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I'm puzzled by a lot of things about the market, but the ascent of former Major League Baseball All-Star Lenny Dykstra to the throne of options trading pundit is pretty interesting.He writes regularly for TheStreet.com (NASDAQ: TSCM), with a focus on the trading of deep in the money calls, one of the less risky options trading strategies out there. A 2006 look at his background in Fortune summed his market experience up this way: "After his mutual funds tanked, Lenny Dykstra leaned on some heavy hitters to transform him from an ex-major leaguer to a minor-league stock picker. At the time, he was talking to the reporter about a stock he owned called Lipid Sciences (NASDAQ: LIPD), which has steadily declined in value since that article. It was the only stock he owned.
Outside of his columns and appearances on CNBC, Mr. Dykstra's media attention has been less than positive. His name appears 28 times in the Mitchell Report on steroid use in baseball, but he declined to speak with Mitchell's team. In an affidavit, for Major Leaguer and steroid user Jason Grimsley accused Dykstra of using steroids.
But wait there's more: In February, accounting firm DDK & Co. LLP of Manhattan sued Dykstra, alleging that he had failed to pay a $111,000 bill for services.
I have no problem with Mr. Dykstra, and I wish him the best of luck in all his endeavors. He has a great entrepreneurial mind, and has reportedly had great success with a car wash business. But other than the fact that he used to play baseball, what exactly is his platform for offering strategies for options trading, a complex world fraught with risk for most investors?
It was recently reported that Dykstra got the gig with TheStreet after emailing Jim Cramer.
It makes you wonder: do you really want to take options trading advice from a guy who got his job as an investment guru at least in part because he sent Jim Cramer's sister a signed poster? Just saying.
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Reader Comments (Page 1 of 1)
4-04-2008 @ 11:11AM
Michael Schneider said...
"Nails" was on the Fox business block shows several times and I have read some of his columns for The Street. I'm not too worried about the fact that he was a ballplayer-- in stock trading and options some of his qualities (made famous in the book Moneyball) like aggressiveness and boldness could be assets. I'm also not too worried that he worked and learned under Jim Cramer because I have been able to make some money with Cramer. Also, some of Lenny's trading strategies looked interesting to me. I have the sense though, that like Jim Cramer his approach works well in a strong bull market but carries too much risk in a bad or choppy market. Lenny is hoping to attract money from ball players and sports figures who could afford to take a hit on their investments and who could bounce back pretty easily and who could gain more from a tax loss than most investors. His strategies may be more suited to that group than to individuals who, when they lose money have a tougher time recovering. Analysis in sports like baseball often can offer lessons for investors( a review of Moneyball is still posted at http://www.Barrelomoney.com. John Rogers of the Ariel Fund said it has a great connection to what a value manager does. Baseball fans can also find at http://www.Barrelomedia.com an item on Bill James the former worker in a pork and beans factory who transformed the game of baseball). People who enter new fields often fail but in academics and elsewhere sometimes when they succeed they add a lot. I wish Lenny Dykstra all the best.