Two roads diverged in a wood, and I --
I took the one less traveled by,
And that has made all the difference. -- Robert Frost

In investing, as in life, the choices you don't make can often be as important as those you do.

Just ask David Sokol. He runs MidAmerican Energy for Warren Buffett's Berkshire Hathaway (NYSE:BRK-B), and he's been rumored as a possible successor to the Oracle of Omaha's throne. In his new book on business, Pleased, but Not Satisifed, Sokol writes:

We [MidAmerican] have made 18 acquisitions in the past 12 years, ranging from several million dollars to nearly $10 billion. In virtually every case, we have met or exceeded or initial expectations of value. ... Equally important is that we have chosen not to pursue more than 115 potential acquisitions during that same time frame because they did not appear to us, after evaluation, to represent a value-enhancing opportunity.

Frost was right
Unlike Sokol, many CEOs today seem all too eager to acquire other companies, if only to serve as feathers in their caps. Many of those mergers don't quite turn out as well as their architects expected -- think of Time Warner's (NYSE:TWX) merger with AOL (NYSE:AOL), for example, or of Rite Aid's (NYSE:RAD) deal to devour Eckerd. Sometimes, the timing turns out to be terrible, as with Mattel's (NYSE:MAT) 1999 buyout of The Learning Company, or Yahoo!'s (NASDAQ:YHOO) $5 billion-plus purchase of Broadcast.com the same year.

Out of 133 potential acquisitions, Sokol made just 18 -- a mere 14%. Has his caution paid off? According to Buffett's letters to shareholders, MidAmerican's net earnings totaled $416 million in 2003 and $1.85 billion only five years later, in 2008. That's a more-than-fourfold increase, or nearly 35% growth per year on average.

When pickiness pays off

Like Sokol, we Fools should be similarly selective with our own investments. Don't buy every stock that looks good, however tempting it may seem. Focus on your best ideas. If you're not discriminating, you can end up with a sea of so-so stocks that will suppress your portfolio's performance.

Even among your best ideas, you'll experience some disappointments. Why make it worse by investing in lesser ideas? By limiting your portfolio to the very best stocks you can find, you stand a greater chance of choosing the right road toward real riches.