Your concern is valid. You do want to invest in companies you understand, but you don't have to be an expert. (It helps, especially if you're looking for what P

Your concern is valid. You do want to invest in companies you understand, but you don't have to be an expert. (It helps, especially if you're looking for what Peter Lynch calls an edge.) I approach things from the other direction: I wrote my own stock screener that analyzes financial reports and suggests companies which might be dramatically undervalued at their current prices. If a few minutes of research on my own reveal that I don't understand the business or that the numbers are obviously skewed by something which jumps out (the company increased its free cash dramatically by taking out hundreds of millions of dollars of short term financing and that skews the return on invested cash numbers), then I look further. If I don't understand the company or the industry, or if it's a coinflip either way of being undervalued, I move on. As a concrete example, I have a pretty good idea of what Apple makes and where it can sell and where it might go in the future, but I don't believe it can keep up the 30% returns on invested cash rate for the next ten years. I don't buy it. Maybe I'm wrong in that case, but my backtests work even with eyeballing numbers.