Tito Trinidad bankrupt...

[STREET CLEANER]

He didn't pay for bonds. He payed for individual shares in a mutual fund. It still has value and throws off tax free cash flow.

The link said "now-worthless government bonds" which is untrue.

Yes, he most likely is in the red. But drawing a straight line from being in the red to being bankrupt is not reasonable

I invest myself in triple tax free mutual funds. Even if they go down in value you have to think the long run. It doesn't hurt either that with the interest earned it continues to buy into itself

[racer59]

Even if they go down in value you have to think the long run. It doesn't hurt either that with the interest earned it continues to buy into itself

That is partially my point. As to your second comment, that defeats the purpose of investing in muni funds. Since, someone like Tito invests capital to create cash flow because he dosent have steady employment.

Reinvesting dividends in a muni fund is counter intuitive, since this is not a capital appreciation investment, muni funds are used for income portions of a portfolio...

[George Orwell]

Puerto Rico is a good place to invest with their 4 percent tax rate. I dont know why PR is not a success like Singapore. instead they are riddled in debt

[racer59]

Puerto Rico is a good place to invest with their 4 percent tax rate. I dont know why PR is not a success like Singapore. instead they are riddled in debt

It's called pensions.

[JDD1]

Its unfortunate that he lost all of his savings on bad investments. I hope he doesn't consider entering the ring again to make money.

[oc9979]

I read somewhere that Puerto Rico was worse than Detroit in term of being bankrupt

Only a idiot would buy those bonds. Trinidad should've got a real investor who wasn't a complete moron

Very true and from what I read. Puerto Rico can not file for bankruptcy. Each city has to file for it

[Canelo Phresh]

Delahoya v Trinidad II : In Puerto Rico : In Delahoyas Backyard.

[oc9979]

I happen to be a bond trader. So here are the facts.

1. He cant be bankrupt, because PR has not defaulted, nor have they missed any interest payments as of yet.

2. The actual article states he made that much during his career, not that this was his total investment.

3. His FA invested his money in PR Bond MUTUAL FUNDS not individual bonds. Funds have to unload bonds when they fall below investment grade. Which only recently happened to PR. We dont know when the investment was made, it could have been 5 years ago or 10 years ago.

4. The vast majority of wealthy and ultra wealthy invest in muni's, due to the triple tax free status of the potential cash flow. It seems his FA had him overleveraged, but we don't know why. Maybe Tito requested certain annual cash figure requirements.

There is much more than meets the eye here, so its not as easy to just say he is Bankrupt other than sensational news stories that sell papers and lazy journalism.

1. Unlike Detroit and other United States municipalities, Puerto Rico cannot file for federal bankruptcy protection, making the prospect of a restructuring by the commonwealth potentially even more uncertain to creditors because there is no clear template.
http://dealbook.nytimes.com/2014/04/...ype=blogs&_r=0

2. The article stated that he made $90 millions through his career and the investment was $63 million

[kadyo's]

it's his money, and his responsibility to at least look at his investments quarterly.


these guys get a lot of money and they think "i don't ahve to do anything." when you get your hands on some dough is when the real work starts. you have to be responsible for your own money.

It should be monthly with a group of say 8 to 10 people of the wisest people of your clan who will get honorarium after every meeting.

This is very sad and Tito learned it the hard way. He'll get by but it'll be a different lifestyle from now on.

[racer59]

1. Unlike Detroit and other United States municipalities, Puerto Rico cannot file for federal bankruptcy protection, making the prospect of a restructuring by the commonwealth potentially even more uncertain to creditors because there is no clear template.
http://dealbook.nytimes.com/2014/04/...ype=blogs&_r=0

2. The article stated that he made $90 millions through his career and the investment was $63 million

1. I am aware. To my point, this dosent correlate to him filing for bankruptcy.

2. I may have misread that. I apologize.