hi lonewolf, you're right. there is a lot that goes into the pricing of a stock. that's why i advice not to get too caught up in it. and yes diversification is the mantra of a good portfolio! however, i don't agree you need a lot of stocks to be diversified. my own theory is to not have between 5 - 7 but i can see why you would want upto 10 depending on your risk tolerance but more than that, you're probably better off buying mutual funds. one way to protect your portfolio from market moves is to invest in sector that aren't following the market (meaning that are doing better than the rest). it's not sure thing that just because you konw the HOT sector (which is relatively easy to do) doesn't mean each stock from teh same will perform well from that...so i say take diversifying to another level...find the sector that is performing better than the market and diversify in it. right now metals, aerospace, foreign (esp. china) stocks are beating the market but some of the tech stocks are starting to make a serious comeback so put them in your rearview mirror :p