What if you bought Morgan Stanley in 2000?
US Finance · Bank. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play2.0× · S&P 500 same money: $4,626
$1,000 in Morgan Stanley at the start of 2000 would be worth about $2,000 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
Morgan Stanley merged with the retail brokerage Dean Witter in 1997, an odd marriage of white-shoe investment bankers and stockbrokers selling to Main Street. The 2000s saw boardroom feuds and a heavy tilt toward trading and leverage, and in September 2008, the week after Lehman failed, the market turned on Morgan Stanley next. It survived by becoming a bank holding company and accepting a large investment from Japan's Mitsubishi UFJ.
The interesting part is what came after. Under James Gorman, the firm bought Citigroup's Smith Barney brokerage in stages from 2009, then E*Trade in 2020 and fund manager Eaton Vance soon after. The deliberate pivot was away from volatile trading toward wealth and asset management, which earn steadier fees and need less capital. Investors were slow to believe it: the shares bottomed in the early 2010s at a fraction of their pre-crisis price. As the fee businesses grew to dominate earnings, the stock was rerated, and by 2026 it traded far above its 2007 level.
The lesson: Changing a business mix toward steadier, less capital-hungry revenue can earn a company a higher valuation multiple, not just higher profits.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $70.00 | $2,000 | $4,626 | 2.0× |
| 2003 | $40.00 | $3,500 | $7,727 | 3.5× |
| 2005 | $55.00 | $2,545 | $5,763 | 2.5× |
| 2007 | $82.00 | $1,707 | $4,789 | 1.7× |
| 2008 | $53.00 | $2,642 | $4,626 | 2.6× |
| 2010 | $30.00 | $4,667 | $6,071 | 4.7× |
| 2012 | $15.00 | $9,333 | $5,312 | 9.3× |
| 2015 | $39.00 | $3,590 | $3,301 | 3.6× |
| 2018 | $53.00 | $2,642 | $2,519 | 2.6× |
| 2020 | $51.00 | $2,745 | $2,092 | 2.7× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2012, turning $1,000 into $9,333. The S&P 500 from that same year: $5,312.
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. Morgan Stanley is one of 258 positions on the wheel — including the ones that went to zero.
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