Western medicine. While in the short term it produces high gains only on top of more and more people remaining sick and diying.
Once all are dead, who will pay the premiums, the invoices, the hospitals… Other scenario is now possible: if people become healthy they are not used anymore.
Well, we could argue over wether who wins the battle… a healthy mind or the short term thinking making you sick… hm
nice example. I think the olympics is the same… It makes aboslutely no sense to have it, its only for some short lived prestige. What happens then? Nobody will use the infrastructures anymore because the individual countries never need this kind of large stadiums and so forth…
The after-Covid nationalization of companies who have been already bankrupt for a few times and therefore have been sold and re-sold already for years. E.g. for Alitalia I don’t have much hope it will become better after nationalization. A real malinvestment for the citizens.
boo.com lost $42 million in 1999 because they wanted to invest in the dot-com bubble but failed. The company used $188 million in investing money in a year and a half. The user interface was poor and lower than expected sales led the company to demise.
Aerospace bailouts.
In the last 20 years Swedish banks like Swedbank and SEB plowed billions of SEK into their tiny but booming neighbors across the Baltic Sea. Now severe recessions are turning the Baltic states into the Swedish equivalent of what subprime mortgages were to American banks. The crisis also echoes the one banks in Sweden faced in the early 1990s, when bold choices early in mounting a bailout paid off handsomely. That history gives bankers here confidence they can pull off the feat again, this time with the failing finances of entire countries.
I can name one investment that recently turned out to be a malinvestment for many.
Wirecard received big loans from major banks and investment firms such as Deutsche Bank, Commerzbank, Credit Suisse and Softbank. In their defense, the company they invested in had been doing very well in terms of numbers and their investments were most likely not intended to be malinvestments. There were, however, a number of indicators pointing to the chance that the numbers might not have been what they appeared to be. Could more research have prevented this?
Wirecard
A most recent one that never had a chance due to poor management and deciet
€1.9 billion, which apparently never existed, were found missing in a special audit. The CEO was arrested, the board filed for insolvency, and a warrant for the missing COO was issued.
Of course most people would have heard of the 1MDB debacle. Lots of corruption and mismanagement. They even have the audacity to bank in straight into their personal account. Worse still they are still people who will support and rally for the clown. Brings such a shame to the country.
During the dot.com bubble. You could place “.com” at the end of your name and that alone could skyrocket your stock price. Adding 4 characters to your name has no intrinsic value in itself and no one can use it for anything. It doesn’t add value or help anyone in the world. So then your stock would in this bubble be overvalued and when something is overvalued, it will get back to fair value and also maybe undervaluation.
xrp is dumping coins into the market and devaluating the coin.
In Italy usually public company are by definition THE MALINVESTMENT, are often a Place avere you can barter a job Place in Exchange of political Favour.
As private company i would pick Alitalia (italian airlines) a basically failed Company sustain with taxpayer Money in order to keep it alive.
For me the stock market is overpriced right now
It is still breaking new record highs but people is not considering the large amount of digits being poured in the economy by central banks.
Their valuation (stocks) is in USDs, for example, which is loosing value … so even if the nominal value seems to be ok, the true value is what matters
Not a good place to be (mostly)… maybe there are few exceptions whose nominal value is just breaking the inflection points.
The healthcare industries that focus on profit over health.
Health is one of our greatest assets
Current massive borrowing and spending (Quantitative easing) by world governments - The Bank of England estimates that the first £375 billion of QE led to 1.5-2% growth in GDP. In other words, through QE it takes £375 billion of new money just to create £23-28bn billion of extra spending in the real economy.
Leveraged ETFs: If you buy and hold these funds, the big losing days cancel out the big winning days, and the costs of rolling over expiring derivatives eat up any remaining return,” Puri explains.“If the timing’s not perfect, you get a different experience than you expect,” Dorsey says.
In the USA, my nomination for one of the worst examples of malinvestments is the 2008, and now the COVID-19 induced, “investments (bailouts)” of the supposed to-big-to-fail Wall Street banks. Billions of dollars were, and are now, being “loaned” or given to Goldman Sachs, AIG, Bank of America and others to shore up their foundations which are crumbling due to their poor monetary decisions over the course of many years.
https://projects.propublica.org/bailout/list
My argument, in general, is if banks are so irresponsible that they don’t plan for economic crisis properly and they become insolvent, let them fail. Despite the massive pain this would initially cause in public and citizens lives, it would serve as a good example to other institutions that the government will not always be there to hold their hand and catch the when they fall. My hypothesis is that the others remaining would take note and adjust their practices accordingly.
I will try to answer with my very limited understandings. I think a malinvestment example is, this trickle down economic theory.
While creating more debt for a country and making spending power less to the people (majority of high taxes collected) only to collect back higher taxes or budget cuts are the norm. We bailout companies that perform poorly or are “too big to fail” and reward them with tax payers funded bailouts. This in my opinion kills the buying power of the currency and it kills capitalism while rewarding poorly managed businesses.
A part of the 2008 financial crises were sub prime mordgaes for low income households. Interest rates for house lowns were not based on the probability of being paid back, but were artificially kept low, partly as a government programm for affordable housing and partly and also related based on the speculation that prices were going to go up in the future and defaults would not matter much, because the banks would have the house as collateral. Consequence were empty houses with dramatically decreased value after too many defaults.
I’d argue that investing in the current state of the US Stock Market would be a malinvestment. There are a lot of fingers pointing towards the stock market as a sign of economic recovery, but a large percentage of the gains are weighted towards the top 10 listed companies, all within the tech industry, while other industries such as retail and food service are suffering. The tech companys growth skew the true state of the US economy, and with US stimulus flooding the market, a lot of people are looking for investments that will appreciate in value.
Invest in crypto instead, who knows where the stock market will be in a year.