It was a investment which i was also part of. It was during the ICO bubble in 2017. After the investment, the price initialy made 3x rise since its launch but then the project reported it was being “hacked” and all the tokens were stolen. The price dropped to 10% value of its original worth and people lost trust in, as the exchanges delisted the token, as they were labeled as stolen. IRS later found out it was a scam project. This project was under name Titanium BAR token (BAR).
The Polish Presidential Elections in May 2020.
The elections have been planned to happen on 10th May 2020, during the COVID-19 lockdown. Despite the strongly argumented calls (coming from i.a. candidates themselves, Supreme Court or Constitutional Law Professors) for postponing the elections the preparations were pushed through and ballot papers were printed. The elections did not take place due to problems originating from last minute changes in the laws aimed at making them happen. The ballots have not been reused.
Fun fact: if Jesus did not die and have worked all this time until today for a current minimal polish salary (~760$) he would have earned roughly the same amount of money as was spent on printing the unused ballots.
The US government is continuing to buy stocks and bonds of failing companies that would go out of business otherwise. Keeping these companies alfloat might save jobs in the short term, but the policy is bad over the long run and eventually those companies will collapse anyway.
This article was released just this morning and i think it is a perfect example of the milinvestments and missallocation of capital over 2 trillion dollars worth of laundered funds misused. https://www.bloomberg.com/news/articles/2020-09-20/banks-moved-2-trillion-defying-money-laundering-orders-icij?utm_source=url_link
One example highlighted in the report: JPMorgan moved more than $1 billion for the fugitive financier behind Malaysia’s 1MDB scandal, based on records. The bank also processed payments for Paul Manafort, the former campaign manager for President Donald Trump, after he resigned from the campaign amid money laundering and corruption allegations from his work with a pro-Russian political party in Ukraine, according to the investigation.
The rescue to BES Bank in Portugal, witch is more than 7.000.000.000€ from the citizens from a so called resolution fund. They are selling actives with 95% of discount to big funds, but if you want to buy that same active it is not available. Fantastic investment for someone, not to everyone.
Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).
-The agency I chose to research is Sallie Mae, the US agency that specializes in student loans. I believe this meets the definition of a malinvestment and I argue that it is a misallocation of capital for the following reasons: 1.) it does not fulfill the intended purpose of providing cheap and affordable higher education; 2.) it creates a burdensome and in some cases almost a life-long servitude of the borrower to the lender; 3.) it represents a clear misuse of capital that could otherwise be employed in a more constructive and equitable means to achieve the stated purpose.
The worst investment is having argentinian pesos, look at this ( http://estudiodelamo.com/cotizacion-historica-dolar-peso-argentina/ ) 490% inflation rate in 10 years
Haha, what a time to be taking these courses. As if the Federal Gov printing trillions of dollars for stimulus to cushion the economy is not bad enough, only a tiny percentage of the stimulus reaches the poor and unemployed. Huge portions of the stimulus landed in the hands of other gov agencies and big companies regardless if they are making profits or loss. If this is not unethical or corruption I don’t know what is 
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Savings accounts, Uber and basically anything that involves the government.
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For me the investment that best meets the definition of malinvestment in recent history is the company Theranos. Unproven tech that seemed to disrupt a portion of the medical field was calling to VC’s like sirens calling to Odysseus’ men. Not only did money pour into the company from the start, but it was able to secure a $100 million dollar loan based on patents after sanctions and legal issues.
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U.S. Banks offering APY return on CDs or Roth IRA are traditionally the best investments if you ask any Financial “expert” or advisor. As they will mention them as safe haven investments that are locked in for a certain period of usually 2-20 years depending on how high of an APY you are looking for. But they are usually no higher than 1.5% (for under 5 year without access to money) and are putting a large amount. But the other side to this is we are on average 2% inflation per year. Which in actuality, you are gaining a -0.5% interest per year. So you are really not gaining any any value, you are losing your money every year you keep it there, when you are led to believe you are building passive income.(even though it is not much at all to begin with)
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Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).
A: The first example that popped into my mind is the famous “Bridge to Nowhere” in Alaska. The “Bridge to Nowhere” (officially called the “Gravina Island Bridge”), was a proposed bridge to replace the ferry that currently connects the town of Ketchikan, Alaska with Gravina Island, an island that contains the Ketchikan International Airport as well as 50 residents. The bridge was projected to cost $398 million (and be as big as the Golden Gate bridge in S.F.). Members of the Alaskan congressional delegation were the bridge’s biggest advocates in Congress, and helped push for federal funding. The project encountered fierce opposition outside Alaska as a symbol of pork barrel spending and is labeled as one of the more prominent “bridges to nowhere”. As a result, Congress removed the federal earmark for the bridge in 2005.
So, although the bridge was never built, it is in my opinion a good example of malinvestment that almost happened. Surely there were better ways that almost $400 million could have been spent. I’m not saying that bridges are bad investments (some heavily used toll bridges probably do provide a good ROI); it’s just that the bridge would probably not have been used enough to justify the high construction expense (hence why it was so highly controversial).
[https://www.wsj.com/articles/how-a-20-mile-train-line-swelled-into-a-9-billion-debacle-11553270393]
A rail system in Hawaii began construction over 10 years ago, most of the population had voted against it but gov officials still went along with it. It forced businesses to shut down and evict. The project has turned over a number of times. Deadlines kept getting pushed back. Our state taxes went up to fund this project. Today, the rail project is not completed. Wasted money into this project/investment.
Lidl Stiftung & Co.
Organization: Lidl Stiftung & Co. KG – Germany
Project name : eLWIS (apparently pronounced “Elvis” in German)
Project type : Merchandise management system – Grocery stores
Date : Aug 2018
Cost : €500m
They have invested in an Software, without looking what the App purchase was, so they had to do a lot of changes to match their wants.
In my opinion, most of government spending meets the definition of a malinvestment. My favour example would be coal mines in Poland, especially those owned by state. They are heavily subsidised and inefficient due to lack of investments and shrinking, very deep deposits. They are ill-managed because leadership is comprised of former politicians, or their family members without proper experience in business. Workers have a lot of costly privileges even though mines make losses. Any attempts of reforming this industry ends up in big, violent protests. Cherry on top of this is EU regulation about lowering a coal stake in energy mix, and huge fees for CO2 emission.
the airline industry meets the definition of malinvestment to be more specific United Airlines. The profits they generate have not been used to improve infrastructure and make the company more efficient. Something else that has been apparent due to the virus they had no savings for a rainy day, because they are a bad allocater of capital. Instead they used profits to buy back their stock pushing stock price up and giving the top execs enormous bonuses. They are a prime example of malinvestment.
Almost all of the DOT com startups, with a few notable exceptions like amazon and Google that benefited greatly from the cheap money and had the innovation and vision to build large powerful companies. Many of the Dot com startups failed after the bubble burst and many investors lost much of their investment. The DOT com bubble was very speculative with many investors ignorant of the technology and greedy because everything was going up.
One thing that comes to mind is my local shopping mall. Business is drying up within it, like many malls, and one idea to bring new income was to put in a movie theater. This idea was brought up a few years ago but luckily never implemented. The pandemic would have caused an even greater blow. Of course, this is all in hindsight. Without the pandemic and faster negotiations it’s possible this could have increased revenue.
It’s a toough choice to try and make just one example. The process of government bailouts to companies that are deemed too big, to fail is a malinvestment. If a company is failing due to bad business practices, then a bailout is just simply rewarding them for doing bad.
Theranos
CEO Elizabeth Holmes had lied to investors, patients, and the press for years.
The company falsified test results, misled partners about the capabilities of Theranos technologies, released incomplete devices that did not work as promised, and repeatedly denied accusations of wrongdoing in media appearances.
And Bitconnect.
Mathematically impossible.