Occasionally you'll hear a stock-market analyst predict that the Dow Jones Industrial Average could go to 20,000 over the next 10 years. Pie-in-the-sky thinking? Not really.

If you earn just 7 percent a year on your money, your money will double in 10 years. Thus, a doubling of the Dow Industrials in 10 years implies a 7 percent average annual return. In those terms, a move 20,000 in the Dow is not only possible but expected.

This example brings up the problems that some individuals, not to mention business media, have with numbers, especially big numbers. I can't tell you how often I receive calls from nervous investors ready to dump the stock of a billion-dollar company because they heard on the local news that the company lost a lawsuit for $5 million. Quite frankly, $5 million to a company with billions in sales is virtually meaningless to the stock's investment prospects.

When you hear numbers being thrown around by analysts, friends, or the press, don't be afraid to question the veracity of the numbers. Chances are, there's probably more to the story.