Doing nothing is one of the hardest things to do.
The investment implications have to do with over-trading on the part of investors (as opposed to traders) and influences that can cause investors to trade more than they should.
Over the years I've made many references to certain stocks and ETFs that we have held for many years. In a well diversified portfolio there will probably be at least a few companies that have been able to grow their dividends for many years--client holding Johnson & Johnson has been able to grow its dividend every year for many decades.
Sticking with the JNJ example, over the years it has been a leader and a laggard and had some hiccups along the way. Coincidentally, for the last five and ten years JNJ's price return has been a smoother ride to an almost identical result as the S&P 500 but with bigger dividends along the way. For 20 years JNJ has been miles ahead of the SPX. Going forward there will very likely again be periods where it is a leader, a laggard and have some hiccups along the way.
The above description can be applied to countless stocks that are by no means hidden gems of any sort. Again, the idea here is that many diversified portfolios have at least a couple of these types of names and they all face threats of varying magnitudes, there have been several serious threats to tobacco stocks over the years and for most of them the best thing was to hold on.
This is not to downplay that occasionally we all get some picks wrong and they need to be sold or the story changes after some period of time necessitating a sale as well or there needs to be top down changes in an actively managed portfolio but the quote is about the propensity to overreact to news that in the long run isn't very important.
A good company is going to have at least an occasional earnings miss. A great stock is going to lag the broad market and its sector every so often, that is just how things work.