In an era of online trading, when some consider holding a stock more than one day to be long-term investing, Housel's story is unusual. His experience provides a case study in the benefits of a buy-and-hold market philosophy.Though the investing strategy sounds like the essence of simplicity, it is maddeningly difficult to accomplish, as Housel freely attests. Two years after he made his first purchase, his $ 22,000 Microsoft stake was trading at the level he paid for it. So in 1989, when the stock surged more than 10 per cent in a month, he cashed out, selling half his holdings. Fortunately for him, he soon mustered the courage tobuy more stock and hold on for the ride.

``If there is one thing I have learned in investing'' in the last 15 or 18 years, it is to try not to sell your winners,'' says Housel, now 47 years old, who was impressed with his father's long time investment in International Business Machines Corp. during the 1950s. ``Sell the losers. It is hard to sell the losers, because you feel, `I am going to be justified in this stupid decision I made, and I will sell the winners and take the profits.' But every time I have sold Microsoft, I have regretted it, because every time it has been worth more afterward.''

What an understatement. Today, his 14,000 remaining Microsoft shares are worth about $ 1.2 million, or about 115 times what he paid for them. About half that gain came in the past year or so alone. Had he put his cash into a Standard & Poor's 500 index fund, he would have more than quadrupled his money over the dozen years. That is a pretty good return -- until you realize it would have amounted to roughly $50,000, assuming he had made the same number of purchases and sales over the years.

At the same time, had Housel held on to all his Microsoft shares -- instead of giving some to relatives, using others to finance a vacation cabin, and selling still more when he feared they had risen too far the value now would be about $ 3.8 million.

``People are risk-averse,'' says Prof Robert Bontempo, a social psychologist who teaches at Columbia University's business school in New York. ``I challenge you to find me more than a small handful of people who can watch the stock appreciate that much and not take the profit.''

Growing up outside Philadelphia, James Frederick Housel never aspired to be a risk-taking investor. He originally intended to be an astronomer. But instead of finishing college, Housel spent three years in Italy studying film and photography and went on to become a commercial photographer. Like many baby boomers, he did not think much about investing until he hit his 30s, in the 1980s.

His runwith Microsoft looks almost as much like a series of near-disasters as it does a series of investment coups. He missed his first chance to buy when the company went public in March 1986 at $ 21 a share. It was a highly publicised local stock, and he was following it. But Microsoft rose 33 per cent on the first day of trading, and he believed it had gotten too expensive. ``I said, `Oh, damn, I have missed it.''

In October 1986, he bought 100 Microsoft shares for about $ 30 each and watched the price promptly shoot to $ 40. "I said, `Hey!' and I sold it for the $ 1,000 profit." He had held the stock for just six weeks. "I thought I was one hot stock picker. Do you realise what that stock would be worth today?"

About $ 1.3 million. And each of those shares would be equal to 144 shares today, after repeated splits.

As Microsoft continued to climb, Housel got back on the train, even if it already had left the station. In June 1987, he bought 150 shares for about $ 108 each. He was just in time for theOctober stock-market crash. But he held on to Microsoft, even as it lost a third of its value.

Why? Partly it was just good luck. ``It was not that significant to me yet,'' he says; his attentions were focused on his other holdings then. ``It did not represent half my net worth,' as it does now. ``And since the dire predictions of economic depression did not materialise that year, I hung on to it.''

When Microsoft quickly bounced back in 1988, he bought 100 more shares. Combined with his prior shares, which had split by then, he held 400.Then, Microsoft went into the worst doldrums it had ever faced. With the economy peaking and worries emerging about the future of the software business, the company's stock went nowhere for 18 months.c``It probably was the only period in Microsoft history that it was underperforming the market" for such an extended period of time, Housel says. In January, 1989, the stock popped up 12 per cent, and at the beginning of February, he sold 200 shares for $ 60.88 a piece. Amonth later, he bought the same number of shares for $ 50.25 each. For the next several years, Housel managed to sit tight, thanks to the advice of his stockbroker. The two men became friends, and whenever Housel felt panicky, he would have lunch or dinner with the Seattle broker, Bill Donnelly of Smith Barney, now the Salomon Smith Barney Holdings Inc. unit of Citigroup Inc. Housel had other first-hand knowledge of the company: The companies that were building the Microsoft campus sometimes hired him to take photos of their work. "At other companies where I have been, people are simply waiting for 5:00 to run out the door," he says. ``You don't see that at Microsoft.'' Meanwhile, all around Housel, Microsoft's influence on the Seattle economy was readily apparent.

Stock-option-millionaire employees built multi-level hillside homes, bought Feraris and Porsches, wore the most expensive Gore-Tex outdoor gear, indulged in dinners of Copper River salmon from Alaska and donated to local charities.

OtherSeattle investors were also benefiting from the local company's success. Ron Benson, 93, who once ran his own chemical company, says he bought Microsoft stock at the suggestion of Bill Gates Sr., a prominent Seattle lawyer and the father of Microsoft's chairman. ``He told me one day, `You know, Ron, I've got a bright young guy, my son, and he's got a bright young associate, and they've come up with an idea that I think will probably change the world.' So I bought some. My broker said, `You're wasting your money.'

I said, `It's my money.' '' Gates Sr. couldn't be reached for comment.

Benson says he made more on Microsoft than he made selling hi chemical company. He endowed several college scholarships in memory of his wife and his father.

At the end of last year, with Microsoft at an all-time high, Housel's fears about the stock price got the better of him once again. He sold one-sixteenth of his position, or 500 shares at the time, cashing out $70,000 just in case the stock took a hit. ``I worry thatthis is tulip mania, and that when the market goes down, it won't be just the Internet stocks that go down,'' he says. So far, Microsoft is up around 25 per cent since then.

Throughout the journey, Housel has remained self-deprecating. He still refers to his 27-foot-long sailboat as "my yacht." He continues to work long hours 12-hour photo shoots aren't unusual for him and instead of focusing on his stock gains, he reminds himself of his mistakes in selling when he should have hung on. And there is part of him that doesn't quite believe the whole thing has happened. His experience has made him something of a stock guru. Earlier this year, his wife's first husband called to ask for advice on investing for their two teenage daughters' college fund. Housel told him it could be too late to buy stocks for such a short-term need, warning: ``That door already has closed.''