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chief exec Ken Thompson had been pushed out by the board Monday morning rippled through the market. The Dow shed 134.5 points, while the S&P fell 14.71 points and the Nasdaq sank 31.13 points.
However, amid the selling,
got logged in the win column. Tesoro was my
. The company had been getting absolutely hammered and I thought it was an absolute steal at that price back then and would put me in great position to grab a win. However, Tesoro required a little more commitment and intestinal fortitude.
At 40 days, Tesoro stayed in play longer than any of the other wins to cross the finish line so far in the 2008 season. That's not that long because we typically go out four to seven months with most of the picks. However, Tesoro also required a few rebuys.
The stock went south after I bought it, so in order to put ourselves in the best possible position for a win, I needed to employ a crucial part of my system: taking advantage of the next buy level. If you are not familiar with this concept, pay very close attention.
Essentially, when the price of an option goes down, it may be necessary to purchase additional contracts at a lower price in order to achieve a win more easily. The reason for the additional contracts is to lower the average cost you pay for each contract, which will also allow you to lower the sell price and still achieve a win. The next buy level, which I will update each day in my Stat Book in the newsletter, is the price the common stock must fall to before it's time to buy 10 more options at a lower price.
Just like in sports, in-game adjustments are necessary to react to the changing situation. I did that and grabbed a win.
For today's pick, I am going back to
, a company I really like. It was my first pick of the season, and I tried to get in again after that. Unfortunately I came up empty handed those times -- neither pick was filled. I expect the third time to be a charm.
Delphi's a good company with a very solid balance sheet. The company provides insurance plans to companies and manages all aspects of employee absence and provides the related insurance coverage. That includes long-term and short-term disability, excess and primary workers' compensation, group life, travel accident and dental.
While its price has gone up since my earlier columns, it's still at a very attractive price. It closed at $28.54 on Monday. In the last year, the stock is off 33.19% while the S&P is down about 10%. Its 52-week range is $22.26 - $47.79. So, as you can see, it's much closer to the low than the high.
Therefore, I am placing a limit order to buy 10 January $22.50 calls (DFGAX) at $6.90 or better. If the order is filled, don't forget to place a good-till-cancel (GTC) sell order $1 higher than the fill price so you can grab your $1,000 victory as soon as possible. In other words, if your order is filled at $6.90, you should immediately place a good-till-cancel (GTC) order to sell at $7.90.
Always remember: Life is a journey, enjoy the ride!
Know What You Own
: DFG operates in the life insurance industry, and some of the other stocks in its field include
American International Group
. These stocks closed at $35.87, $73.35 and $18.54, respectively. For more on the value of knowing what you own, visit TheStreet.com's
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."