Strategy, like the rudder on a ship, steers a company through high seas and calm waters alike. Is the business model profitable and growing? How much risk is the company willing to bear? Does the company have the resources -- financially, human, and otherwise -- to execute the strategy?

For investors, the answers to these questions will lead to a long-term darling in the market or to a likely dud. In the video below, Motley Fool contributor Jay Jenkins discusses the strategy behind risk and reward, and points to some case studies in recent history of winners (Blackstone Group (NYSE:BX)) and losers (Bank of America (NYSE:BAC)).

Fool contributor Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.