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With markets so complicated right now with respect to Europe's banking crisis, the U.S. monetary policy and global politics, it's understandable that investors are losing confidence in the markets. But macro-level complexity should not over shadow a basic truth in investing. Above all else, long-term stock price performance responds to growth in earnings. Apple (AAPL) has been a home run because it's minting money. AutoZone (AZO) has been a big success because it's minting money. A second truth is that less is more in investing; when fewer eyes are on a stock, the opportunity for price to value discrepancy is greater. By default, less attention is given to smaller cap issues.

The restaurant industry is often misunderstood. Because the U.S. has millions of restaurants, all restaurants are often categorized as unattractive low margin businesses with low barriers to entry. Indeed, one usually thinks of technology companies or other monopolistic type business when thinking about high margins and return on equity. Consider this math: spend about $800,000, generate an average of $2 million in sales and $550,000 in operating cash flow each year translating into a return on investment of nearly 60%. These numbers are not fiction; they are the unit economic model of each Chipotle (CMG) restaurant. Is it any surprise that shares have nearly tripled during the "recession"?...326 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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