My pick this week is Alcoa (AA) - Get Report, the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, which recently announced quarterly revenue of nearly $8 billion, and EPS of 85 cents. The EPS figure represents staggering quarterly year-over-year earnings growth of 60%.

Let me give you one better: Alcoa announced net income for the first half of 2006 (at $1.35 billion) that was higher than full-year results for

every year

in the company's history except fiscal 2000.

The in-the-money call we are going to use is the October $25.00 strike, for only $6.20. Not only do we get an opportunity to control 1,000 shares of a great company, we also have until the third Friday of October, and we are only paying 41 cents of time premium (or extrinsic value) for that right. Recent market weakness has created a great opportunity in a world-class company that is undervalued by more than 20%, according to ValuEngine, one of the tools I use when evaluating a stock. Just five days ago, Alcoa traded at $34.00; the stock recently traded at $30.60.

By using my low-risk, high-reward strategy, we will pay about $6,200 for the right to control the same 1,000 shares, vs. $30,600 (based on recent prices) if we were to buy 1,000 shares of Alcoa common stock.

Remember, we are not in this business to buy and hold -- that's not our game plan. We buy and sell at $1,000 profit. But just in case our original game plan doesn't go according to the playbook, we give ourselves plenty of time before our in-the-money call option expires.

My job is to put all of you in the best possible position to succeed, which is why I try to keep the premium less than a dollar, and allow plenty of time before expiration -- just in case the market goes cold, like it has been for quite a while now. Now you're protected.

This leads me to strongly recommend taking a look at adding to our position in

Newell Rubbermaid

(NWL) - Get Report

at $4.30, exactly 2 points below our original cost of $6.30, for the December $20 strike. The December $20 in-the-money call closed Friday at $4.80; if you were to get filled at $4.30, you would cut your cost by a dollar to $5.30, still going all the way out until December.

Once again, by using in-the-money calls as opposed to putting up all our cash to buy common, we don't have to panic; we are in control. If we want to buy another 10 in-the-money calls for Newell at $4.30, we still have only $10,600 at risk to control 2,000 shares, vs. about $50,000 if we bought 2,000 shares of the common stock.

It's been tough lately, but buying deep-in-the-money calls is a strategy that can be effective no matter the market condition. That is why, at the end of each month, I will be writing an extra column, a scorecard, so we can see where we are at. Believe it!

Daytraders in the Front Office

Speaking of the scorecard, baseball has begun the second half of its season with the passing of the All-Star game, won yet again by the American League, which now boasts a 10-game winning streak in the midsummer classic. With the short week, there has been little change in the divisional races. A few trades have been made, with the expectation that several more will occur as we approach the July 31 trade deadline. Some big names, which undoubtedly could be difference-makers in the divisional races and beyond, can be obtained if the price is right.

As much as general managers would like their transactions to be viewed with an "in-the-money call" mentality, the reality is that their job security is often dependent upon being evaluated as daytraders. Hence, if the edict is to win now, then trades that are made in the next two weeks better result in a playoff spot.

Across the pond, the focus switches from tennis to golf, as the British Open will be contested from July 20 to 23 at Royal Liverpool in Hoylake, England. Tiger Woods will attempt to rebound from his poor showing at the U.S. Open, where he missed the cut in a major for the first time as a professional.

Similarly, Phil Mickelson will attempt to overcome his "I just can't believe that I did that" collapse at the U.S. Open, where he "snatched defeat from the jaws of victory." Let us not forget poor Colin Montgomerie, who will attempt to win his first major on home soil, after he failed to successfully negotiate a seven iron from the center of the fairway on the 18th hole at the U.S. Open, which resulted in a double bogey, when a mere par would have secured his first major victory.

Meanwhile, across the Channel, the Tour de France has completed two of its grueling three weeks, with Monday being a rest day. Frenchmen have already won three stages in this year's Tour, which is an excellent showing thus far for the host country. Presently, Oscar Pereiro, a Spaniard, wears the yellow jersey, symbolic of the leader of the Tour de France. However, lurking in second place, just 89 seconds behind, is American Floyd Landis, who, like his American predecessor, Lance Armstrong, is a testament to perseverance in overcoming adversity in life in order to achieve in sport.

Armstrong's exploits as a cancer survivor are well chronicled; Landis' malady is known to but a few diehard cycling enthusiasts. He is attempting to win this Tour de France with a hip that lacks an adequate blood supply; this causes him severe pain, for which he opts to take no medicine. He may well undergo hip replacement surgery after the completion of this Tour. Here's hoping that Floyd has a happy landing after navigating the Champs Elysees this Sunday.

Lastly, I would like to congratulate Ryan Howard on winning the home run Derby during the All-Star festivities. On the heels of Bobby Abreu's victory last year, this represents consecutive victories by Philadelphia Phillies players in the annual event. As a former player and student of the game, I realize that the deliverer of the pitch can often go unnoticed, but in reality, he is incredibly important. With that in mind, my deep-in-the-money call this week is Ramon Henderson, who is a bullpen coach for the Phillies. Henderson, in his moonlighting job, is now the pitcher for consecutive home run derby winners, Abreu and Howard.


Life is a journey, enjoy the ride.

At the time of publication, Dykstra was long Newell, although holdings can change at any time.

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.