Why Would You Buy These 7 Stocks?

Numbers never tell the whole story. Following your investments (or selecting them) based on nothing but earnings figures and revenue trends probably won't get you in much trouble, because it's the safe way to go. But you'll miss lots of juicy opportunities that way.

Lead by example
Let’s take a look at what this means. Sticking to companies with proven financial stability and business success is likely to preserve your wealth and maybe net some nice dividends along the way. That's great, and we have a Foolish service for investors of that ilk. But it's not the only style, and for good reason.

Sneak a peek at this portfolio, if you will:

Twelve-month trailing values in millions of dollars. CAGR percentages courtesy of Capital IQ, a division of Standard & Poor's.

Google and Intuitive Surgical are two high-growth companies, while the others fall somewhere in between.

Wait a minute -- we just said we’re happy to own Universal and Elan, which don't even make a profit. Not to mention, Elan must be ridiculously overvalued after a run like that based on empty coffers. You're probably thinking we’re nuts, right? What gives?

The common denominator
All of these real-money stock picks have one thing in common: We did not like them because their numbers looked so great. Sure, search giant Google and Internet traffic-slinger Akamai have both the profits and the growth to impress, but that was never their raison d'etre. Here's the play-by-play:

• Akamai makes money when the global thirst for Internet bandwidth and Web server capacity exceeds the available supply. Given the sudden popularity of high-bandwidth applications like online video and Web 2.0 technologies, we believe that Akamai will make a mint for at least the next five years.
• Buffalo isn't the fastest-growing restaurant chain out there, nor the biggest or the most profitable. But that's exactly the point. A stellar management team has thought long and hard about how to expand without hurting the brand or the business in the long run, and that plan is chugging along exactly to spec.
• Internet search and online advertising can't keep Google growing at this breakneck pace forever -- but it doesn't need to. The company is applying the lessons learned online to traditional media like radio, TV, and print advertising, and Google will claim a bigger slice of our attention (and advertisers' money) in the years to come.
• We are holding Elan’s promising products in the company's pipeline as well.
• Intuitive Surgical simply doesn't have any real competition. It stands alone in a fortress of patent protection, providing unique health-care improvements at exactly the right time in history. If the big boys want what Intuitive Surgical's got, they pretty much have to buy the company.
• Universal Display does basic research for next-generation lighting and digital displays that may make the current LCDs, plasma screens, and even incandescent light bulbs obsolete within a decade or so. The commercial applications are just now starting to show up in stores.
• Netflix revolutionized movie rentals 10 years ago on the back of the new DVD format. Now that we're about to shift into the downloading era, Netflix is once again in the vanguard and could very well rewind and replay that success story on a grander scale.

This is what you get
Notice how the rationales above are devoid of math and financial metrics. To our thinking, all of these companies are in a developmental stage that falls outside the traditional rules of valuation and dependable profits. Let them fulfill their respective promises (or die trying). We’re in no hurry to see results -- that comes later, when the kids are all grown up.

With a truly long-term investing horizon, we believe this is the secret to making money in the stock market: Know the real story. Don't talk in maths.

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