All wins are great, but some are simply better than others. Now, if a trade makes money, it's a winner. That's very straightforward and hard to argue with. But what separates a perfect trade in my mind is when the pick I make behaves exactly as it's supposed to, exactly as I envisioned it would.
I have been asked several times recently which of my 68 wins this season I am most proud of. There's been a lot to choose from, after all, I have 68 wins and zero losses on the books, with just six open positions. In all, I have achieved $184,000 in wins. As a reminder, my year began on March 25, when I penned my first column of 2008. It ran on
, even before I launched my newsletter,
The answer to that question is not likely an obvious one. You might think my best trade was the one where I rang the register the loudest, made the most money.
, my pick on May 14, made me a $13,800 profit after staying in play a little more than two months. It was a very profitable trade, but I needed to make several in-game adjustments to that play. This was a good one, but not my favorite.
I also scored major league victories with my
picks recently. I picked all three in August.
McDermott was an especially satisfying victory because the stock dropped quite a bit in the days following my pick, and the emails flooded in questioning the pick. Some people were not yet convinced by the power or reliability of my system. They thought it was a swing and miss. I knew I needed to stay calm and focused with this pick and continue to play by the rules. And 10 days after my original column published, I had $4,100 more than when I started and another mark in the win column. A good pick for sure, but my best? Nah.
On Aug. 27, I went all the way out to January 2010, picking the General Electric $20 calls (WGEAD). A little more than three weeks later, my win tally had increased by $5,750 due to this pick. Again, I love making money, and there is nothing more gratifying than seeing my system work the way it is supposed to.
You need look no further than my Garmin win. It is one of my biggest ones of the year, and an $8,100 win is hard to argue with. But, as with Morgan Stanley, I needed to average down on this pick, meaning I had to add to it as the stock price fell. I added to it several times in order to lower the average price I paid for my options. By doing so, I repositioned myself for an easier win.
That's because I always set my good-till-canceled (GTC) sell order $1 higher than my average purchase price. The lower the average purchase price, the lower the price I need the option to climb to before I sell it. Easy enough, right?
So, getting back to the question, what is my favorite pick of the season? There are many good ones to choose from, but if I had to pick just one I would say
is my favorite. I have picked this company twice this year. The first time was on May 21, and that pick turned in a $13,200 win after 72 days. The second time I picked it -- on Sept 17 -- I went all the way out to January 2010 and selected the $7.50 calls (WVDAY). I like the recent pick the best.
The reason? The market got smoked last week. People were scared. They sold and sold, and the stock was punished unfairly with the rest of the market. The CEO of the company went on television, and I liked the plan he laid out. I knew this company was trading at an absolute steal. I was right. The very next day I won. I had invested just $5,000, and one day later I had a $1,000 profit on the trade.
Think about it for a second. I was winning last week -- a week that scared the heck out of a lot of people. Most people were running for cover, trying to cut their losses, not worrying about trying to make more money. I was focusing on setting myself up to win.
It's true the stock ran up quite a bit, but you will remember that I don't play games with these picks. I have a system. I find picks when they are trading at a discount, grab a win when I can and look for the next mistake made by the operators on Wall Street. I follow my system. I follow the rules.
Always remember: Life is a journey, enjoy the ride!
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At the time of publication, Dykstra had no positions in stocks mentioned.
Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."