What if you bought KPN in 2000?
World · Netherlands. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0.1× · S&P 500 same money: $4,626
$1,000 in KPN at the start of 2000 would be worth about $70.00 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
KPN is the former Dutch state telephone company, privatised in the 1990s. At the height of the telecom bubble, in 2000, it was one of the most valuable companies in the Netherlands, and it borrowed heavily to buy into mobile networks, including Germany's E-Plus, and to pay steep prices for third-generation spectrum licences. When the bubble burst, the shares fell by roughly 90 percent in three years, and its pan-European data network venture KPNQwest went bankrupt in 2002.
KPN survived, but never recovered. In 2013 it fended off a takeover by Carlos Slim's America Movil, sold E-Plus to Telefonica, and carried out a large share issue that diluted existing shareholders and pushed the share price to new lows. Since then it has been a reliable, slow-growing domestic network operator investing in fibre and paying dividends. Investors who bought near the 2000 peak lost most of their money and never got it back. It shows how even essential infrastructure can be a terrible investment if bought at euphoric valuations.
The lesson: Essential infrastructure is not the same as a good investment, because paying bubble prices for a utility-like business can lock in losses for decades.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $60.00 | $70.00 | $4,626 | 0.1× |
| 2003 | $6.00 | $700 | $7,727 | 0.7× |
| 2005 | $7.00 | $600 | $5,763 | 0.6× |
| 2007 | $11.00 | $382 | $4,789 | 0.4× |
| 2008 | $12.00 | $350 | $4,626 | 0.3× |
| 2010 | $12.00 | $350 | $6,071 | 0.3× |
| 2012 | $9.00 | $467 | $5,312 | 0.5× |
| 2015 | $2.70 | $1,556 | $3,301 | 1.6× |
| 2018 | $2.90 | $1,448 | $2,519 | 1.4× |
| 2020 | $2.60 | $1,615 | $2,092 | 1.6× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2020, turning $1,000 into $1,615. The S&P 500 from that same year: $2,092.
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. KPN is one of 258 positions on the wheel — including the ones that went to zero.
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