I may make you groan in a minute. But stay with me. By the end of this article, I will give you five stock picks that I've personally invested in.

The background
I recently visited our U.K. office with Motley Fool co-founder Tom Gardner and a couple other Fools. While there, I met with the investor relations folks at education powerhouse Pearson and alcohol giant Diageo.

But it wasn't all work. Tom and I played some low-stakes Texas hold 'em poker at one of the local casinos.

In a future column, I'll give you the scoop on Pearson and Diageo (preview: both were quite impressive), but (here's where the groaning may come in) today's five lessons come from the poker table.

I realize you may not share my love of poker, and I realize comparing poker and investing is a well-trodden road, so I'll keep my lessons brief and provide a stock pick for each lesson.

Investment lesson No. 1: Pick the easy battles
At the poker table it's fun to match your skills against the better players; but if money's a bigger priority than ego, the best strategy is to focus on getting into hands against the worst players. Why? Because the level of difficulty there is lower.

We sometimes pick overly tough battles as investors, too. It can be tempting to go contrary on the company short-sellers hate, or to try predicting the next biotech to be acquired, or to search for the crazy-high-yield REIT that actually can keep up its dividend payments. The degree of difficulty on these plays is high, so you must demand great odds -- much greater odds than if you stick to easier plays. I use Altria (NYSE: MO) and Wal-Mart (NYSE: WMT) as my baseline. If the risk-reward on the "hard" stocks isn't better than on these two efficiently operated powerhouses, why buy them?

The stock pick: ExxonMobil (NYSE: XOM). It's the Altria/Wal-Mart of energy -- the biggest and baddest of Big Oil. Despite the alternative energy hype, petroleum-based energy isn't becoming obsolete anytime soon. I bought in around $65 a share. It's now around $70 a share, but it's still trading at a reasonable price. Well worth looking into.

Investment lesson No. 2: Don't underestimate the market
Even if you've correctly identified the worst players, you can lose a lot of money. Especially if you get cocky and underestimate them. To extend the analogy to the stock market, you can still lose money by buying the Altrias and Wal-Marts of the world. Make sure to get in at a good price. And don't buy and forget -- buy and monitor.

Also remember the old poker adage: If you're looking around the poker table and don't see the chump, it's probably you. Read on for a combined stock pick with lesson No. 3.

Investment lesson No. 3: Know your weaknesses
Tom Gardner had my favorite insight of the trip. After a session in which he was slightly ahead and I was down (because of failing to follow lesson No. 4), he shared his strategy. "When you don't play often, the best strategy is to be patient, play tight, and fold a lot of hands."


Except for a one-hand lapse, I used the same strategy myself. We both knew we weren't the best players at the table. Other folks we were playing against spent hours upon hours honing their craft. Perhaps mastering it. If this was investing -- a craft we do obsess on -- we would have been comfortable making bolder moves. But we're casual players, so we stuck to conservative strategies.

For those who don't have the time, inclination, or ability to take on the market, the conservative strategy is investing in index exchange-traded funds and mutual funds. I'll go further. I believe indexes should form the core of almost every portfolio -- from the portfolios of the chumps to the portfolios of the sharks.

The stock pick: Vanguard Total Stock Market ETF (NYSE: VTI). This is one of the buy-and-hold ETFs that anchor my portfolio, freeing me up to be bolder in some of my individual stock purchases. As Morningstar puts it, this ETF "covers the entire U.S. stock market for a rock-bottom cost of 0.07% a year, and it provides investors with an excellent choice for a core equity holding."

Investment lesson No. 4: Never overplay ace-king
There was a sign in the poker room that read: "Never overplay ace-king." For background, the fourth-best starting hand in all of poker is ace-king of the same suit (behind ace-ace, king-king, and queen-queen). However, players get into trouble by overvaluing it. In fact, my biggest losing hand on the trip was because I over-aggressively played ace-king.

In investing, the lesson is to diversify. We should guard against getting cocky and putting too much money behind the latest amazing investment we've unearthed. It may be a great stock, but the unanticipated always happens. See BP.

The stock picks: Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM). Both of these banks are a bit of a gamble, but at today's prices I think there's a very attractive risk-reward opportunity for contrarians. Just don't overplay this hand!

Investment lesson No. 5: There are very few great opportunities. Be patient. Wait for your hand.
A surprising aspect of poker is that a whole day of playing usually rests on the outcome of just two or three hands. Like fishing, poker's a whole lot of waiting.

Bad players jump into tons of hands and make bets indiscriminately. Bad investors jump into tons of stocks, buying and selling indiscriminately. Action doesn't necessarily translate into returns. In fact, it's frequently the opposite. Wait for the great opportunities.

The stock pick: Cisco (Nasdaq: CSCO). Some weakness in its government business sent investors fleeing from Cisco stock. The overreaction sent Cisco stock down 20% since Nov. 10 in a relatively flat market.

After backing out its enormous net cash balance, that means Cisco trades at just 9.4 times its trailing free cash flow . For a company that routinely cranks out net margins and returns on equity of around 20%, that looks to me like a great opportunity.

I've got my own money behind Cisco (and the other four stocks I've mentioned). Meanwhile, my fellow analysts and I have picked an additional five stocks for The Motley Fool's account. To explain our investment theses, we created a special report that you can download for free. To get instant access, click here -- it's free.