However, keep in mind another of the Oracle of Omaha's famous quotes, "Our favorite holding period is forever."

In investing, there are no absolutes. Sure, a hot growth stock can't keep shooting to the moon. At some point, it matures and its shooting-star growth phase is behind it. However, that may or may not be a good reason to sell.

Another way is to take some profits but keep some of the position open (unless there's reason to expect it to crater). In your friend's case, when Starbucks went up 7x, he could have sold half his position - realizing 250% gains - and held on to the remaining shares. Unless the company folds, at some point its stock will come back into vogue and you may get another nice gain.