Peter Lynch is famous for telling individual investors to "buy what you know." He explains that it isn't as simple as saying, "I eat at McDonald's (NYSE:MCD) every day; therefore, I'm going to buy the stock." Rather, if you traveled the country in the '60s and you noticed the Golden Arches popping up all over, it would have been very profitable to research Ray Kroc's new fast food chain. So, that's the idea: Pay attention to the world around you, and when you see something new or hear some unusual news, get to the bottom of the story. There is likely a fortune sitting right under your nose.

Last August, I described my sorrow at missing a 30-bagger in Tesoro (NYSE:TSO). It wasn't just that I was working at one of its refineries when the stock was less than $2 a share, but what happened afterward. Through 2004, everyone I knew in the refining business was discussing how the crack spread (the price difference between crude oil and refined products) was hitting record levels. Yet I never bought Tesoro, Valero (NYSE:VLO), or Marathon Oil (NYSE:MRO). Had I purchased at the beginning of 2005, when it was clear that refining was a good business again, my returns could have been:

2005 percentage returns
TSO VLO MRO
95 140 70

Not bad in a year when the major indexes were flat.

Unfortunately, I do stuff like this all the time. I recently wrote about the good times on the Iron Range. In 2003, my father told me that Eveleth Taconite would be reopened. (Incidentally, this is the mine that was featured in the recent movie North Country.) Now, this was big news. It was the first time I could remember in my life that investors had purchased a mine and resumed production. At the time, I thought it was a great thing for the workers and families on the Range, and left it at that.

Had I looked into the issue further, I would have found out that the mine was being run with a 70% interest from Cleveland Cliffs (NYSE:CLF) and a 30% interest from the LaiwuSteel Group from China. Looking deeper into the story, I would have found that Cleveland Cliffs was consolidating North American ore production and buying premium properties on the cheap. In 2004, Cleveland Cliffs turned the corner on profits, Chinese demand for raw materials drove prices for iron ore to new high prices for the first time in decades, and the stock followed. Furthermore, knowing that the market for iron ore had improved would have led me to Rio Tinto (NYSE:RTP) and CRVD (NYSE:RIO). The 2005 gains I missed:

2005 percentage returns
CLF RTP RIO
70 55 52

My point is not to lament the opportunities I've missed but, rather, to remind myself that even within the mundane industries that I am familiar with, opportunity is available. Maybe iron mines and refineries are not as sexy as iPods and soy-skim lattes, but there is no reason the stocks cannot build wealth.

Therefore, my New Year's resolution is to pay attention to the news. When I hear something out of the ordinary or something that challenges my view of the world, I am going to dig until I get to the bottom of the story. Just like fellow Minnesotan Mary Richards (aka Mary Tyler Moore), I might just make it after all.

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Robert Aronen owns no shares of any company mentioned and has another New Year's resolution to lose 10 pounds. The Motley Fool is investors writing for investors. Please feel free to share your comments with him at [email protected].