To relate to current events the investment in stocks seems like a malinvestment due to the rigging of the system from hedge funds and trading platforms to benefit them will risking the average retail investor. This was shown with the run up of GME stocks and the shutdown of buying it on platforms like Robinhood. This shed light on the reality of centralized finance and the risks it brings people who aren’t in Wall Street.
The Canadian government’s decision to purchase the trans mountain pipeline and prop up Alberta’s, and the nations, failing fuel economy. That deal is now dead as President Biden has rightfully withdrawn the permits to continue in the US. The estimated $15 plus billion tax payers are on the hook for would have been better spent reeducating and retooling for a green energy economy. Rant 2.
a good investment is called in the case when every day you can buy more and more goods and services.
if the amount of money grows but you can buy less with it, then in the approach to investing something urgently needs to be changed!
the true purpose of accumulating wealth is the ability sooner or later to exchange it for goods and services! 
I think wall between US and Mexico was malinvestment.
Because it doesn`t satisfice the main purpose and provide real protection from illegal immigration.
There was some benefits to the construction companies who build a wall and workers who worked over there. Also Companies who build those metal frames and their workers plus who mined those metals ect.
Dogecoin has a $4 bn market cap (31/01/2021)
. It’s a meme coin 
I think the bailout of airlines during the COVID pandemic was an example of malinvestment. I think it would have been more financially sound to extend the loans of these companies instead of providing direct grants. These grants do nothing for the contractors and other players in the airline industry that are affected by reduced flight traffic. Also, they would not be possible without the distortions of interest rates by the Federal Reserve.
I remember a brief, personal experience of malinvestment in the mid-2000s, prior to the 2008 bubbles burst of the US real estate market. In a brief stint at a mortgage lending business, I remember bearing witness to a myriad of exotic mortgage loan-schemes that seemed way too good to be true. I remember reading about predatory lending in certain loan models such as some 5-1 arm loans banks would offer with very little info required for underwriting presented to unsavvy and vulnerable customers. Little did they know, many of them would fall prey to the heavily ballooning interest rates after just 5 years, sometimes less. Perhaps lenders would argue the info was clear for customers to see and to beware of certain risks, but many reps didn’t go out of their way to look out for the best interests of the buyers.
MALINVESTMENT:
“Malinvestment is always the result of the inability of human beings to foresee future market conditions correctly.”
“These distortions in turn are most often caused by government intervention or It should be noted that it is often only in retrospect that malinvestments can be identified, as price distortions and financial bubbles can confuse investors and market participants for extended periods of time.”
In a sense the currently popular GameStop Tale - is representation of Malinvestment
- Redditors drove the price fluctuations.
- Causing top tiered investors to end at a severe loss and being caught game trading through “naked shorting”.
- Top tiered investors - justified by claiming they had lower risk compared to an average investor (retail investors) yet contradicting in the definitions of a free market.
- Resulting Brokerage stock companies to form market manipulation due to the unforeseeable increase fluctuation.
Government bonds in denmark yields 0 procent, inflation on appartements in the main capital 10%–> this year.
The Alberta oil projects were a malinvestment leading to many suicides–not knowing how much oil the saudis have it was a risky bet in dollars and a sure loss for the environment.
In the 90s, the Federal National Mortgage Association allowed many lenders to give money to people buying real estate with very low interest rates knowing that they couldn’t afford the property. It was a way to send bonuses to the lenders whom were giving loans to the people that couldn’t afford the loan. It created a bubble in the real estate market that crashed eventually in 2007-2008 when people figured out what was really going on with the inflated real estate market. Many people lost money in their house value as well as any related stocks when this crash occurred, but the lenders made out with more money than ever from their bonuses.
I hope that time counts as an investment good for this example from my bubble.
I recently did some research on how to earn money from composing and producing music these days. The results were shocking. In comparison to the golden times in music, when bands went on tour to sell albums, artists and bands are now hoping to get a lot of streams on the big platforms to sell more tickets for their concerts. The average salary per stream right now is around 0,004€ . So with one million streams, which is very hard to reach for small bands they can earn 4000 euros. Considering, that it can take month to get a song ready to be released and most of them will never see a million streams, that is not nearly enough. So artists and bands are no longer able to earn passive income and instead have to go touring and exchange worktime for money, which, i think, is a bad investment.
In September, 1999, after a seven-year climb to nearly 6500 points, the Greek stock market suddenly experienced a sudden decline that ended only four years later.
The government had consistently and openly urged Greeks to invest, even going as far as to predict that the market would to soar. There was also manipulation of shares either by misinformation from the press, or by fake transactions aimed at raising prices and demand. The financial newspapers were playing the game of entrepreneurs because it was the first time they saw their sales so high. Several publishing and television companies entered the stock market raising significant funds from the capital increases.
Everyone had become “experts” in shares: farmers, taxi drivers, military, retirees, private employees, etc. In fact, what was happening was a phenomenon of mass greed that, dynamically operating, made all the shares rise due to the huge demand with unimaginable returns: the share of the company ‘Athenian Holdings’ in January 1997 was at 61 drachmas (0.17 Euro). On September 17, 1999 it was at 18,993 drachmas (55.73 euros), recording a record yield of 30,866%!
Within three years, by September 2002, the Greek stock market’s capitalization had lost 136 billion euros in value. Countless families were entirely destroyed financially.
That’s obviously not 3 to 5 sentences… 
Sorry!!!
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Lukin Coffee-Chinese company listed on NYSE, Starbuck s direct competitor in China has dropped from 50Dollars a share to a low of 1.39 dollars/share following confirmed allegations of executives being fraudulent on top of Corona virus pandemic. Literally half of the revenue guidance for the fourth quarter of 2019 proved to be fictitious. Now the company went throw some restructuring and has recovered to around 11 dollars. Although I was bullish on this, even with the scandal the company has been delisted from NYSE and thus all my shares sold automatically at around 2 dollars/share. Now the stock is at 11 dollars and would have been able to break even if there wasn t for NYSE delisting it.
If I would have put all those money into Crypto in May 2020 when this happened I would have been a happy man, to say the list.
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).
Medical Transcription by people has turned out to be a malivestment. I personally invested time and money into night school, equipment, and on the job training to learn to become a medical transcriptionist. While I was happy to work in this field for several years, voice recognition technology has taken it over. Great wake up call for me, helped me realize that industries change in what seems as a blink of an eye and if you’re not willing to change/learn, move aside for the next guy.
Most recent ICO investments in crypto world, that had no real projects, sometimes no real teams etc. They would easily raise money as investors would expect to get lots of ‘‘free’’ coins that they would think shortly after it would be worth a lot more to their investment.
I think a good example would be the recent AMC cinema stock investment.
People with capital to invest, some of it might’ve been from government stimulus checks or other welfare checks put money into not necessarily fundamentaly sound investment. An investment based on emotions and social sentiment.
The recent rise of reddit trading has been a malinvestment, or quite possibly a scam. A lot of the reddit traders are pumping and dumping stocks that seemed almost irrelevant or dying.Then carrying over to crypto, just yesterday we saw extreme volatility involving xrp. A lot of the people getting fleeced are young adults and people who think buying stocks are get rich quick schemes. Then they get fleeced in crypto because it is currency and entirely different from the stock market.
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I can think of many bad investments, but the definition of “malinvestment” given in the lecture says that it is an investment that is made because of a distortion in interest rates. It is harder to think of something that would not have occurred had we had a market-interest rate.
I suppose the current rise in housing prices would probably fit the definition of malinvestment which is provided. Because low interest rates make mortgages more affordable, the price people are willing to pay on a house increases with low interest rates. Therefore, it seems likely that without artificially low interest rates, mortgages would have higher interest rates, and the price of housing would probably be less.
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Our country invested a couple euro millions in old Russian military trucks known as PATRIA scandal. They were overly bought and in bad condition. We are not planing to go to war so this trucks are useful and therefore a mall investment.
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