May 24--PREDICTING the future is an impor- tant component of any investment decision.

Analyzing a company's current financial health relative to its stock price is always the starting point. But a company is not a static thing, so you must also try to figure out how bright a future it has. Ultimately that will determine its stock price going forward.

Unfortunately, nobody has a crystal ball, and usually things that happen in the future only seem obvious in retrospect (see, for example, the recent housing bust).

This is another reason why Warren Buffett's investment strategy -- targeting businesses that won't be drastically affected by changes in the future -- makes so much sense.

I thought of this after reading an article about Intel Corp. in a recent edition of Fortune magazine.

"Intel's Secret Plan" details the chip maker's efforts to create the dominant microprocessor for portable devices such as cell phones and other consumer electronics. That's become necessary as desktop sales slow.

It doesn't take a genius to see that cell phones will become more and more important going forward. Devices such as Apple's iPhone already practically replace the need for a computer, and it seems likely that trend will only accelerate.

Fortune's latest edition also includes an article about how companies are spending months creating iPhone applications. There already are 35,000 such applications available for purchase at the Apple App Store, and more come in every day.

It's therefore easy to see why Intel is focusing on developing the dominant chip for the iPhone, BlackBerry and other "smart phones" in addition to many other kinds of portable electronics. It's also easy to see that the stock price of the company that dominates the chip market for these devices will soar in the future.

But for investors, that's where the easy decisions end. What if a completely different device is created than what we have now? What if another company builds a better chip? Intel competitors Nvidia, Qualcomm and Texas Instruments already are trying to do just that, the Fortune article states.

This uncertainty and rapid change is why Buffett famously avoids investing in high-tech companies (though he recently made an exception by investing in Chinese auto-maker BYD). He says he puts those companies into the "too hard" pile and moves on to companies whose competitive advantage seems less certain to be disrupted by future change.

Regardless of what chip wins out, people are likely to keep buying Band-Aids, Oreo cookies, Wrig-ley gum and Coca-Cola. Freight will still need to be shipped across the country regardless of what phone becomes the new must-have, and it would cost billions to replace the railroad tracks.

Hence Buffett's major investments in Johnson & Johnson, Kraft Foods, Wrigley and Burlington Northern.

This investment strategy is too boring for a lot of people. Many would rather buy stock in the company poised to develop the next big thing (maybe). If its product pans out, the stockholders are left holding a lottery ticket worth a fortune. That's what happened to early investors in Intel and Microsoft. But plenty of investors in dot-bombs were left holding the bag.

For conservative investors, the Buffett strategy makes a lot of sense. Usually these stocks come with healthy dividend yields. And they also allow you to sleep well at night, confident that the latest fad or technology will have little effect on your investment.

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