an automobile, it slowly loses its value over time, it costs more to repair than the worth at times and won’t every really go up in price it will only depreciate
The Dept of Homeland Security’s dispersion formula used in the division of domestic security funds is a total misallocation of funds. The formula guarantees each state .75% of the total budget and the rest is determined by state population. It results in Alaska, Vermont, Wyoming, North and South Dakota, having the highest per capita spending allocation for domestic security. The net result is we are not safer overall as a nation as we could be were the money better allocated.
Great example and you have definitely shown that you are paying attention to all this macro crap going on!
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California’s High Speed Rail project has been a malinvestment on many fronts. The project was initially passed even though the expected cost would be significantly higher than similar high speed lines around the world, with a longer build cycle and to ultimately be slower than all other ‘bullet’ trains. A malinvestment from the beginning, it has only gotten worse through delays, increase in costs, legal troubles from land acquisition and a loss in funding.
Similar to other answers, the inability to look towards technological innovation has plagued this transportation infrastructure initiative.
XRP! Without a doubt! As long as they bring tons of new token in circulation, the value will decrease. XRP only pumps when the rest of the market pumps and people fomo in.
THE SAD FATE OF WORLDS TALLEST BUILDING Building a house is stressful. Building a skyscraper is a nuclear bomb of stress, problems, and carefully-coordinated chaos—chaos that is closely tied to the economy, and that is easily derailed by war, politics, and financial downturns.
It’s not an uncommon story. There are plenty of super-tall (over 984 feet) buildings that were proposed but never made it through to reality. Humans have a tendency towards bombast when it comes to skyscrapers. But recently, the Council on Tall Buildings and Urban Habitat looked at a unique subset of these failed projects that are especially interesting: Super-tall buildings that actually did begin construction, but were never completed.
eg The Russian Tower another victim of the 2008 crisis: The 2,008-foot Russia Tower was already under construction when the downturn hit the following year, and the building’s developer announced he’d be unable to put up the $3 billion needed for the building work. The construction site was turned into parking.
With this building work started on site but was never completed it fell victim to a combination of common causes, financial obstacles political pressure and cultural shifts but summed up best as cancelled due to the financial crisis 2007-2008 The original idea for the building was proposed in 1994. Since then, the tower’s planned location has changed five times. One of the proposed concepts by Norman Foster, was meant to reach a height of 1 km (0.62 mi); however, that concept was cancelled by the Mayor of Moscow, Yury Luzhkov. The tower’s development company froze the project and halted construction in November 2008, suspended it in February 2009, and in June 2009, the project was officially cancelled. The financial crisis of 2007–2008 led to problems in financing the project.[
Key Note: However, many business news analysts decried the move, arguing that such use of the oil company’s business capital to assist Chigirinsky by purchasing his economically distressed real estate assets—which had no relation to the company’s core oil business—at possibly inflated prices was detrimental to the company’s shareholders and constituted a significant conflict of interest.[[7]](https://en.wikipedia.org/wiki/Russia_Tower#cite
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Any investment in zombie comanies like Hertz.
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Tocardo Tidal Power.
They invested a lot of time and money into their energy project which included turbines placed in the ocean. For a realistic second phase of their project they would need to have been subsidized by a grant given from a Dutch government agency. They never got the grant, and to my idea, were to “excited” with their plans before they made sure that they had all the needed funds.
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2016-2017 ICOs, fancy web pages without working products taking in millions.
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I can’t take credit for this explanation but it verbalizes how I feel and it was the best example I could think of to answer the question. This statement was published in an article by the Business Insider on September 12, 2012.
“1. Stimulative monetary policy creates falsely optimistic market signals.
2. Private investment firms act aggressively on these false signals.
3. As a result, the private sector “malinvests,” i.e. allocates badly.
4. Capacity is increased prematurely, supply ramped up excessively, etc.
5. When the stimulus wears off, the economy is in worse shape that before.
6. Overhang of excess debt, capacity, supply etc. serves as a dead weight.
7. Struggling to ignite growth, the authorities order more stimulus.
8. A speculative bubble ignites instead, furthering the malinvestment
9. Yet more excess capacity, debt, supply etc. is accumulated.
10. The additional stimulus wears off…
11. Repeat the process until you get full-on economic collapse.”
So in this case the stimulus itself is in fact the malinvestment. Here in the U.S. it is propagated by the U.S. Federal Reserve.
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If I understand that correctly, malinvestment could be when coronavirus happened and US started printing money and investing it. Which stimulated economy and recovered it, because usually without stimulus it could fall. Hence enhancing the stock buble which can cause many problems in the future, including inflation.
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10 years ago, investing in big retail stores stocks like blockbusters toyland, etc… internet forced migration to digital stores and delivery.
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Any buying of Anglo Irish Bank shares pre-2008 financial crisis is a perfect example of a Malinvestment and a misallocation of capital.With many “dodgy dealings” taking place.
One of which being the chairman Sean Fitzpatrick hiding 87m worth of loans from the bank.
The full details of the scandal never really came to light, but it did cause the resignation of over 10 bankers resignation including several chief exec’s and the Irish Central Bank Financial regulator. Much to the dismay of the Irish people the bank had to be Nationalized at the tax payers expense.
This was a clear malinvestment because the said entity was not operating under the correct legal pretenses and it was a clear misallocation of capital for anyone who invested into Anglo Irish shares because they would have lot of money!!
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Hertz is an absolute malinvestment in my view. Although it filed for bankruptcy in May, it received strong pumps afterwards(673.2% gain in just 3 days in June,193% in October within 2 days).they were able to receive investments in total of 1,65 billion dollars(I hope German milliarden is billion in US measurement).these swings turned this once respectable company into a casino place which turns investing into gambling.
A similar pattern showed up on Wirecard stock:even though the company is fraudulent and completely out of money, there were “investors”looking to make a quick buck.
If I am understanding this correctly, Technology is deflationary so as long as there is still trust in the currency printing money can work without hyperinflation.
The ICO boom of the last cycle could be considered a malinvestment. Many of the ICO’s got the capital from the initial campaign and then did not do what they said they would do with the money.
In New Zealand a great example were the finance company collapses 2006 - 2012. Over NZ$3 billion owed to up to 200,000 Kiwis from 67 financial services companies collapsing. Many people lost their life savings. This stemmed from a lack of regulatory oversight which in turn let these companies get up to all sorts of bad behavior. This eventually led to a whole bunch of reforms in the sector.
See https://en.wikipedia.org/wiki/Finance_company_collapses,2006%E2%80%932012(New_Zealand) for more info on this subject.
I chose timeshares as my malinvestment of choice. Timeshares promise way more than they actually deliver. Not only do you have to play a high-interest loan (if you took out a loan), but you don’t have complete ownership of the property, you are only allowed to stay a week, and the maintenance isn’t worth it.
I think giving money to a financial advisor such as wellsfargo would be considered a malinvestment. Depending on how much risk you are willing to take, they will use your money to buy stocks that they believe will make money in the time period you choose to invest. The amount of tax that is paid on these investments on top of the little rewards received from the interest values makes it a malinvestment. You would be better off buying straight into the s&p500 because you would save on fees. The stock market will always be volatile.
an example of malininvestment is ,put youre money on a bank account and pay negative interest rates