Judged by readership, Jeff Fischer's recent column, "Understand What You Own," was a hit. For good reason. His advice was to spend at least several months studying a company and its business before buying, because he believes that "your level of understanding = your long-term investment performance." This should be the screen that greets you whenever you enter your discount broker's website. And the next should be this: No matter how much you study a business, be prepared to learn more and be surprised the longer you own it. Despite any amount of dating -- and you must date a stock before exchanging rings -- or commitment, you will find new knowledge. And that's a good thing.   

We've learned this truth here. Take four of the portfolio's holdings -- Amgen (Nasdaq: AMGN), Celera Genomics (NYSE: CRA), Human Genome Sciences (Nasdaq: HGSI), and Millennium Pharmaceuticals (Nasdaq: MLNM). When we bought Amgen, we identified it as a power in the biotechnology industry. But by the time we bought Celera Genomics a year later, we had learned that biotechnology wasn't an important, emerging industry, after all, but a technology. We had to rethink.

The key was not some amorphous concept of "biotech" itself (or "Internet" or "wireless"), but rather how this or that biotechnology could revolutionize health care. There we would find important, emerging industries. Amgen was a Rule Breaker because it perfected a new biotechnology -- recombinant DNA technology -- to create the new, enormously profitable drugs Epogen and Neupogen. It and Genentech (NYSE: DNA), the inventor of genetically-engineered human insulin, were the recombinant DNA pioneers, who leveraged that lead to perform the astonishing business feats of becoming full-scale drug companies in under two decades.

As David Gardner and the Breaker team began exploring other companies using biotechnology in amazing new ways, they encountered bioinformatics and Celera Genomics, as well as two leading companies using genomics advances to create fully-integrated drug making operations, Human Genome Sciences and Millennium Pharmaceuticals. The portfolio did not jump to buy them, waiting many months before purchasing Celera shares in December 1999, nine more months before buying Human Genome Sciences, and still another year before buying Millennium (and selling and rebuying Human Genome, by the way). During this time there was more study and -- something an individual investor doesn't usually face unless in an investment club -- debate. 

But the longer we own these companies, the more we learn about them, and it's not all because somehow their businesses are different than when we did our research before buying. Two major realizations: Turning all the new information about the human genome into improved health care, whether through drugs keyed more specifically to an individual's genes (pharmacogenomics) or advanced medical diagnostics, for example, is going to take a lot of time. One of the many parts of that is related to proteomics. Just when we thought the genome was the thing, it turns out that it's Legos compared to the extraordinary complexity of understanding all the proteins for which genes code.

(Off-Topic: Speaking of Legos, if you ever have a chance to go to Minneapolis's Mall of America -- or, during the holiday buying season, the Maul of America -- go. If for no other reason, to see the Lego store and displays. Space stations, dinosaurs, aerial unicylists, you name it.)

So learning more about any company is inevitable. No matter how much you know about a person or subject or job to which you devote yourself deeply, there is always more. You can never really know whether your marriage or partnership is a sure thing, whether you date for years, live together, whatever. You will always learn more, things will change. Ditto your investments.

It's about grokking, the neat idea of the Martian language in Robert Heinlein's classic science fiction novel, Stranger in a Strange Land. To grok literally meant "to drink" and as a metaphor meant "to be one with." An unidentified website defines it: "When you claim to 'grok' some knowledge or technique, you are asserting that you have not merely learned it in a detached instrumental way but that it has become part of you, part of your identity." I'm not suggesting that you have to be one with your investments to be a successful investor, but in the absence of working in a specific industry -- and often even with that -- you will probably first study an investment and gain a detached, instrumental understanding, and only over years become really close to it. 

Here's an example from my experience. Investigating drug makers and newer genomics-based drug companies like Human Genome Sciences and Millennium, I thought I had a handle on the drug development and approval process. With the help of many wonderful sourses, I even put together a series of articles for Fool.com on the whole shebang. After months of study, then investing in several drug makers, and then another year and a half, I finally read Barry Werth's 1994 study of Vertex Pharmaceuticals (Nasdaq: VRTX), The Billion-Dollar Molecule.

It was only then, after devouring hundreds of gripping pages of blood, sweat, and tears, of brains and souls and bank accounts pushed beyond human limits, that I saw how little I had really grokked about the extraordinary risk that is not only drug making, but applying all the advances biotechnology has given us to revolutionize the process. 

This is the challenge for Celera, Human Genome Sciences, and Millennium, and hundreds of other companies -- including some small-cap jewels profiled in our new Industry Focus 2002 and monthly in The Motley Fool Select. It was enough to make me think I should sell all my stocks that use biotechnology and get out entirely until I advanced farther to Grok Gulch. After calming down, I'm sticking with these investments for now. I have a greater sense of the risks, but nothing has changed their Rule Breaker potential returns, which is why I bought them. I just didn't grok them from day one, and probably won't completely on day 1000.    

On its simplest level, Jeff's admonition to understand your investments is to avoid the hot tip and dig deeper. But its more extraordinary implication is that no matter how much research you do, you will begin a long-term relationship in which you will only grok your investment in its fullness over time. Both the preparation for the investing relationship and then its endurance are essential, and unavoidable, for investing success. 

Have a most Foolish week! 

Tom Jacobs (TMF Tom9) thinks the TV show "Malcolm in the Middle" is astonishingly brilliant. He owns shares of Celera Genomics, Millennium Pharmaceuticals, and Vertex Pharmaceuticals. To see his stock holdings, view his profile, and check out The Motley Fool's disclosure policy.