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I made 10 or 15 times my money in Dunkin Donuts. Those are the kind of stocks I can understand. If you don't understand, it doesn't work. This is the single biggest principle. And it bothers me that people are very careful the money. The public when they buy a refrigerator, they got to consume reports.
They buy a microwave oven. They do that. They ask people what's the best kind of radar range or what kind of car to buy. They do research on the apartments. when they go to when they go on a trip to Wyoming, they get the mobile travel guide or California. When they go to Europe, they get the Michelin travel guide, people will hear a tip on a bus on some stock and they'll put half their life savings in it before sunset and they wonder why they lose money in the stock market.
And when they lose money, they blame it on the institutions and program training. That is garbage. They didn't do any research. They bought a piece of junk. They didn't look at the balance sheet and that's what you get for it. And that's where we being driven to. And it's self-fulfilling. The public does terrible investing and they they say they don't have a chance.
It's because that's the way they're that's the way they're acting. I'm trying to convince people there is a method. There are reasons for stocks that go up. Uh CocaCola, this is very magic. It's a very magic number. Easy to remember. Coca-Cola is earning 30 times per share what they did 32 years ago.
The stock has gone up 30fold. Bethlehem Steel is earning less than they did 30 years ago. the stock is half its price of 30 years ago. Stocks are not lottery tickets. There's a company behind every stock. If a company does well, the stock does well. It's not that complicated. People get too carried away.
And first of all, they try and predict the stock market. That is a total waste of time. No one can predict the stock market. They try to predict interest rates. I mean, this is a if anyone predict interest rates, right, three times in a row, they'd be a billionaire. Considering there's not that many billionaires on the planet, it's very, you know, I took I had logic, so I had a syllogism and uh studied these when I was in Boston College.
There can't be that many people who can predict interest rates because there'd be lots of billionaires and no one can predict the economy. I a lot of people in this room were around in 1981 and 82 when we had a 20% prime rate with double-digit inflation, doubled digit unemployment. I don't remember anybody telling me in 1981 about it.
I didn't read. I studied all this stuff. I don't remember anybody telling we're going to have the worst recession since the depression. So, what I'm trying to tell you, it'd be very useful to know what the stock market is going to do. It'd be terrific to know that the Dow Jones average a year from now would be X, that we're going to have a full scale recession or interest rates going to be 12%.
That's useful stuff. You never know it, though. You just don't get to learn it. So, I've always said if you spend 14 minutes a year on economics, you've wasted 12 minutes. And I I I really believe that. Now, I have to be I have to be fair. I'm talking about economics in the broad scale, predicting the downturn for next year or the upturn or M1 and M23B and all these all these M's.
The uh I'm talking about economics to me is when you talk about scrap prices. When I own auto stocks, I want to know what's happening to used car prices. When used car prices going up, it's a very good indicator. When I own hotel stocks, I want hotel occupies up. When I own chemical stocks, I want to know what's happening.
These are facts. If aluminum inventories go down five straight months, that's relevant. I can deal with that home affordability. I want to know about I own uh Fanny May or I own a housing stock. These are facts. You can there are economic facts and there's economic predictions and economic predictions are a total waste.
And uh interest rates Alan Greenspan is a very honest guy. He would tell you that he can't predict interest rates. He could tell you what short rates are going to do in the next six months. Try and stick them on what the long-term rate will be three years from now. He'll say, "I don't have any idea." So how are you the investor supposed to predict interest rates if the head of Federal Reserve can't do it?
So I think that's uh but you should study history and history is the important thing you learn from. What you learn from history is the market goes down. It goes down a lot. The math is simple. There's been 93 years a century. This is easy to do. The market's had 50 declines of 10% or more. So 50 declines in 93 years.
About once every two years the market falls 10%. We call that a correction. That means that's a euphemism for losing a lot of money rapidly. But we call it a correction. And uh uh so 50 declines in 93 years, about once every two years, the market falls 10%. Of those 50 declines, 15 have been 25% or more.
That's known as a bare market. We've had 15 declines in 93 years. So every six years, the market's going to have a 25% decline. That's all you need to know. You need to know the market's going to go down sometime. If you're not ready for that, you shouldn't own stocks. And it's good when it happens.
If you like a stock at 14, it goes to six. That's great. You understand the company, you look at the balance sheet, and they're doing fine. You're hoping to get to 22 with it. 14 to 22 is terrific. 6 to 22 is exceptional. So you take advantage of these declines.
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