Wednesday, July 15, 2009

Dykstra: Another Too-Good-To-Be-True Story

Growing up I was a big baseball fan, still am, but to a lesser extent. I collected baseball cards and followed the Major League teams closely. I could tell you the starting lineup of every club, their individual player stats (not just for the year, but their career) and every team a player had played for - it was my passion, before finance. I remember the 1986 world series like it was yesterday - Boston Red Sox versus the New York Mets. It was a great series and my favorite ballplayer at the time, Wade Boggs was about to win his first World Series (Boston)......until the most famous gaffe of all time occurred. In game 6 the Red Sox where one out away from winning the World Series and breaking the Curse of the Bambino, a soft, easy to play ground ball was hit to Golden Glove first baseman Bill Buckner......and it went between his legs (allowing the winning run to score). The Red Sox went on to lose the game, which forced game seven, which they lost.....the curse would continue for another 18 years (they won in 2004). Bill Buckner, a great baseball player by all accounts was hated and villified, his whole life changed after that. At the end of the day though, Buckner went on with his life and most people have forgiven him and can laugh it off. What does this have to do with my headline? Turns out the only real goon on the field that day was not Buckner, but the now infamous, Lenny Dykstra (Nails - for you baseball fans).

The above article will give you a bit of a background on Dykstra in terms of his rise from baseball fame to Investment Manager fame, but I remember about a year or two ago hearing about Dykstra from a buddy (can't remember who). My buddy said something about Dykstra and I said "the ballplayer?" He told me that Dykstra had become a guru of investors and was rich and writing for Jim Cramer (in my Hall of Idiots).......what?

The article will tell you why that surprised me, but suffice it to say I was intrigued, even read a few of his articles and then promptly concluded Dykstra was an idiot. He wasn't doing anything special and would eventually peter out.......instead he went out with a bang. He claims $30 million in liabilities and $50,000 in assets in his recent bankruptcy filing.

Dykstra could help you earn outsize returns so you could live in a big mansion and use private least that was the image portrayed. At the end of the day he turned out to be just another of histories fools. Bill Buckner made an error that day back in 1986 (everyone forgets it was Bob Stanley's wild pitch to Mookie Wilson that allowed Mitchell to score, tying the game), but that is part of the game, he was no fraud, he was the real deal who made a big error - Dykstra is a fraud and will forever be known to me as the only Goon to come out of that series.

The real point: If its too good to be true.......well, you know the rest.

Scott Dauenhauer CFP, MSFP, AIF