15 October 2018: Sears files for bankruptcy
Sears Holdings filed for Chapter 11, weighed down by billions in debt and years of falling sales. The company that had once been America's largest retailer, and whose catalog was the Amazon of its day, had been shrinking for over a decade while selling off assets and brands. Its decline was slow, public and well documented, which did not stop some investors from hoping for a turnaround until the end.
The lesson: A famous name is not a business model; check whether customers still show up.
What it meant for investors
$1,000 in Sears at the start of 2018 → $0 today, vs $2,519 in the S&P 500.
We start the clock at the start of 2018, the year it happened. Sears went to zero, so the position is worth nothing at all; the index turned the same money into $2,519.
What Sears teaches: Hidden asset value only matters if it reaches shareholders; when the operating business keeps burning cash, the real estate goes to creditors instead.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2012 | $32.00 | $0 | $5,312 |
| 2015 | $33.00 | $0 | $3,301 |
| 2018 | $3.60 | $0 | $2,519 |
green = beat the S&P 500 · red = lost money
What if you bought Sears? Every starting year and the full story →
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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