The Best Stocks Eventually Fall; Catch Profits With Good Sell Rules.(B)(INVESTOR'S CORNER)

Byline: DAVID SAITO-CHUNG

When you have a good stock, hold on to it. Sell it too quickly, and one thing is certain: You forfeit the chance of making a major gain.

"After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!" Edwin Lefevre wrote in "Reminiscences of a Stock Operator," widely known as a biography of the early 20th century influential trader Jesse Livermore.

Research backs up this claim. As Friday's column pointed out, the average time the best 95 small- and mid-cap stocks of 1996-97 needed to go from breakout to peak was 403 days, or 58 weeks. These stocks averaged a 421% gain from their pivot point.

Holding a good stock, though, doesn't mean shutting your laptop PC and departing for a ballooning trip around the world. Stocks aren't bonds. A market top can stop a great stock's rally well short of triple-digit or high double-digit percentage gains. When a high-growth stock misses estimates by even a penny, it can tank 20% in a week.

Likewise, it's unreasonable to expect every great stock to go up for many years or decades. Let's return to those best stocks of 1996-1997. In terms of the length of the price run, those in the top 10 percentile lasted 109 weeks. The longest run was 172 weeks, or about three ...