22 October 2001: Enron reveals the SEC is asking questions
Enron disclosed that the Securities and Exchange Commission had requested information about partnerships run by its chief financial officer. The shares fell about 20 percent that day. A week earlier Enron had reported a big loss and a mysterious cut to shareholder equity. Within six weeks the energy trading darling, once ranked among America's most innovative companies, would file for bankruptcy.
The lesson: If you cannot explain how a company makes its money, assume you are missing something.
What it meant for investors
$1,000 in Enron at the start of 2000 → $0 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the latest year on the wheel. Enron went to zero, so the position is worth nothing at all; the index turned the same money into $4,626.
What Enron teaches: If you cannot understand how a company makes its money, the market may not either; complex accounting and opaque disclosures are warning signs, not features.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $5.00 | $0 | $19,429 |
| 1995 | $15.00 | $0 | $14,783 |
| 2000 | $44.00 | $0 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought Enron? Every starting year and the full story →
More Enron history
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
Play Sixty-40