Like anything else, it begins with oral hygiene.

Please forgive me for the world's most boring introduction. It has a point, I promise.

So I'm unloading groceries this weekend, and I go to put away a tube of toothpaste. (Just stay with me.)

There on the box is one of those splashy starburst graphics, the ones they use to draw your attention to some great product improvement. In the split-second before this hygienic breakthrough registers with my brain, my imagination reels. Will I have even whiter teeth? Breath so fresh it will make the aroma of a Minnesota pine seem like smog from Gary, Ind.? Could I handle that much improvement in one mouthful of "micro-active foaming action" and "whitening mint experience"?

Here's what was actually new about this toothpaste: "New Packaging!"

I kid you not.

What does this have to do with investing? Plenty, because the slicksters out there don't contain themselves to marketing toothpaste. They work in the stock field, too, and some of them are trying to sell you decades-old dreams, repackaged as "New and Improved." You're most likely to find them wherever fear, greed, and ignorance get together for lunch. These days, the fields of nanotech, alternative energy, gold, telecommunications, and homeland security are full of companies promising the future but delivering the same stale results of the past.

Learning to recognize "New and Improved"
It's not too tough to spot them. Copious press releases in the absence of profits, as from a company such as Altair Nanotechnologies, are one strong indication that what's being sold ain't the company's product, but a stock.

Post-Katrina, it was so-called energy plays. An upstart fuel cell firm called Hoku Scientific (NASDAQ:HOKU) offered a great way to buy yourself a lot more bun than burger. It's down 65% since last September. Now it's getting into solar. Solar! An industry already overrun by new capacity and under the thumb of major energy players like BP (NYSE:BP). Capstone Turbine, another company that was hyped by Cramer back then, has lost more than 70% since November.

Fuel cells have been around for more than a century, and the biz is nowhere near profitable. Even if it were, why would anyone think upstarts could beat established materials players like 3M (NYSE:MMM)? Same deal with turbines. You think GE (NYSE:GE) wouldn't be all over that business if it had a future? You really think Capstone's got something GE doesn't?

Well, perhaps it does: legions of snookered investors.

Beware the cash eaters
Why would people keep promising investors New and Improved when what they've really got is old and unprofitable? The usual reason is that New and Improved isn't profitable, and it hasn't been for some time. Therefore, those who produce New and Improved are under a constant need to raise capital, and there are few better ways to do that than to issue press releases -- and then to issue stock.

Here's the tragedy: Contrary to what the growth-chasers out there will have you believe, you don't have to invest in New and Improved in order to get triple-digit returns. In fact, since so much of New and Improved doesn't work out, a lifetime of betting the bad odds will guarantee your savings are not improved.

Boring is better
Want big returns? Master investors like Warren Buffett have proved that boring, underappreciated, and profitable companies can put you way ahead of the market with far less risk. In the past 52 weeks, you could have made double-digit gains by purchasing old-school companies like big mother trucker Caterpillar (NYSE:CAT) or aging but profitable teentailer Abercrombie & Fitch (NYSE:ANF). Then there was $6 billion health-care firm Omnicare (NYSE:OCR), which delivered 100% returns to subscribers of Inside Value.

Being an investor means investing. In other words, buying something for less than it's worth and waiting for the market to realize what you've seen before anybody else. It does not mean hoping the hypemeisters' New and Improved lives up to its billing.

Fool value guru Philip Durell and his team focus on old, proven, profitable, and nicely priced stocks. That's why 3M is a current recommendation. You can view all of the team's research and stock recommendations with a free trial for 30 days. Click here for more information.

This article was originally published Jan. 27, 2006. It has been updated.

Seth Jayson wonders if fuel cell investors know how old those fuel cell promises are. At the time of publication, Seth owned shares of 3M but had no position in any other company mentioned here. View his stock holdings and Fool profile here. See what he's Digging these days. Fool rules are here.