Worth $50 or $2?

My dumbest move was leaving a lot of money in my former company's stock. I did this after talking to a professional stock analyst who worked for a hedge fund. The fund owned about 7 percent of the company's stock. He told me that according to his analysis, the stock, which was trading around $18 per share, was worth about $30 with the current management and would be worth $50 with better management. It's now selling for about $2. I paid a high price for not diversifying enough. Part of what made the company valuable was that it sat on some once very valuable real estate in California.

— J.G.T., Queen Creek, Ariz.

The Fool Responds: It's important to understand that not all stock analysts are good ones, and even the good ones are wrong sometimes. In addition, as you now know, it's risky to have too much of your money in one stock, even your employer's. Remember what happened to Enron workers. Even employees at companies such as International Paper and Whirlpool have suffered through prolonged slumps or stagnation.

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