It's not everyday that someone advocates buying a stock after it has quintupled in just two year's time. I understand where that sentiment might come from, but if you don't buy a stock just because it's gone on a good run lately, you're falling victim to one of the worst cognitive biases in the investing world: price anchoring.

Case in point for today: Ctrip.com (NASDAQ:CTRP) -- home to China's largest on-line travel portal. The company's stock has risen 407% since August 2012. But that isn't going to stop me from buying shares as soon as Motley Fool trading rules allow. Read below to see why Ctrip is the next company to join this portfolio.

The Middle Kingdom's enormous potential
When we start talking about the potential for capturing market share in China, it can be difficult to fully appreciate the magnitude of what's going on there.

Everyone knows that China is the most populous country in the world, but other half of the story is the emerging middle class and the steady increase in Internet penetration among the nation's citizens.

I find that this is the best way to visualize this potential is through the following charts.

Screen Shot

That red area (non-Internet users) in China is bigger than the combined yellow areas in America and the European Union. As more and more Chinese Internet users come on-line, and as more and more of them use their newly found disposable income on travel, Ctrip could see its revenues soar.

Of course, that kind of transition doesn't happen overnight, and Chinese Internet penetration may never get near the 87% figure the United States enjoys right now. But the trend toward a connected China is undeniable.

Screen Shot

Capitalizing on the opportunity
But changing demographics mean little to investors if they can't find a company that's taking full advantage of the opportunity. In Ctrip, I believe I've found a company that fits the bill.

The company's goal is audacious, but also well within its reach: to be the one-stop shop for all of the travel needs of China's citizens. As is the case with it's Euro-American counterpart, Priceline (NASDAQ:PCLN), that means dominating both the hotel and airfare scene. But Ctrip isn't stopping there: it wants to be the most reliable place for consumers to go for train, bus, group travel reservations, and even visa applications for travel abroad.

The bus, train, and group travel segments are just getting off the ground in China, but the more mature segments are booming: the company was able to increase its volume of airfare reservations by a whopping 83% during the second quarter of this year, and the volume of hotel reservations increased 64%.

Those are absolutely scorching numbers and are indicative of a company that is capitalizing on a golden opportunity.

A seamless mobile travel platform is probably the most important aspect of Ctrip's approach to online travel dominance. Unlike U.S. Internet users -- who came of age in the era of the desktop computer -- the majority of Chinese Internet users are using mobile devices.

A lot of money is being poured into mobile, infrastructure build out, and marketing right now -- which reduces profitability in the short term -- but those efforts seem to be paying off. As of June 30, 200 million users had downloaded Ctrip's mobile app, which was up 60% since the same time last year.

When  to worry
As with any investment, it's important to figure out what would make you want to sell an investment, too. Ctrip has an expensive stock, trading at 54 times expected 2015 earnings. That means that it will be prone to large swings in its stock price, and knowing what to focus on will be crucial.

The biggest threat to the company comes from competition: Qunar (NASDAQ:QUNR), a spin-off of Chinese search giant Baidu (NASDAQ:BIDU), and eLong (NASDAQ:LONG). Both of these companies are fighting for slices of the growing pie that is Chinese online travel.

A price war is already well under way, and that reduces profitability for everyone involved. As things currently sit, Ctrip is in a good position to win the war: it has cash and reserves totaling $1.56 billion. Qunar and eLong have $213 million and $300 million, respectively, sitting in the bank.

Price wars are never fun, but if Ctrip executes its plan, it should be able to capture an enormous share of the Chinese online travel market. If, at any point, the volume of bookings falls significantly -- and the competition seems to be capturing a larger share -- it would be the biggest red flag causing me to sell.

Brian Stoffel owns shares of Apple, Baidu, Google (A shares), and Google (C shares). The Motley Fool recommends Apple, Baidu, Ctrip.com International, Google (A shares), Google (C shares), Netflix, and Priceline Group. The Motley Fool owns shares of Apple, Baidu, Google (A shares), Google (C shares), Netflix, and Priceline Group. 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.