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Originally Posted by ChiefButthurt
I know, sometimes I just want to get aggressive and find that lucky stock. Maybe it doesn't exist right now.
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Keep your eyes open, and try to stick to what you know. Buffet famously avoids most tech stocks (and subsequently avoided the dot-com bubble in the early 2000's) because he says he doesn't understand the companies well enough to invest in them. I work in construction, and the majority of my projects are in healthcare. I spend a decent amount of my time in hospitals and talking to hospital executives.
Back in 2009, I looked at all the mandates hospitals were facing (and incentives they were receiving) to go to electronic medical records and upgrade their information systems.
There just happens to be a local company (Cerner) that is in that market. Not only did it present a unique opportunity to root for a local company, I knew a few people who worked there and it seemed to be a very solidly run organization.
I bought about as much Cerner stock as I could afford at that time. As of today, it's up 167%.
That situation is unique in that it all lined up so nicely for me, but it's an example of understanding what you're buying. If you don't know the company, you're not really investing. You're gambling.