I can empathize with Steve Wynn, the multibillionaire founder of Wynn Resorts
On Tuesday, you see, I selected NVE
As my standing in the CAPS ratings plummeted, my reaction was quite similar to Wynn's. (His response to his blunder was reportedly succinct, colorful, and four letters long.) But like Wynn, I didn't panic. I stayed calm and assessed my options. I had made a mistake in underestimating NVE's growth, but after I reviewed my rationale for rating the stock as an underperformer for next 12 months, I calmed down. Like Wynn, I knew the situation wasn't as dire as it first appeared.
As I have written before, NVE is selling its products in the medical-device area. The company's great promise, though, lies in the field of computer memory. To date, however, I have seen nothing to convince me that FreescaleSemiconductor
A second lesson that can be learned from Wynn's experience is that assets -- be they paintings or stocks -- can be put back together, even after they have sustained a serious hit. (Wynn is having his masterpiece restored by an expert in New York.)
I thought of this lesson in relation to another stock in my CAPS portfolio, UnitedHealth
This brings me to the third lesson. It's important to remember that investing -- like art collecting -- is a long-term game. Wynn first bought La Reve in 1994 for $48 million. Before damaging it, he had agreed to sell it to hedge-fund manager Steven Cohen for $139 million. It is now unlikely to fetch that amount, but it will still return a healthy profit, should he decide to resell it.
I hope he doesn't, though, because the story alone is priceless -- not to mention the lessons that accompany it.
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