What if you bought Sears in 2005?
US Consumer · Retail. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play0× · S&P 500 same money: $5,763
Every dollar is gone. Sears went bankrupt in 2018, so $1,000 invested in any of these years is worth exactly nothing today.
The story
Sears Holdings was created in 2005 when hedge fund manager Eddie Lampert, who had taken control of bankrupt Kmart by buying its debt, used it to acquire Sears, Roebuck. Wall Street hailed him as the next Warren Buffett, and the shares soared toward their 2007 peak on the theory that the stores' real estate and brands like Kenmore and Craftsman were worth far more than the market assumed.
Instead the retail business decayed. Lampert, who became CEO in 2013, cut investment in stores, ran divisions as competing units and used cash for buybacks while sales fell year after year. Walmart, Target, Home Depot and Amazon took the customers. To raise money Sears spun off or sold Lands' End, Sears Hometown, Craftsman and many properties, the latter via a real estate trust called Seritage, while borrowing from Lampert's own fund. Sears filed for bankruptcy in October 2018, and Lampert's fund bought the remaining stores out of bankruptcy in 2019. Shareholders in the old company were wiped out.
The lesson: Hidden asset value only matters if it reaches shareholders; when the operating business keeps burning cash, the real estate goes to creditors instead.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2005 | $100 | $0 | $5,763 | — |
| 2007 | $168 | $0 | $4,789 | — |
| 2008 | $105 | $0 | $4,626 | — |
| 2010 | $84.00 | $0 | $6,071 | — |
| 2012 | $32.00 | $0 | $5,312 | — |
| 2015 | $33.00 | $0 | $3,301 | — |
| 2018 | $3.60 | $0 | $2,519 | — |
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 2005 would be $5,763 today.
On this day
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. Sears is one of 258 positions on the wheel — including the ones that went to zero.
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