It’s always great to have an investment that is a shinning star, but it’s possible for that star to explode.  Investors sometimes find themselves with a concentrated stock in their portfolio, and may not understand the implications of holding such a position.  In general a concentrated position is one that represents more than 10 percent of your portfolio.
There are several ways that an investor can accumulate a concentrated position.  Employees of companies are prone to accumulate concentrated positions because of things like equity compensation, stock plan purchase arrangements, and buying
additional shares based on the belief in the company over the long run.  Two other scenarios leading to concentrated positions are inheritances and price appreciations.
The reason why this is an issue is because the stock market can be a fickle thing, and anytime you invest you expose yourself to various types of risks like: market risk, liquidity risk, reinvestment risk, exchange rate risk, and business risk.  Having a concentrated position gives an investor less flexibility in managing the risk for that security.  The success of the individual position will be based largely on how the company associated with it does, and history is full of examples of this going bad at the investors expense.
A prominent example of investors losing big due to concentrated positions is Enron.  Investors lost hundreds of thousands of dollars, and in some cases millions as the sentiment toward Enron, and also the company stock value declined.  A more recent example is that of Lumber Liquidators, whose stock price began to decline after
the 60 Minutes story said that their laminate flooring made in China, had high levels of Formaldehyde, which is known to cause cancer.  So far the stock price of Lumber Liquidators has declined over 40% this month from where it closed at the end of February around $52 per share.  
Reasons People Delay Selling a Concentrated Position
Tax implications- due to capital gains.
Future price considerations- thinking the stock will continue to rise or rebound if on the decline.
Emotions- some investors have ties to companies that make them want to hold on to a particular stock.