As an Investor It Often Pays to Zig While Others Zag

I'm not a big fan of buying lottery tickets. To be honest with you, I just don't like the odds, as your chance of hitting the big-time in a lottery is somewhere around 1 in a gazillion.

However, throwing money at a few stock tickers seems much more reasonable, since the chance of finding a thousand percent gainer is much, much better. In fact, doing some quick math, I calculate the odds of finding the next Cisco CSCO or Intel INTC to be roughly 1 in 3,900—the current number of companies listed in the NASDAQ. Sure beats 1 in a gazillion, doesn't it?

Why is finding the next Cisco or Intel important? I'll tell you why: they can turn ordinary investors into extraordinary wealthy investors if you get in early enough!
It's not easy, but you can find good candidates if you focus on high-quality stocks that possess the key attributes necessary to deliver these types of returns. In addition, you can further improve your odds by diversifying your wealth into multiple high-quality companies from different sectors.

Many investors first search for companies that have the characteristics they desire and then worry about the company's products and services. However, focusing first on newer promising technologies and emerging markets and then searching for high-quality companies focused in those areas can be an extremely effective way to generate stellar long-term returns.

With that, let's go find the next big thing and potentially the next umpteen thousand percent gainer.

Where, oh where shall we look? Wireless, of course. Cell phones, PDAs, the Internet; wireless is virtually everywhere and is still flexing its muscles and moving rapidly into new niches. But if we want to maximize our gains, let's take a stroll off the beaten path and go where no man has gone before—ZigBee.

Never heard of ZigBee? Well, that's actually a very good thing for you, because if you haven't, it's also likely many others haven't. I've done extensive research on this new technology, and I can tell you firsthand that many on Wall Street have yet to discover ZigBee.

Here's a quick test. When did you first hear about Bluetooth? How many years did it take from development to becoming a household name?

The answer: The Swedish company Ericsson initiated the Bluetooth technology movement in 1994, and Bluetooth was officially named in 1998. However, through many early struggles and tech improvements, it wasn't until the mid-2000s that Bluetooth finally became a household name. Pretty amazing!

The point is, Wall Street had no idea of Bluetooth's capabilities or potential revenues until years after its development.

The Next Big Thing!

If you thought the Internet was big, well, all I can say is, you ain't seen nothin' yet. The next big thing is being called the "Internet of things," where chips can talk to other chips, which can then talk back to that chip or talk to other multiple chips; and all of these chips are then capable of relaying (routing) information countless miles efficiently using very little energy (batteries last years).

This process is termed "ZigBee," and the bottom line is that these smart chips will be used everywhere: in cell phones to buy things or pass through tolls while driving at full speed; on an oil pipeline or utility meter to transmit information concerning power outages or fluxes in pressure to a terminal miles away; and in homes, hospitals, malls, and industry for the automated monitoring of climate, security, patients, and power usage. Needless to say, there are hundreds of other examples.

I started researching ZigBee back in 2003, and finally this year ZigBee products are coming to various markets. RF Monolithics RFMI a leader in machine-to-machine (M2M) wireless communications, recently announced a ZigBee contract win with QinetiQ. Itron's ITRI OpenWay ZigBee–enabled smart meters are being deployed by major utility companies across the United States.

But it doesn't stop there.

The ZigBee alliance, a consortium of companies focused on bringing ZigBee to the marketplace, now has hundreds of members, and the list is rapidly growing. With every conceivable industry expecting to use ZigBee, the market is huge, and many big players are wanting a piece of the pie—companies like Texas Instruments, Atmel, Motorola, Phillips, Freescale, Samsung, Siemens, Emerson, STMicroelectronics, Honeywell, and on and on.

Sometimes in life you need to zig instead of zag. While everyone else is focused on the Middle East crisis, I'm looking for the next big thing, and I think ZigBee could just be it. The only question now is, which high-quality companies should I buy?