How often does this happen?

It's last summer, and careful analysis tells you that Cree (NASDAQ:CREE) is a once-a-year buying opportunity at $12. Ditto for casino operator Lakes Entertainment (NASDAQ:LACO) -- which you noticed because it owns 80% of the World Poker Tour -- at around $8, or about half its book value. Unsure of your analysis, you decide to wait and see what happens.

The stocks climb. By December, Cree looks like it's worth holding at $17, though you wonder why it isn't higher. Lakes has a similar story at the beginning of January. Yet, realizing that you may be gambling by buying those stocks at $12 and $8, you are content with your decision to stay away.

Then a few days later, those stocks soar again to $20, leaving you saying, "Darn! I should have bought at $17!"

And then you do. The fear of "missing out" has overwhelmed your better judgment. You've strayed from your market-beating strategy of buying good -- if not great -- companies at great prices with a reasonable margin of safety.

Instead, you've gone "on tilt" -- the poker term for letting this aggravation control you, making you "gamble" instead of "invest" by playing weak hands (overpriced stocks) out of position, where you are likely to play at a severe disadvantage.

You might even distort reality or bend your own rules to convince yourself that these stocks fit your investment criteria. But continually making such "loose calls" (borderline decisions at best) will eat away at any advantage your previously sound investment strategy had over the market.

So, don't buy Cree at $20 simply because you thought it was cheap at $12.

You say you don't want to miss out on satellite radio stocks? Both XM Satellite Radio (NASDAQ:XMSR) and Sirius Satellite Radio (NASDAQ:SIRI) have experienced meteoric rises based on subscription growth -- essentially validations of their business models and potential.

Old Rule Breaker favorites such as eBay (NASDAQ:EBAY), Amazon.com (NASDAQ:AMZN), and Millennium Pharmaceuticals (Nadsaq: MLNM) have also delivered outsized returns over the past year.

But don't jump in with both fists just yet. You need to reevaluate these companies, their competitive advantages, and then determine whether their current share prices allow for the probability of sufficient returns on your investment -- with a reasonable margin of safety. If not, don't chase them. Simply look elsewhere or just wait for a better buying opportunity.

Jeff Hwang owns shares of Cree, Lakes Entertainment, and eBay. He can be reached at JHwang@fool.com.