The northeastern U.S. is experiencing a prolonged cold snap, and certain areas in upstate New York are buried beneath 8 to 10 feet of snow. But the world of baseball has tunnel vision for Florida and Arizona. It is that time of year again for the annual journey south; pitchers and catchers report this week, and position players will join them soon thereafter.
This annual rite of spring heralds the start of America's pastime. Players exude confidence at the start of spring training, convinced that their offseason efforts will translate into a successful season. Younger players see an opportunity to make the opening-day major league roster, which will translate into a larger paycheck. Everyone's energy is focused on one goal: make it to the big leagues.
Speaking of the big leagues, my pick this week is
, which defines the big leagues. In a survey conducted by
, GE ranked as the "World's Most Respected Company." The company consists of six businesses -- GE Infrastructure, GE Industrial, GE Commercial Finance, GE Healthcare, GE Money and NBC Universal -- and chairman and CEO Jeff Immelt has done a fabulous job focusing on growth initiatives.
For example, the company spends $13 billion every year to maintain its technical leadership, and it has more than 90 "Imagination Breakthroughs" in the pipeline. (According to the GE Web site, "Imagination Breakthroughs" translate imagination into distinctive GE products for customers.)
GE's stock closed at $35.77 Tuesday, making a new 10-day low. But the conglomerate is still trading above its 200-day simple moving average, which comes in at $34.82. Stocks that fit into this category have, on average, experienced upside reversals.
This leads to our pick this week: buy 10 of the September $30 General Electric (GEIF) in-the-money calls. This particular option closed at $6.30 Tuesday, which is exactly where I am going to place my order. I'll use a limit order to buy 10 in-the-money calls, allowing us to control 1,000 shares of the common stock for more than seven months.
Managing Big League Money
Some players toil in the minors for several years before having a realistic chance to make the parent club. Even phenoms spend some time developing in the minor leagues. Regardless of your pedigree or reputation, you must produce in spring training to secure a roster spot.
One must understand, however, that
a roster spot is not synonymous with
a roster spot. Consistent production is essential to landing the big contract. Unfortunately, many athletes believe that once you obtain the "big money," you will somehow maintain that income stream forever.
So it's not surprising to read stories of athletes who squandered their money. After all, most athletes spend more time taping their ankles than they do educating themselves about protecting their wealth. Understandably, athletes devote the vast majority of their time to rigorous training schedules designed to hone and enhance their skills. This leaves precious little time for other endeavors.
Moreover, many athletes are afraid that financial management is too complicated. Therefore, like most people, athletes have a tendency to shy away from situations they do not believe they can master. Failure to address one's ongoing wealth management will lead to devastating consequences.
Given my personal experiences, I do not believe that wealth management needs to be a fear-provoking exercise. On the contrary, I believe that the process can be simplified so that athletes will be comfortable with the prospect of participating in the management of their money.
To that end, along with former NFL star Tim Brown, I have formed The Players Club, an entity designed to educate athletes about wealth management. Members of The Players Club will receive a monthly newsletter with ongoing content from financial experts, along with other products I will discuss later.
There will also be a feature about the daily trials and tribulations that athletes face. This feature will reassure athletes that many of their brethren share their concerns and uncertainties.
Nonetheless, the main goal of The Players Club is to ensure that athletes find and use appropriate ways to maintain and grow their income streams. The Players Club is not an investment vehicle. Rather, The Players Club is a conduit whereby athletes can partner with experts in the field of wealth management to secure the futures for themselves and their families.
Partnering with the finest financial institutions in the world, which will provide products that guarantee recurring income, will allow athletes to experience an unprecedented level of security in maintaining their wealth.
Thus, my second deep-in-the-money call this week is The Players Club, which I intend to be synonymous with the successful management of athletes' wealth across the globe.
Always remember: Life is a journey; enjoy the ride!
At the time of publication, Dykstra had no positions in stocks mentioned.
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.