Partly true. First, there is no guarantee those companies will be around too long (most companies are long gone 80 years after their founded, even the giants and some of those are old companies). But thats academic, they'll be around probably. But if you sustain a 30% loss over a two year span and you make 10% a year after that, its a over 2 years just to break even, total of 5 years with ZERO gain. Thats just rotten. Buy and hold has been proven to work great in great markets but when the bears emerge your better off putting the money under the mattress and buying back when things get better.
Actually, it's close to 4 years to break even after you take the loss. You have to get back to 1 from .7 (1/.7 = 1.42, which at 10% per year is just under 4 years). So you go for 6 years with no gain in your example.
Five years with zero gain? You're talking short-term. I'm talking long-term. 20-40 years. Some of these stocks I've had since 1982 and it will probably be another 20 years before I sell them.