Lenny Dykstra….Stockpicking Savant?
This is the first in our new series: Talking Heads
Lenny Dykstra was a one-man wrecking crew when he played for the Mets and Phillies back in the day. Brash and outspoken, he was the Charlie Hustle of his generation. He has parlayed his baseball earnings into a http://www.nj.com/mets/ledger/index.ssf?/base/sports-1/1160455584216100.xml&coll=1">mini empire that includes car washes, quick lube outlets and other related business ventures. All in all, we would have to say that he has done well for himself despite some missteps along the way and lingering suspicions that he still parties too much.
Indeed, we think some of his television appearances have been quite bizarre as he adjusts to a different type of media glare. Of late, Lenny has frequently been quoted in the media advocating a deep-in the-money call strategy and has also been quoted on the record boasting of a near-perfect run of stock picks…
Dykstra says more than 90 percent of his stock picks are money-makers. And if you don’t believe it, he says with that familiar edge, ”go ahead, dude, look it up.”
Still, he can’t be any worse than some of those so called professionals CNBC trots out day after day, and we are willing to give him a shot at attaining guru status here at UTC. A reasonably lucid Dykstra was on Fox News Channel’s “Bulls and Bears” this past weekend (10/21/06) sharing his investment prowess with, well, anyone who will listen. His picks included:
Archer Daniels Midland (ADM)
Yahoo (YHOO)
Anadarko Petroleum (APC)
Unit Corp (UNT)
Diageo PLC (DEO)
Despite our skepticism regarding ex-baseball players and ex-wrestlers who dispense financial advice to the unwashed masses, we are trying to have an open mind. And we have to be honest. We love Lenny Dykstra. We admired his grit during his playing days and now his attempts to create jobs and wealth since he retired from the game. We are just not convinced he is a stock savant with a 90% success rate, although he is probably better than Joe Battapaglia.
We also love a good scrap, and have an ego every bit as bloated as Lenny’s face and waistline. Thus we think a little wager is in order. We will submit five picks, including the high flying recent IPO Acme Packet (APKT)
and the following:
Express Scripts Inc.(ESRX)
Global Payments(GPN)
DeVry Inc. (DV)
Exlservice Holdings (EXLS)
The two portfolios will be tracked and we will update you periodically on the progress, or lack thereof. The circus will end on December 31st, 2006 and a winner declared.
Too, in honor of Lenny’s five flea ridden dog picks, we will make a modest donation to the North Shore Animal League at the contests end....and if we beat Lenny we will ask him to match our donation.
Game On, Nails
Buried with the Mets
Savvy readers of UTC are always quick to spot promising investment opportunities. We think we may have found a live one for you.
Funeral home operators such as Service Corp International (SCI) and Carriage Services (CSV) have been struggling to grow earnings over the past few years. And the stocks have been....well, dead money.
Although they say you cant take it with you, Major League Baseball is hoping that doesn’t hold true for diehard fans. Fans can now choose between stylish urns and caskets decked out with the colors and logo’s of their favorite teams...providing everlasting support into the afterlife.This infinite time horizon should ensure that even Cubs fans get the championship they so desperately crave. Fans can still be part of game after final out (MSNBC)
And with New York Mets fans downright suicidal these days we would expect the growth rates of the funeral homes to re-accelerate. We are going to do some digging here...but these products might breathe some life into the deathcare industry.
Crackerjack not included.
The Cardinal Rule
We could not help but notice during the telecast of Monday Night Football on ESPN this week that the new home of the Arizona Cardinals is “University of Phoenix” Stadium. University of Phoenix’s parent is Apollo Group, a former high flying Nasdaq stock that has been a prominent corporate citizen in the Valley of the Sun. While we are certainly not opposed to higher education here at UTC, the name of the new home of the Arizona Cardinals did set our antennae a-flutter as it brought back memories of numerous naming right deals that were consummated in years past.
Who remembers the carefree days spent eating hot dogs and pounding beers in Houston when the Houston Astros played in Enron Field. Ok, truth be told we never attended a game there as we think Houston is a malaria-ridden swamp, but you get the idea. The Tennessee Titans enjoyed some of their franchise’s best years at Adelphia Field, at least until the company went bankrupt and the founder went to jail. Or perhaps CMGI field, named after a former red-hot internet company whose stock subsequently declined 99% after the deal was inked. And for fear of triggering nightmares among some of you we will not even mention 3Com Park and that stocks subsequent performance.
Of course, the most notorious example occurred several years ago in Philadelphia shortly after First Union Bank acquired CoreStates Bank and renamed the old Philly Spectrum the “First Union Center”. Erudite Flyers fans soon renamed it the “FU Center” in spontaneous chants which mercifully ended when Wachovia bought First Union in 2003. Is it any surprise that current CEO G. Kennedy Thompson was recently the subject of an unflattering profile in the Wall Street Journal and is under the gun as his stock continues to underperform the peer group and institutional investors grow restless?
Slap your name on a stadium and we will short your stock. Forget creating fancy trading algorithms or buying the Dogs of the Dow. Because this is one investment methodology that is as foolproof as it gets on Wall Street. Thus we were not too surprised when we powered up our trading turret this morning and were greeted with the following news:
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Apollo Group tumbles on results, options woes
This is a terrible quarter and likely raises many questions about the health of the business model,” wrote Prudential Equity Group LLC analyst Steven Barlow, in a note to clients. Prudential rates the stock “neutral.” The results exclude the possible impact of accounting changes from the Phoenix-based company’s ongoing review of its stock option grant practices. Apollo said in June that it had received a subpoena from the U.S. Attorney’s office in connection with the issue.
Hedgies Getting Horsey
Interest in the sport of polo is on the rise in England. Since 2000, the number of clubs devoted to the stuffy past-time has jumped from less than 40 to more than 60, with five or so claiming to have at least 100 members. Where’s all the interest coming from? Most of them work for the likes of UBS, JP Morgan or Citigroup,” according to one club owner. “They’re traders or they work for hedge funds.”
Making a Mint Out of Polo Ponies [BBC]
Becoming Bookie Next Step for Goldman?
Goldman Sachs has just issued a 57-page report of this year’s World Cup tournament, mixing soccer and economics into its global analysis. Such rocket scientists as David Beckham have even contibuted to the analysis. With six of the G7 countries in ranked in the top 20, maybe they’re onto something. In the case of Australia, for example, the report draws parallels between 1974--when the national team last made it to the big time--and today: Both moments were characterized by a booming commodity market and a collapse in manufactured goods. The odds for Australia don’t look too good though: Goldman gives them 125:1 odds to go all the way.
Goldman Runs Rule Over Socceroos [The Age]
NFL’ers Left Holding Ball on Hedge Fund Investment
Two days after a group of NFL players sued an Atlanta-based money manager for refusing to let them withdraw about $15 million in capital, the Massachusetts officials joined the scrum, filing an administrative complaint against the firm, International Management Associates, and its CEO, Kirk Wright. Triggered by a complaint from a constituent who has $3.2 million sunk in IMA, the Secretary of State called for a number of remedies, including restitution. He’ll have to get in line though: Georgia has already frozen the assets of of the firm (which Kirk claims total about $150 million) and its three principals.
NFL Players Say Fund Fumbled [CNN Money]
Massachusetts Joins Inquiry [CNN Money]
Forget the Ethics, This is Just Plain Embarrassing
It ain’t looking good for Guy Chiarello, the Morgan Stanley CTO who is sinking deeper into a morass of ethical problems with each passing day. The Post is now reporting a series of emails in which the managing director effectively tried to bribe one of the owners of the Yankees to let him be a bat boy for a day in return for, wink-wink, a lot of “interest” (i.e. ticket sales) from Morgan. The owner approached by Chiarello confirmed to The Post that the e-mails were authentic - and said that he tried “very hard to find a polite way to turn a crazy request from a guy I’ve never heard of down.” Yeah, what’s up with a grown man begging to be a bat boy?
Banker’s Batty Request to Yanks [NY Post]
