Explain why this common sense idea is flawed

[Bukem_]

Say I do a moderate amount of research and find a stock that is established, has low debt and good management.

It also has moderate volatility so I can make a healthy income off it's swings.

I sell it regardless of how long I've been holding it once it moves at least %10.

It may also move down for a period of time.

But it is an established company and it is highly likely that it will move %10+ above original purchasing price in at least the next 3 years, and I am patient to wait this long and re-evalaute things then.

What am I missing here?

How, if any would things change if I'm investing 5k, 20k, or 100k?

[DesertCat]

It's simple, past behavior doesn't predict future behavior. Trying to predict patterns in the stock market is a fools endeavor.

The real question is why do you think an established company should move 10% higher in the next three years? Enron was an established company. Marsh is an established company (from $45 to $22 in a week).

It sounds like you need a deeper understanding of how to value stocks. It's pretty dry reading, but "The Intelligent Investor" by Ben Graham is a decent introduction to how to figure out the real value of stocks.

[GeorgeF]

"move %10+ above original purchasing price in at least the next 3 years"

That's 3%/yr, thats about what TIPS yeild.