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Here is a great example. The price is $3. How much can I lose? This is a great example. Because, you know, I don't have a computer and I can't do advanced math, but just do it. Let's say you buy and your neighbor buys $10,000 worth of shares at 50. The stock is now worth three, and you invest $25,000 at three.
If it drops to zero, who will lose the most? A lot of people can't answer that question, you know. Well, I mean, if you invest a billion three at a time, you could lose a billion. This, you know. I mean, every year, a lot of companies fail, you know. You just have to...They can go down to zero . Uh-huh.
Here is a good idea that helped me a lot . The darkest night is before dawn. Ugh, this business is terrible. He is just terrible. You have to buy the whole group. This is not the best way to make money. This is what you probably talked about before dinner. Our freight car shipments in 1979, 96,000 freight cars were shipped to the United States.
Two years later, they had fallen to 45,000, the lowest figure in 23 years. So they're falling from 96,000 to 45,000. People are saying business is terrible, it's terrible, it's miserable. Then they drop to 25,000. They say, " Just buy more." There are about 15 opportunities to lose money on this. There are about 15 freight car suppliers, 15 manufacturers.
Business was terrible. But last year we shipped 7,000 freight cars in the United States. Business continued to be miserable. And I'll give you an example where there is an even greater chance of losing money. Energy services industry. Here we all had a great opportunity to get a good beating. In 1982, there were 11,000 oil rigs drilling wells throughout Oklahoma, Texas, and Colorado.
We tracked the number of rigs every week. The number of installations fell from 11,000 in 1982 to 6,000 in 1983. Then in 1984 it fell even lower. And here are hundreds and hundreds of companies. Companies that made drilling fluids and performed well work , hydraulic fracturing companies, oilfield services companies, all the measurement companies, Schlumberger, bit manufacturing companies.
There are many opportunities to lose money here. There is an equal opportunity for serious losses. And people said, "Listen, business is terrible. Let's buy these companies." Well, the conversion was only 1,000 three years ago. So, it fell from 11,000 to 6,000, and then to 5,000. And 8 years later it was already less than 1,000.
The industry started to really change about 2 years ago. So it's easy to say that business can't get any worse. I was lucky, in addition to the metallurgical industry in South Carolina, I also had a textile industry. This is a great group to track because you're following companies like J.P. Stevens , founded in the 18th century, and WestPoint Pepperell, also founded in the 18th century.
Burlington Industries is one of the newer companies, founded in 1904. These people have been through recessions, depressions, and world wars. They saw everything. There is a great saying in the textile industry. It's always darkest before total darkness. Yes. This is a good thing to remember, because when business is terrible, it can get a lot worse.
You get horror to the sixth degree, and this ... I love these numbers, I think I should leave you. Have you ever watched, I love the show "Jeopardy". Have you ever watched "Jeopardy" where people come out and know these numbers. Remember, they know the numbers, they know which country the Boxers took their first vacation in, they know Phil Rizzuto's batting average and what his wife's name was, they know the ticker symbol of Xerox before it was Haloid, they know everything.
And you watch the show and feel like a complete idiot because they answer all these questions. But they are really smart. I only owned these stocks before, King World. Immediately after that, "Wheel of Fortune" is shown. And they... what happens is they have this word, there's a T-H , and there's a T, and they say, " buy a vowel here," she buys a U, you know, it's "Buy an I," and, you know, Vanna spins the wheel, and they buy an A, and you know, you feel like you've been rehabilitated by watching "Wheel of Fortune" after feeling like a complete idiot on " Jeopardy," and it's really smart.
It's, uh, "When it bounces to 10, I'll sell." Here's a great rule: uh, someone buys a stock at 10, and it goes down to 6, they say, "If it goes back to 10 , I'll sell." Now, I think Math 4 and 6 , I can handle this little math. I think it's about a 66% return. You should buy if you think the price will go back to 10 , buy that damn thing full stop.
But they think if the price goes back to 10, I will sell. So what you should do is never put a round number, because I think for the next 26 years the stock will be between five and nine and a quarter, it will never go to 10. So maybe put nine and eight or eight and three quarters, but just saying I'll sell the stock when it gets back to the purchase price is a very important rule.
This is very...This is one of the key rules. The stock doesn't know you own it. Remember this. You can be a terrible person. You can, you know, never help anyone, never do anything right, have 67 wives, never do anything right. If you've owned Coca-Cola for the past 50 years, it's grown 300 times . You can be the best person in the world, help the Special Olympics, help people with intellectual disabilities , help the poor, help people with AIDS.
If you owned Bethlehem Steel, it is lower now than it was 30 years ago. It's not your fault. Don't take it personally, you know. But people sometimes treat stocks like a grandchild or a puppy. I mean, they...they... they think the action knows who you are, you know, it's, well, you know. It doesn't work that way.
This... let me worry. I own conservative stocks. I don't need to worry . I own conservative stocks. I invested in Con Ed , 80%, then tripled, Public Service Indiana fell 90%, Gulf States Utilities, Long Island Lighting. It might be an oxymoron—quality Texas banks that have depreciated to zero. We had...quality New England banks that depreciated to zero.
These were companies that had existed for 150 years, 120 years. They say, "I own good service stocks. I don't need to worry." I have seen many people inherit stocks from someone. They'll say, "You know, my mother said on her deathbed, don't sell Long Island Lighting." You always wondered, you know, if she was going to heaven, or hopefully where she was going to heaven.
You know, they would talk about some game or vacation or card game, imagine on your deathbed you're talking about Long Island Lighting. You know, you say, "Well, you get it." But you hear stories like this all the time. And I think your mother would notice that, she wouldn't sell it for 29, but she would notice this little factory that was 6 billion over budget.
Nobody needed it, it didn't work, and Long Island stopped developing. So maybe she would have sold the shares at 22 or gotten out of them at 18. She wouldn't have let them fall to four. You know, just because you inherited shares of a so-called conservative company, like Eastman Kodak, which fell 75%, or IBM, which fell 75%.
Don't tell anyone you own " conservative" stocks. Companies are very dynamic. I don't believe this argument.
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