Wall Street's Rules: Breaking Them and Winning: Part 1

NEW YORK (TheStreet) -- If you are an investor in today's market and don't find yourself in a state of perpetual worry, then you are not paying attention.

I say this because I am now seeing evidence that we have entered an environment where it is acceptable for stocks to trade on a basis that is not predicated on a company's fundamentals alone. Examples include Facebook (FB) and Salesforce.com (CRM). This serves to remind investors that the rules are changing. If not, they are certainly being made up as we go along.

In these situations I have found that it is often best to appreciate that investing is like your favorite sport. As such it requires exceptional conditioning not only of the body, but also of the mind, as you would expect from your favorite athlete.

But also as in any sporting event, the best athletes or the ones who often come out on top are those who know the rules. Notice I didn't write "play by the rules." What these means is that understanding your environment is as equally as important as understanding your body and how much punishment and stress it can absorb.

As in sports, today's winners can easily be tomorrow's has-beens, with the only difference being the change in weather. Research in Motion (RIMM) is the perfect example. When enterprises were soaring, RIM was a great investment play.

Today, however, consumer interests dominate device sales, which makes consumer-focused companies such as Apple (AAPL) and Google (GOOG) kings of the hill.

As a result, what we are also noticing is a changing of the guard where once-dominant enterprise players such as Microsoft (MSFT) have started to shift its attention to a model that allows it to better control customer engagement -- a strategy which I think is brilliant, though it is much to the dismay of its partners.

Be that as it may, just as it is within Microsoft's right to adjust, It is also the investor's right to adjust his or her own expectations. In essence, since there has been a fundamental change in a company's model or strategy, as such it justifies a change in investor expectations. This is something I've recently highlighted in my article These Stocks Will Make Me 'Rich' in 6 Months, where the idea is that investors should constantly re-evaluate their positions to ensure their objectives are still being met and are not falling victim to unexpected market shifts as being witnessed by Research in Motion.

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