A reader asks about Silicon Labs (SLAB), the portfolio’s biggest current winner with a 57% return in the 51 weeks since we recommended it.

Ben Shepherd, who wrote the original report, recently reviewed the chip maker’s good quarterly results. Business is booming and SLAB continues to take share in its main growth market, the so-called Internet of Things (connected machines, appliances, devices and sensors).

Now, it’s true that after its huge rally the stock hasn’t done much of anything for two months. And I want to be up front about this: dumping a stock because it’s up a lot or because it hasn’t done much recently are two of the very worst reasons to sell. Over the long haul they are sure to cost you money.

Stocks go up a lot all the time and some then go up a lot more, to the surprise of investors suffering from “anchoring” – the human tendency to perceive the first share price we recall as the “right” one. Stocks with favorable fundamentals and price action are the scarcest commodity of all, not to be discarded without an excellent reason.

In SLAB’s case a sign of competitive losses reversing recent gains would certainly be worrisome. Or if the Internet of Things turned from a bigtime moneymaker into a dud, unlikely as that seems, I suppose,

But that’s not happening, and in the meantime SLAB remains a broadly diversified technology leader with attractive cash flow and intellectual property portfolio, one making hay in its industry’s hottest market.

Silicon Labs has another quarterly report coming up in two weeks, and as a fast climber is perhaps more at risk of a trading tantrum than it would be otherwise. But if it should happen to pull back on unsurprising results I’ll be highly likely to recommend buying more. And in the meantime the sideways action after a big rally is an indicator of strength rather than weakness.

“It was never my thinking that made the big money for me, it always was sitting,” the great speculator Jesse Livermore reportedly liked to say. We’re going to sit on SLAB and let others try to pick the top. This probably ain’t it. Buy SLAB below $72, a limit I plan to review after the upcoming earnings report.