I graduated from high school in 1998. My grandfather, wanting me to learn something about business, gave me $500 to invest in the stock market. Java programming was hip at the time, and I decided to put the money into Sun Microsystems, resulting in ten shares.
A few months later, my grandfather passed away, so suddenly the stock wasn't just stock, but was also his final gift to me. I watched the stock double in value, go through several stock splits, and eventually my $500 investment was worth around $6000. But, due to emotional attachment, I didn't want to sell.
The dotCom boom turned into the dotCom bust, and my Sun stock gradually sank back down. At their request, in 2008 I mailed back my stock certificates as part of their "reverse stock split", and in 2010 (just a couple of weeks ago) I received in the mail a check for $190 from Oracle Corporation, as Sun is now no more.
Had my grandfather been here, he surely would have advised me to sell the stock when it was valued in the thousands of dollars, and had I known that in the end the stock would be reduced to a check for $190 from a different company, I reckon I would have decided to sell it myself.
So what did I learn? Don't get emotionally attached to a stock, or to a company, or to anything of that nature. Companies come and go. If you can make the world (or even your little piece of it) better by selling a stock, then consider selling it. The memories I have of my grandfather are far more precious to me than the stock, or the $190, or the potential for $6000, but I let emotions (and maybe a bit of stubbornness) persuade me otherwise for a decade.
Deal with facts. Find out what the company is doing and planning to do. Find out how well the company is managed, and if you do buy stock, keep up on how well the company is managed. If it looks like some new CEO is going to drive the company into the ground, that might be a good time to get out, even if the company is still making some cool product that you like.
For me, I tend to shy away from buying individual stocks now. There is great potential for great success, but there is also great potential for great failure. I like to think I have better odds at becoming wealthy by creatively working hard rather than by picking stocks, so most of my stock investments are spread across a variety of funds. Even those can turn sour quick, but in most cases, not as sour as quickly as an individual stock can.