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But if you didn't understand the company, if you were just buying on the fact the stock had gone from 26 to 16 and then it got to 10, what would you do when it went to nine? What would you do when it went to eight? What would you do when it went to seven? This is the problem that people have is they sell stocks because they didn't know why they bought it.
Then it went down and they don't know what to do now. You flip a coin, you walk around the block, you know, what do you do? Today we are learning from one of the greatest investors in history. Peter Lynch was a legendary mutual fund manager at Fidelity Mellin Fund. He achieved a 29% annual return, absolutely crushing the stock market over 13 consecutive years.
During that period, he managed to grow the fund's size from $18 million to 14 billion. Afterwards, he retired early at 46 years old. And now, Mr. Lynch is sharing with us how to make millions during a stock market crash. A very important thing to know in today's economic conditions. 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 we call it a correction. And uh uh so 50 declines in 93 years about once every 2 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 6 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. They're going to happen. No one knows when they're going to happen. It would be very people tell you about it after the fact that they predicted it, but they predicted it 53 times.
And uh so you can take advantage of the volatility in the market if you understand what you own. One of the things I find a rule I I a couple rules I want to throw I find useful, excuse me, is a lot of times people buy on the basis the stock has gone down this much. How you know how much further it can go down?
I remember when Polaroid went from 130 to 100 and people said, "Here's this great company, great record." But ever gets below 100, you know, just buy every share, you know, and it did get below 100. A lot of people bought on that basis saying, "Look at this company 135 to 100. It's now 95. What a buy." Within a year was 18.
And this is a company with no debt. I mean, this is a company. It was just so overpriced. It went down. Uh I did the same thing in my uh I think my first or second year Fidelity. Kaiser Industries had gone from $26 a year share to 16. I said, "How much lower can it go at 16?" So, I think we bought one of the biggest blocks ever on the New York on the American Stock Exchange at Kaiser Industries at 14.
I says, you know, it's gone from 26 to 16. How much lower can it go? Well, at 10, I called my mother and said, "Mom, you're going to uh look at this Kaiser Industries. I mean, how much lower can it go? It's gone from 26 to 10." Well, it went to six. It went to five. It went to four. It went to three.
And uh now I unfortunately this happened rapidly or I would probably be still catting or being you know working at the stop and shop but I it happened fast so I was able to this was compressed uh and at three I figured out you know there's something very wrong here because Kaiser Industries owns 40% of Kaiser steel they own 40% of Kaiser aluminum they own 32% of Kaiser cement they own Kaiser Broadcasting they own Kaiser sand and gravel Kaiser engineers they own Jeep they own business after business and they had no debt.
Now, I learned this very early. This is might be a breakthrough for some people. It's very hard to go bankrupt if you don't have any debt. It's it's tricky. Some people can approach that. It's a real it's a real achievement, but they had no debt. And the whole company at three was selling at about 75 million.
In that point, it was equal to buying one Boeing 747. I said, "There's something wrong with this company selling for 75 million." I was a little premature at 16, but uh I said, "Everything's fine and eventually this will work out." And they what they did is they gave away all their shares to their shareholders.
They they passed out shares in Kaiser Mint. They passed out shares in Kaiser aluminum. They passed out their public shares in Kaiser Steel. They sold all the other businesses and you got about $50 a share. And but if you didn't understand the company, if you're just buying on the fact the stock had gone from 26 to 16 and then it got to 10, what would you do when it went to nine?
What would you do when it went to eight? What would you do when it went to seven? This is the problem that people have is they sell stocks because they didn't know why they bought it. Then it went down and they don't know what to do. Now, do you flip a coin?
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