On Feb. 28, 2006, history was made in Litigation Land. Anna Nicole Smith had her day in court.

And not just any court, mind you, but the Highest Court in the Land. On the pretext of resolving a dispute among subordinate U.S. Circuit Courts, the eight Men (and one Woman) in Black agreed to hear oral arguments (no tittering, please) from Ms. Smith's lawyers. The crux of the dispute: whether state or federal courts are best situated to decide probate disputes.

Boring, you say? Well, yes. You have a point. So let's suspend judgment on the questions of Constitutional law. Let's skip right past the merits of Ms. Smith's argument that her late husband intended to leave her $400 million and change, and simply forgot to jot this down in his will.

Instead, let's assume that Ms. Smith is right on the law, and right on the facts, and that the Supremes reinstate the $475 million award granted to her by a federal court in 2001. Or at least the $88.5 million that the first judgment was later reduced to. That's still quite a chunk of change. The more interesting (and Foolish) question then becomes: What to do with the loot?

Stock market guru Peter Lynch suggests that investors narrow down their investment choices by conducting what he calls a "two-minute drill" -- a short summary of why they think a stock might be worth owning. He also suggests that individual investors, like Ms. Smith and us, stick to buying stocks within our sphere of competence. Putting these two ideas into practice, I've taken the liberty of selecting a few companies that Ms. Smith likely knows, and preparing two-minute drills on each. Read on (and hey, smile -- it's all in fun).

Playboy (NYSE:PLA)
From a buy-what-you know point-of-view, this one's a no-brainer. In fact, Ms. Smith may already have some Playboy in her portfolio. Back in 1992, stock options weren't yet the hot ticket they've since become, but I suspect that if Playboy offered them to its 1993 Playmate of the Year, she wouldn't have said no.

Is Playboy a great stock? With her intimate knowledge of the company, Ms. Smith is a far better judge than I. But from an outsider's perspective, it looks interesting. Although the company has been unprofitable in five of the last six years, it does look promising from a free cash flow perspective. Playboy generated $34.3 million in free cash flow over the last 12 months, giving it a price-to-free cash flow ratio of just 13.4.

With analyst expectations of 15% earnings growth per annum over the next five years, and 20%-25% growth in 2006 alone, Playboy's stock could grow quick like a bunny.

Rio Tinto (NYSE:RTP)
In the interests of satire, I was all set to make Harmony Gold Mining (NYSE:HMY) my second pick. A name like that just cries out for a spot in Ms. Smith's portfolio. But after reviewing that company's financials, I have to admit that investing in an unprofitable, free cash flow-negative, sixth-largest operator of gold mines probably wouldn't make for the most prudent use of Ms. Smith's capital.

Then again, who am I to teach an expert? Ms. Smith surely knows how difficult gold-digging can be, and that the more diversified enterprise Rio Tinto offers a better valuation proposition. Rio doesn't confine itself to gold, but also digs up copper, diamonds, and iron ore, among other minerals. Its lack of a gold fixation has helped to divert gold bugs from its shares, which currently trade at an ultra-low seven times trailing free cash flow and a price-to-earnings ratio of 12. With the company projected to grow its profits at 11.5% per annum in the long term, this one's a keeper.

Mentor (NYSE:MNT)
I know this one will surprise you. When it comes to breast implants, Inamed (NASDAQ:IMDC) and its 24% projected growth play the blonde to Mentor's brunette. Perhaps, given her knowledge of the industry -- and I'm referring to the entertainment industry, of course -- Ms. Smith knows some reason why Inamed is the better company of the two.

But from this Fool's perspective, Mentor's got a much better set of financials. Sure, it's only expected to grow earnings at 17% over the next five years. But with nearly $100 million in free cash flow and a market cap of just $1.9 billion, its price-to-free cash flow ratio is slightly more than half that of Inamed. Moreover, gentlemen prefer dividends, and Mentor pays its shareholders a respectable 1.7%; Inamed pays nothing.

Manor Care (NYSE:HCR)
Have we cleared the shelves at the Double Entendre Depot yet? No? Then I'll offer just two more. When investing in a company, it's a good idea to get a firsthand look at the business when possible. Try on some khakis, then buy some Gap. Remodel the kitchen, then buy stock in Lowe's. In other words, invest where you shop.

In Ms. Smith's case, my first inclination was to suggest Sunrise Senior Living (NYSE:SRZ). But that may be a bit downmarket for her tastes. Besides, the company is free cash flow-negative and sports a P/E more than twice as high as its growth rate.

A name more suited to the style of life to which she has become accustomed might be Manor Care. At first glance, the company's price tag looks as rich as its moniker. Even a 20 P/E is no bargain when a stock is only expected to grow 15% a year. But a closer look at Manor Care's books reveals that its cash flows much more strongly than GAAP permits it to report. With $214 million in free cash flow and just a $3.3 billion market cap, Manor Care trades for slightly more than 15 times free cash flow. At those prices, even a paltry $88.5 million can go a long way.

Foolish takeaway
All kidding aside, there's a grain of truth in each of the above. In the 13 years that he presided over Fidelity's Magellan Fund, Peter Lynch demonstrated that buying stocks whose products you already know can be incredibly rewarding. His investments in household names like Pep Boys and General Mills helped make him one of Wall Street's most successful fund managers, racking up compound annual winnings of 29.2% for his clients.

But this philosophy isn't just for Wall Street honchos. Here at The Motley Fool, former English major David Gardner has ridden it to riches as well. An avid video gamer, David's investments in companies like Activision, Electronic Arts, and GameStop have helped our Motley Fool Stock Advisor portfolio trounce the S&P 500 over the past few years. Overall, his picks have doubled the stock market's returns since April 2002 -- and his brother, Tom, who also likes to "buy what he knows," has tripled it.

David's done it. Tom's done it. Anna Nicole can do it -- and you can, too. If you're ready to start beating the pants off the S&P 500, a free subscription to Stock Advisor is the best way to start. You can try it out for a whole month without being charged a dime, just by clicking here. And if you don't like it? No worries. Cancel any time, no strings attached. You have our word on it.

Fool contributor Rich Smith , who owns none of the stocks named above, is also of no relation to Anna Nicole Smith. Even if he were, chances are he'd have been disowned by the time you reached this point in the column. Gap is both a Stock Advisor pick and an Inside Value pick. The Motley Fool's disclosure policy is golden. Can you can dig it?