The Case Against Owning Individual Stocks

Ever since Enron's(ENRNQ Quote) stock tanked last fall, I've been trying to reason with myself and avoid overreacting. No one could have predicted the fall of Enron, I say, to soothe myself for being foolish enough to hold the stock through the bankruptcy filing.

Then I look around at my other stocks and tell myself: Enron is an isolated situation. No need to panic.

Both rationalizations are designed to make me feel better. But even I can see that they are mutually exclusive. If no one could have found out the level of misconduct at Enron, then lots of companies could do what Enron did, and I wouldn't have a clue about it until it was too late. ...