The famous stock investor, Peter Lynch, said to “buy what you know”. The Wall Street Journal ran an interesting article about that with some of the pros and cons. The article was aimed more at consumer companies and their stock but it can relate to a broader range than that.

One fund manager in the article realized that his teenage daughter loved a retail jewelry company. Before he could invest, the company filed for bankruptcy and closed all their stores due to on-line competitors. Moral: be very cautious when investing in any teenagers’ fascination of the moment.

Another investor found a number of West Elm and Williams Sonoma catalogs and boxes that his wife had ordered being delivered to his new house. He bought the stock which proved to be a timely investment over the last couple of years. Moral: wives know things their husbands do not!

This brings me to my wife, Tricia. She has her own investment account. When we meet with our financial advisor all of her stocks are up from when she bought them. My stocks are, well, varied might be a good word.

But it may be useful to look into this in a little more detail and see what and why Tricia invests in various companies.

Tricia bought the stock where her brother works, Honeywell, a few years ago and it has more than doubled! But J.C. Penny, where her sister worked, went south when the guy from Apple joined and tried to change the place. (To be fair, her sister retired about then and Tricia told me to sell but I was slow!)

Her stocks also include retailers that she buys from like Under Armour, Urban Outfitters and William Sonoma, mentioned above. All have made money. She also owns two restaurant groups that we and our friends frequent, Panera Bread and Blooming Brands which owns Outback, Bonefish and Flemings . These have also at least doubled in value.

But her investment grand slam was buying Apple stock. She insisted on this after first buying an early G4 laptop for herself on Valentine’s Day in 2002. At the time, everyone, from our financial advisor, to our Banker,  to me strongly suggested she Not buy this small, second level company. Well, you know the rest. Moral: for business and life stories listen to me, for stocks ask my wife.

The overall message here is that I have learned that buying what you know or what you like can be a great strategy or, better yet, a great part of your overall investment strategy. I have also been around long enough to add that Buying things is often the easy and fun part. Selling things and knowing when to sell is a lot harder to do. This is true of stocks, companies or even collectibles. So, like with most things in life or business, think about it before you do it!