What if you bought Enron in 1990?
US Industry · Energy trading. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0× · S&P 500 same money: $19,429
Every dollar is gone. Enron went bankrupt in 2001, so $1,000 invested in any of these years is worth exactly nothing today.
The story
Enron started as a Houston natural gas pipeline company formed in 1985 and, under Ken Lay and Jeffrey Skilling, reinvented itself as an energy trading powerhouse. Fortune magazine named it America's most innovative company for six years running. Its online trading platform, EnronOnline, became a fixture in energy markets, and the shares soared to a peak in 2000, making it one of the largest US companies by reported revenue.
The profits were largely illusory. Enron used mark-to-market accounting to book expected future profits immediately, and moved debts and losses into off-balance-sheet partnerships run by CFO Andrew Fastow. Its traders also exploited the 2000-01 California electricity crisis. Skilling resigned abruptly in August 2001; in October Enron reported a large loss and a write-down of shareholder equity, and in December it filed for bankruptcy, then the largest in US history. Employees lost jobs and retirement savings. Auditor Arthur Andersen collapsed, executives were convicted, and Congress passed the Sarbanes-Oxley Act in 2002.
The lesson: 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.
$1,000 invested at the start of each year
| 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
There was no good entry point: every starting year ends at zero. The same $1,000 in the S&P 500 from 1990 would be $19,429 today.
On this day
- 30 July 2002: Sarbanes-Oxley signed into law
- 22 October 2001: Enron reveals the SEC is asking questions
- 2 December 2001: Enron files for bankruptcy
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. Enron is one of 258 positions on the wheel — including the ones that went to zero.
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