Imagine a brand that establishes market dominance such that the product becomes synonymous with the brand. Then the government forbids any further advertising for that product. Any "new-and-improved" variation of that product may as well remain on the drawing board, because there is no way to adequately disseminate its "virtues" without advertising.
So the brand that dominated the marketplace prior to the advertising ban will undoubtedly remain etched in the public consciousness in regard to that product. Cigarettes are that product; Marlboro is that brand.
, the former Phillip Morris, is the company that owns the brand.
This is a perfect segue into today's deep-in-the-money call. We will use Altria, which closed at $84.84 on Thursday, as our deep-in-the-money call play. The play is a buy of 10 of the June $75.00 (MOFO) deep-in-the-money calls (10 calls equals 1,000 shares).
This is an excellent example of our strategy; if we were to buy 1,000 shares of Altria common stock, we would need to "dig deep" and come up with approximately $85,000, opposed to $10,500 for the June $75 strike price.
This particular strike traded as high as $11.20 yesterday, but closed the day at $10.70. We will put our good-till-cancelled (GTC) buy order in at $10.50, using a limit order.
There's lots to like about Altria.
The stock has a strong uptrend with support at $84.29; the Kraft spinoff is to be completed March 31; and the company has consistent earnings and dividend growth (the current yield is 4.05%).
Altria also has huge operating cash flow, and it seems the litigation pressures are easing. Bottom line: If our GTC order gets filled at $10.50, we will be in control of 1,000 shares for approximately the next four months, all the way until the third Friday in June.
Remember, my goal is to help you make money. There are strict warning labels on cigarettes, cautioning about their potentially lethal effects for good reason. Hence, this is not about the "virtues" or the perils of cigarettes -- this is about making money, and if you think cigarettes are going to be around for awhile, then placing your bet with the company that's become synonymous with the product could be a good move.
Speaking of making money: Congratulations to all of you who cashed in on
our pick from earlier this week
July $22.50s for $7.80. We cashed out Wednesday with a $1,000 "W" in less than three days!
Speaking of wins, let's turn our attention to sports and who looks good for the upcoming baseball season.
Spring training's first full week has already generated several stories of interest to the adoring baseball public. Bernie Williams, a New York Yankee for 15 years, opted not to sign a minor-league contract, which may signal the end of his highly productive career. Manny Ramirez, a man seemingly wed to controversy, has permission from the Red Sox to report late to spring training for family reasons. Reports have surfaced, however, that Manny is scheduled to attend a Classic Car Show in Atlantic City this Saturday.
Speaking of the epitome of controversy, Barry Bonds has officially signed his contract with the Giants for this year. Barring some unforeseen events, Bonds should break Henry Aaron's record for most career home runs this summer.
Adding just a bit of spice to the "controversy pie," Jimmy Rollins, shortstop and leadoff hitter for the Phillies, has anointed the Phils as the team to beat in the National League East. I'm sure the Mets, who won the NL East on cruise control last year, and the Braves, who won it 11 consecutive years prior to last year, took note of J-Roll's assertion. Nonetheless, hope springs eternal in these first few weeks of spring training.
Earlier in the week, I alluded to the battle this weekend for college basketball supremacy, featuring Big Ten foes Ohio State and Wisconsin. Unfortunately, the game has lost a little of its luster because Wisconsin was upset by Michigan State on Tuesday. Regardless, the regular-season winds down with the proverbial "bubble teams" eager to attain another "quality win" to impress the NCAA tournament selection committee. This appears to be a particularly difficult year in choosing a clear-cut favorite for the title.
In the world of golf, Tiger Woods is back this week, continuing his quest to win 11 straight PGA Tour events; next up is the Accenture Match Play Championship in Marana, Ariz. Nearly all of golf's notables are competing, including Phil Mickelson, who lost a heartbreaker last week to Charles Howell III at Riviera. Many believe this could represent the most difficult hurdle for Tiger in pursuit of Byron Nelson's incredible record for consecutive PGA tournament victories.
Heretofore we have examined some facts and statements with a speculative bent. Speculation fuels controversy, whether it be sports, politics, entertainment or medicine. Moreover, we expect and accept speculation as an integral part of our daily living. One could argue that most of us make a living by speculating to some degree.
When it comes to wealth management, it would be extremely comforting to greatly reduce or even eliminate speculation from at least part of the equation. The Players Club (my program to help professional athletes with their investments) will do just that by providing a vehicle whereby athletes can obtain guaranteed recurring cash flow through world-renowned wealth management institutions.
Meanwhile, our Web site is moving forward as we customize the product for our members. Furthermore, negotiations continue with several entities that can provide their expertise to our endeavor. We continue to forge ahead to make your deep-in-the-money call, The Players Club, devoid of speculation.
Always remember: Life is a journey, enjoy the ride.
At the time of publication, Dykstra was long HAL and MO.
Nicknamed "Nails" for his tough style of play during his Major League Baseball career, Lenny Dykstra was an integral member of the powerful Mets of the mid-1980s, including the world champion 1986 squad, and the Phillies in the early 1990s.
Today, Dykstra manages his own stock portfolio and serves as president of several of his privately held companies, including car washes; a partnership with Castrol in "Team Dykstra" Quick Lube Centers; a state-of-the-art ConocoPhillips fueling facility; a real estate development company; and a new venture to develop several "I Sold It on eBay" stores throughout high-demographic areas of Southern California.