Last fall, a spooky woman appeared on CNBC and predicted that the stock market was going to crash. Frankly, her charts, graphs, and foreboding appearance made me a little nervous.

The market's been in a tailspin ever since -- but is a true crash really imminent?

Honestly, I have no idea.

One thing I do know ...
On Oct. 19, 1987, the market did crash, and it delivered a sucker punch to the guts of investors everywhere -- like my father, who spent the entire day sitting on the couch in his suit and tie, staring at the television.

Even seasoned pros on the exchange floors stood around dumbfounded -- their arms akimbo and their eyes wide with disbelief. Janna Sampson, co-chief investment officer at OakBrook Investments, told The Wall Street Journal, "I can remember standing in front of a Quotron machine in a crowd of people and mouths were just hanging open."

That's certainly frightening. But get a load of the very next line of the Journal article: "Most investors today have little if any memory of the crash."

Money heals even the deepest wounds
After all, investors who didn't stampede for the exits haven't just recovered their losses -- they've made absolute fortunes. Of the 14 companies that are still a part of the Dow Jones Industrial Average since Black Monday:

  • 13 of 14 are at least six-baggers.
  • 10 are at least nine-baggers.
  • Four have gained 2,000% or more - meaning every $10,000 invested in these companies has become at least $210,000.

You're probably familiar with many of these incredible performers:

Dow Component

Gain Since Black Monday

Merck (NYSE: MRK)


American Express (NYSE: AXP)


ExxonMobil (NYSE: XOM)


As of May 14 with dividends reinvested.

So what?
Sure, that kind of performance could just be a fluke, or some sort of investing anomaly affecting only Dow stocks. But what if the real reason is that great companies' stocks invariably grow over long periods of time, despite dips, dives, and crashes?

I decided to look at the stocks David and Tom Gardner have recommended to their Motley Fool Stock Advisor subscribers. After all, the Gardner brothers are renowned for their belief that the surest way to build wealth over time is to buy and hold great companies.

As expected, the top half of their scorecard held plenty of winners and big gainers, as well as a smattering of laggards -- the latter caused the skeptic in me to smirk slightly. But by the time I got to the bottom, that smirk was gone. Of the 24 picks David and Tom made in their first year (April 2002 to April 2003):

  • 23 of 24 are (or were sold) in positive territory.
  • Nine have at least tripled in value.
  • Four are up more than 500% -- meaning every $10,000 invested in these companies has become at least $60,000 in just five years.

Talk about a testament to the power of investing over time! Although only a handful of David and Tom Gardner's picks are part of the Dow, all of their picks had one thing in common when recommended -- they were great companies selling at great prices.


Gain Since Stock Advisor Recommendation

Costco (Nasdaq: COST)



Activision (Nasdaq: ATVI)



Marvel (NYSE: MVL)



Can it really be that easy to make money?
Well, yes and no. Investing in innovative, industry-dominating companies over the long haul has unparalleled wealth-building power (overall, the Gardners' picks are up an average of 65%), but finding those companies before the Wall Street herd does is no easy task.

It's equally challenging to learn not to let yourself be talked out of the market by the talking heads predicting doom on cable TV. A trusted resource like David and Tom's Motley Fool Stock Advisor can help you uncover life-changing investments. As for the other part ... well, that's up to you.

I'm going to keep on investing, but if you don't, look me up in 20 years. I'd be curious to know how that works out for you.

In the meantime, I invite you to take a free, 30-day trial of Stock Advisor. All you have to do is click here.

This article was first published Oct. 26, 2007. It has been updated.

Fool contributor Austin Edwards is decidedly not a fan of spooky soothsayers, Desperate Housewives, or the Denver Broncos. He does not own shares in any of the companies mentioned. Costco, Activision, and Marvel are Stock Advisor recommendations. American Express is an Inside Value recommendation. The Fool has a disclosure policy.