What if you bought Countrywide in 2000?
US Finance · Mortgages. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0.3× · S&P 500 same money: $4,626
$1,000 in Countrywide at the start of 2000 would be worth about $333 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
What happened: Countrywide was sold to Bank of America for scraps in 2008.
The story
Countrywide Financial was co-founded by Angelo Mozilo and grew into America's largest mortgage lender, famous for its aggressive sales culture and willingness to lend to almost anyone. In the housing boom of the mid-2000s it expanded rapidly into subprime and adjustable-rate loans with minimal documentation, and its stock roughly tripled between 2003 and 2007, making it a darling of investors chasing growth.
The boom's end was brutal. As home prices stopped rising in 2006 and borrowers defaulted, Countrywide's funding dried up. In August 2007, Bank of America made a two-billion-dollar investment, and in January 2008 agreed to buy the company in an all-stock deal worth around four billion dollars, a fraction of its earlier value. The purchase, completed that summer, cost Bank of America far more in legal settlements over the next decade than it paid for the business. Mozilo settled SEC fraud charges in 2010. Countrywide shareholders who held on got Bank of America shares, which then fell further, with only a small piece of their original value surviving.
The lesson: Rapid growth in lending often means loosening standards; in finance, the fastest growers in a boom are frequently the first casualties in the bust.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $12.00 | $333 | $4,626 | 0.3× |
| 2003 | $14.00 | $286 | $7,727 | 0.3× |
| 2005 | $37.00 | $108 | $5,763 | 0.1× |
| 2007 | $42.00 | $95.24 | $4,789 | 0.1× |
| 2008 | $9.00 | $444 | $4,626 | 0.4× |
| 2010 | $4.00 | $1,000 | $6,071 | 1.0× |
| 2012 | $4.00 | $1,000 | $5,312 | 1.0× |
| 2015 | $4.00 | $1,000 | $3,301 | 1.0× |
| 2018 | $4.00 | $1,000 | $2,519 | 1.0× |
| 2020 | $4.00 | $1,000 | $2,092 | 1.0× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2010, turning $1,000 into $1,000. The S&P 500 from that same year: $6,071.
On this day
- 11 January 2008: Bank of America agrees to buy Countrywide
- 16 August 2007: Countrywide taps its entire $11.5 billion credit line
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Countrywide is one of 258 positions on the wheel — including the ones that went to zero.
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