That also could be currency loundering 
1 Like
In Latvia we have national airline called airBaltic, which was struggling for a many years already and especially now - during pandemics. Last year government increased airBaltic capitalization for 250 mil. of taxpayers money, then there came statistics that during last years trend is that airBaltic have lost regional airlines status and it continues loosing it’s market share, however now there are discussion to add additional 250 mil. to their capitalization.
Citizens are getting pissed of due to pumping money into sinking ship, or in this case, falling plane.
1 Like
Polish governments finance the public tv which is badly financially managed. In 2019 TVP received from polish budget 1 billion PLN. (260 000 000 USD)
1 Like
A malinvestment in Maui, HI may be buying a vacation rental in Maui. In looking at the many fees one couple paid annually to have the rental managed for them, insurances, and costs associated with the mortgage, I didn’t see much room for profits. This might be helpful if a loss would offset taxes. It appeared the couple figured once the mortgage was paid off, the vacation rental might generate a small profit. If I were to compare this investment with investing in 4 Bitcoin over a 10 year period of time, for a lot less work, I could let the price of my Bitcoin go up and vacation where ever I’d like. For me, buying a vacation rental is not in the foreseeable future.
1 Like
Investing in the PAST is a malinvestment, outdated technologies that we so desperately cling to because it is tradition. Just because something is a good investment in the past does not mean it is still a good investment today.
Technology is growing every day and if you get caught investing in the past, it will always be replaced with something better. An example would be to invest in “Oil Lamps” today when electrical light is available. Investing in outdated knowledge can also be of example. Imagine spending time to study how to become a Public Phone Booth Technician only to lose your job because of the rise of mobile phones.
Disclaimer: My answers might come across as arrogant but it is just my opinion, please feel free to correct me or argue with my thoughts.
2 Likes
Almost all government investment on projects are malinvestment .Whether its due to bad decision ,bad budget management or event cronyism.This is always the case whenever funds are in the hands of politician.
2 Likes
Research an investment (could be a public company, a 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).
-
One of Bulgaria’s richest men, the 63-year-old Bozhkov has dominated the country’s gaming business since the early 1990s after the fall of communism. He is believed to be worth about $1.35 billion and owns the country’s biggest lottery. The charges stem from an investigation into allegations of serious financial violations in the gambling industry, which reported a deficit of at least 210 million leva ($118 million) in lottery taxes and fees dating back to 2014.
-
This is still and it was one of the biggest lies of our decade of the middle man in Bulgaria,
they were lied by the national lottery this is one example of super corrupted, illegal, and huge deception not only malinvestment and misallocation for the history of Bulgaria.
credits: https://www.rferl.org/a/bulgaria-charges-gambling-czar-bozhkov-in-absentia/30405701.html
1 Like
Currently in Portugal the interest rate of most term deposits is 0,1%, so considering the inflation and the annual fees paid to the bank, that interest rate it is not enough even to pay these expenses, you simply lose money. So, for me this is a malinvestment.
1 Like
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).
Don’t buy a timeshare (from https://investorjunkie.com/investing/why-buying-a-timeshare-is-a-bad-idea/)
It’s been said in poker that if you can’t spot the patsy, it’s you. This applies to purchase a timeshare. The ones benefiting from the transaction are the salesperson and the owners of the resort. You, unfortunately, are stuck with a small slice of a unit that has little or no resale value.
Here are the issues with owning a timeshare:
- There is a huge resale market. Often you can pick up units for less than half of what was originally paid.
- Like a car, a timeshare depreciates once you “drive it off the lot” (take ownership).
- It’s rare that a timeshare increases in value. In fact, expect it to lose value, as the total cost of your ownership was marked up to cover sales presentations, incentives and giveaways.
- Timeshares are usually sold to you when you’re on vacation and your defenses are down.
- Most have high yearly maintenance fees. In my parents’ case, their fees are increasing every year, faster than the rate of inflation. For the amount that you pay in maintenance fees alone (forget about the initial “investment”), you could stay at a decent-quality hotel for a week.
1 Like
Good example of malinvestment is Irish housing bubble. Financial institutions were offering 100% loans, European Central Bank interest rates were low, buyers were encouraged to borrow larger amounts of money and there was more funding available for property developers. Ireland was building half as many houses a year as the UK which had almost 15 times as many people to house. There were never enough people in Ireland to fill the new houses. Real-easte prices eventually fell by 50%, construction employment dropped and the reckless lending practices cost taxpayers €64 billion or €16,000 for every man, woman and child living in the Republic of Ireland.
1 Like
I firmly believe a general life malinvestment is trying to move out of your parents house so young and possibly fresh out of high school here in the U.S. The life to be free and independent from a parent’s authority sounds lavish but not worth the amount of financial stress it can put on a teenager. Car, rent, utility bills, and possible school expenses are not to be taken lightly. Especially for any young man or woman out there with no major work experience, limiting both job and investment opportunities.
1 Like
I think any bank shares are an example of malinvestment, in my case I received some for making a mortgage for my home with one of these banks and there are only loosing value… every so often you get news about banks joining toguether to make 1 single bank corporación because of the bad and no consequences decisions they can take because at the end of all the people wil pay back to them with their own taxes because of bad politicians.
1 Like
Dogecoin because of the lack of narrative and fundamentals
US Fed buying up corporate debt is definitely one of the largest misallocation of capital in the history of the US.
For the very same reasons provided in this lesson the US is one large misallocation of capital
1 Like
How about ONE COIN. It never had blockchain, no technology, multi level marketing scam.
1 Like
Buying GME at $300 in 2021
2 Likes
malinvestment would be practically anything that does not contribute to your pockets… with exception of a few obviously items like food, but as well, it would be a malinvestment to buy a Ton of food without the means of storage and electricity costs to maintain a self degrading product in good conditions.
1 Like
meaning, a balance is needed between what you need, with what you have + how much do you have to spend, otherwise, it would turn to misallocation of capital
1 Like
After doing extensive research, I believe that investing in the stock market is a malinvestment. As we all know, money is fake and the stock market is a microcosm of the fake system. Looking at stocks like Nike or Apple, are over-valued stocks from the perspective of the pundits that look at a stock like “If I buy this tomorrow, how long will it take to get my money back” and from an investment perspective, you are banking on an industry controlled by big-wigs that manipulate the price and try to do the same with Bitcoin. Another malinvestment is medical stocks, given the growing distrust of conventional medicine and the bankruptcy of Purdue Pharma and other large medical corporations. I think it is a misallocation of capital because you can put that money in cryptocurrency, which is the future. Even the stocks that I am bullish are is because they are affiliated with cryptocurrency (IBM, Tesla, MicroStrategy, and Amazon).
1 Like
Much to be said about the US government’s Covid-19 relief stimulus plans. While the money to assist the people has been much needed for many families suffering through this crisis, in some cases, some of these funds were given to families with very large yearly incomes. Beyond that, why were some of these funds given to other countries, or even to some of our own cities as a way to bail them out of debt they created by poor planning and in no way can even be considered pandemic relief? Does this qualify as malinvestment?
1 Like