Peter Lynch was famous for advocating looking in your own back yard for investment possibilities. The value of that advice was brought home to me as I realized that once a week for several years, I had walked past the offices of a company that never registered in my brain even though it always appeared to be a bustling place. And during that time, Cognizant Technologies (NASDAQ:CTSH) rose 600% to more than $35 a share, where it sits today.

Of course, not every busy backyard venture will be a profitable seven-bagger investment. You may be standing in line each morning to get a hot glazed doughnut from Krispy Kreme (NYSE:KKD) and thought your double from $20 to $40 would be just as sweet, only to have your investment end up as a stale, gloppy mess.

But looking close to home flagged up another company that I don't intend to overlook. During those same years I was passing by Cognizant, I was also passing up Eisai Inc. (OTC BB: ESALY), a Japanese medical research company. Normally I don't recommend investing in the "pink sheets" since scam artists thrive in those pages, but many times you'll find American Depository Receipts (ADRs) of real foreign companies trading there, and sometimes they're worth a closer look. For example, Motley Fool Stock Advisor pick BMW (OTC BB: BYMOF) can be found in the pinks.

Eisai is at the forefront of the fight against Alzheimer's. Its premier product, Aricept, is used by more than 1.7 million people in the U.S. to improve cognitive function and behavior from the debilitating disease, and it is the most prescribed treatment for the disease in the world. There's no cure for Alzheimer's, so improving day-to-day living conditions is seen as a valuable method of treatment. Distributed through Pfizer (NYSE:PFE), worldwide revenues reached $254 million in 2003.

Another area it's working on that is close to my heart (quite literally) is the treatment for acid reflux disease, which is also known as heartburn. The company manufacturers a proton pump inhibitor, Aciphex, which suppresses acid production in the cells of the stomach lining. It faces stiff competition in this area from AstraZeneca's (NYSE:AZN) purple pill Nexium, the leading proton pump inhibitor. Other products include anti-seizure drugs Celebryx and Zonegran for the treatment of epilepsy, which are distributed through Pfizer.

Eisai has rapidly moved up the rankings of pharmaceutical companies in terms of revenues, from 44 to 23, with more than $2.5 billion in sales. The banners lining the corridors proclaiming each new sales milestone as well as the extensive remodeling of its offices should have been a clue something big was happening here. With a strong balance sheet sporting more than $1.6 billion in cash and some paltry debt of just more than $7 million, it is well-positioned to take advantage of opportunities as they arise, whether in future drug development or through acquisition of rights to other drugs.

Which brings up yet another investing lesson: Always keep some powder dry yourself. Keeping some cash in reserve allows you the opportunity to exploit investments that arise at a moment's notice. While it's rare that you must buy any stock rightthisminute, having funds ready for when you want to invest is key. It would be nice if I could remember that investing lesson as well.

With all the investment lessons Fool contributor Rich Duprey forgets, it's a wonder he hasn't needed Aricept treatment himself. He does not own any of the stocks mentioned in this article.