2 March 2009: AIG posts the largest quarterly loss ever
Insurance giant AIG reported a loss of $61.7 billion for the fourth quarter of 2008, the biggest quarterly loss in US corporate history, and received yet another government rescue. Much of the damage came from a small unit that had sold credit default swaps on mortgage securities. The Dow closed below 7,000 that day for the first time since 1997. A tiny division had nearly destroyed a giant.
The lesson: Small corners of a big company can hold risks large enough to sink the whole thing.
What it meant for investors
$1,000 in AIG at the start of 2010 → $2,667 today, vs $6,071 in the S&P 500.
We start the clock at the start of 2010, the first year in our price data after the event. That is 2.7 times the money, but $3,405 less than a plain index fund made over the same years.
What AIG teaches: A small, poorly understood unit with concentrated risk can sink an otherwise sound giant; tail risks matter more than average profitability.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2010 | $30.00 | $2,667 | $6,071 |
| 2012 | $23.00 | $3,478 | $5,312 |
| 2015 | $56.00 | $1,429 | $3,301 |
green = beat the S&P 500 · red = lost money
What if you bought AIG? Every starting year and the full story →
More AIG history
- 16 September 2008: The government rescues AIG
- 10 November 2008: AIG's bailout grows to about $150 billion
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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