Donald Trump is All Sizzle, No Steak

Do you think Donald Trump is a great businessman? Dig into the numbers, and you’ll be quite surprised.

According to the July 6th edition of The New York Times Business Day , a $10,000 investment in Donald Trump’s 1994 IPO is worth approximately $636 today. (Hat tip to Tom Peters for the link.)

In 1994, “The Donald" had $900 million in personal debt and business debt of $3.5 billion. As a result, Trump skirted the edge of personal bankruptcy several times, and his hotels and casinos holding company emerged from bankruptcy and re-structuring in 2005.

It seems that, in a very real sense, Trump’s “business" is more of a cult of personality than a profit-generating company. Trump has mastered the art of image, but there’s not much backing his bluster.

By way of contrast, a $10,000 investment in Sysco (a relatively boring food service company) in 1994 would net you $60,877 today. That’s enough to keep you supplied with steak for a long time.

It distresses me that so many people still view Donald Trump as a business role model. In light of the above, you’d do much better emulating Charlie Munger or Howard Schultz.

The moral of the story: great PR and a great business are two different things. Sometimes the “boring" companies perform the best.

(Ironically, Trump is currently trying to increase his profitability by selling steaks.)

Read more essays by Josh Kaufman →

Published: July 9, 2007Last updated: July 9, 2007

Books by Josh Kaufman