How I Invest
I try to buy only two types of stocks.
1). A stock that will significantly outperform the market because their is a disconnect between it's value and share price.
2). A stock that will significantly outperform the market because it's on the right side of a long lasting catalyst, theme or bull market of some sort.
Of course they still have to check out fundamentally. Also, if I'm not comfortable holding a stock through a 30-50% decline, I simply won't buy it.
I am a focus investor, I don't believe in individual stock diversification. I buy a select few stocks that I believe will drastically outperform the market. Diversifying is what index funds and etf's are for (I hold those too).
So, I won't buy something I'm so-so on or something just for the dividend. If I can't find a compelling stock but I think it's a good time to buy (the market), I'll just buy an index. When I find those few stocks a year though, that can outperform, I buy big and hope for the best.