because it is also a non-recourse mortgage. Non-recourse means no personal liability.

Trump has switched to a large extent to licensing his name rather than owning the buildings. Very smart and extremely low risk. So The Donald and I were both naive. We both grew out of it.

Was Trump crazy in his non-real estate businesses? No. He was a bold trier of new things—pro football, airline, casino gambling, golf courses, investment in foreign countries, Miss Universe, The Apprentice, hotels, the Wollman Rink, a Broadway musical, fashion lines, steaks, wine, Trump University, and others too numerous to list.

Was any of this crazy? No. Long shots? Yes.

Did they fail or succeed? Both. But on a net basis, his net worth is about $5 billion (According to Forbes magazine; Trump claims twice that). That means on average, his various business ventures have been spectacularly successful. When you start with a minus $900 million net worth—relatively late in his career, and move to $5 billion positive net worth—you had to have made $6 billion to do that. That is one hell of a lot of money in a relatively short period of time.

A reader described Trump as top 1%. Not even close. In a good year, my wife and I are top 1%. Trump is in the 324÷7 billion of the world. Forbes says he is the 324th richest person in the world. Seven billion is the world population. That is the top 4.62857143e-8 a.k.a. .0000000462857143 or in %: the top .0000046%.

The guy is way, way better than almost everyone in America at something most Americans tried to be good at: building a high net worth and a strong business. Efforts like buying lottery tickets, going to college and grad school, buying stocks, investing in real estate, starting a business are all evidence of trying to move in the same direction Donald tried to move.

Don’t even think about dropping any sour grapes on me—that you could have had a $5 billion net worth if you had wanted one but you didn’t want one.

You hear that a lot about pro sports. Joe Schmoe says he could have played major League Baseball if only his high school coach had not disliked him.

I played semi-pro baseball. Some of my teammates and opponents were former pros. Those guys are super human.

Ditto in pro football. If you think you could have been one, I suggest you attend the American Football Coaches Association convention and just stand or sit next to those FORMER NFL players. That will quickly disabuse you of the notion that you could have been on a field blocking or tackling such men.

Or go try to build a FIVE-story building in NYC. After a year of that futility you will have enormous respect for what Trump has done.

Is Trump crazy as a businessman? Hell, no. He is world class. YOU’RE crazy if you dismiss his business accomplishments.

Was he crazy as a family man—a husband and father? No. That would be Bill Clinton you’re thinking of. Donald cheated on his first wife. He feels bad about it. It was wrong. It was improper. But it was not World War III crazy.

When all was said and done, he raised a great bunch of kids, has been with his current wife for 17 years, and has the enthusiastic endorsement of his two ex-wives for president. I believe he would be the second president who was divorced. The first was Reagan.

The people who know him well over the years never describe him as crazy. That only comes from political opponents.

Does he talk crazy? Often.

Is that disquieting? Yep. But actions speak louder than words. Judging by actions, over 52 years, Donald Trump is not crazy. Furthermore, he is one of the most vetted presidential candidates in history having lived his entire adult life under the Manhattan media microscope, actually seeking the scrutiny of that microscope.

I can’t vote for him because I live in CA where all electoral votes are automatically allocated to whomever the Democrats nominate. I will probably vote for Libertarian Gary Johnson to make a little statement down in the corner of the news stories about the election.

For you non-Californians, consider taking the chance articulated by one of the Koch brothers who said you have to believe they are not going to do what they say they are going to do. If you believe Trump is going to really slap a 45% tariff on China and a 35% tariff on Mexico, support Hillary. Those tariffs would cause a second Great Depression. If you think that is a bluffing opening offer, take a chance on one of the most competent doers on earth.

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