The stock spin-off of an asset based tracking stock by Liberty Media is still on track for May or June according to reports on a conference call in Variety.

This family of tracking stocks for various parts of the Liberty Media empire calls for a pretty good mental map of who’s doing what, where, when, and how well. What with buying into SiriusXM and writing down a billion three at Starz Entertainment, there is lots going on.

One of the great things about focusing on the spin-off is that in spite of all the talk, the pre-spinoff moves, and whatever other headfakes come along, we are going to have it all in writing when the SEC documents are filed.

Given how this whole group of companies is set up, it is likely to be a challenging read.

When it comes to spin-offs, the challenging reads have been described as the ones that just might be a treasure hunt with the map designed to throw off the less committed.

At least, the weather ought to be warmer by the time the paperwork is ready for us to pore over. Just the stuff for sitting under a tree by the lake with red underlining pencil in hand.

Tags: Liberty Media, lmdia, Sirius, spin-off stock, Starz Entertainment, stock spin-off, Variety

Productivity increases are good, right? Seems like it. And anyway, what choice do we have? We’re all like the White Queen in Alice in Wonderland. If we don’t keep running, we’ll go backward.

Still, while fighting with the automated checkout station at the grocery story this morning it hit me that this job used to be done by a person who got paid, paid taxes, bought things from the grocery store and drugstore across the street, and kept the whole system running.

It’s getting on to 50 years or so since Walter Reuther asked an auto executive who was going on about the wonders of robotic assembly lines of the future whether the robot would also buy the cars. Seems to me that he was on to something

I’ve been told that I just don’t get it and I freely admit that maybe I don’t.

It just seems to me that the offices that don’t need secretaries because of word processors, and the grocery stores and hardware stores that don’t need checkers because of automated checkout, and the fast food places that don’t need people to make lattes because there are machines that do it, are all putting potential customers out of work little by little.

Eventually, who is going to have the money to buy the stuff? The five people left who program the robots simply don’t need that many bags of groceries.

I am just wondering -

• Do the people freed up from doing these tasks really move to better jobs?
• Do the machines really save money after the costs of acquisition and maintenance?
• Are we really “running fast enough” on the innovation, job-creation end of things for it to balance out?

• Does it matter if we do or not?

There have been scholarly books written on the topic, but how many of us have time to read them, given that we are all racing to keep up the the productivity treadmill?

Tags: automation, productivity, robots, taxes

The spin-off stock of Brinks Home Security Holdings (CFL) has been trading for 85 days now and, so far,  the price is going pretty much sideways.   Given the trend of the market now, sideways is an excellent performance.

Judging from a recent article on the spin-off stock CFL in Investors’ Business Daily,  the company is in an excellent position to continue to outperform the market.

Those of us who trade our own accounts do not get any points for beating the market, however.   What we need now is evidence that this is not only an excellent company that is doing the kinds of things that can make spin-offs great investments and contribute to their outperforming, but that its price is going up and will continue to go up long enough for us to make a profit.

In the much over-quoted line from the movie Jerry McGuire,  now we have to say “Show me the money.”

Going back to the same source where we got the fundamental information about Brinks Home Security Holdings’ business, the IBD,  hard as it is sometimes to remember,  about 80% of stocks move in the direction of the overall market trend and that trend is down right now.

Yes, that leaves 20% ( 1 out of 5 ) that are going the other way.   With the right kind of move and the right trading system it is possible to be on the 1 out of  5 side of the probability and still make money,  but it is hard to do.  You’d better be very disciplined and very alert if you want to take that on.

Remember, when the pros talk about their greatest enemy being ego, they are talking about things like believing that we are the smart ones who can pick the  1 of 5 stock and make money while everyone else is losing.

Brinks Home Security Holdings (CFL) might be the one to buck the trend . . . . its price has been trending up since November 12, 2008.

For myself, I am going wait, watching price and volume on CFL and the overall market for some clearer signs before deciding whether to enter or not.  I am definitely watching this one more closely than most.

Tags: Brinks, greed, IBD, impatience, Investors Business Daily, risk management, spin-off stock, stock spin-off

Once a spin-off stock is on my watchlist, I treat it as any other candidate for a trade.

I have said before that I follow Gerald Loeb’s dictum requiring a reason and a move before entering a trade. This mix of fundamentals and technicals makes sense to me and here’s how I do it.

For the spin-off to become the reason several things have to happen

• I read all the press releases and stories based on them that I can find.
• I read the SEC documents as they come out.
• I try to take the potential new entities separately and see how they compare to their competition.
• I try to understand what’s happening in a more general sense.

For me to go ahead, the whole thing has to make sense to me and to look potentially attractive if all goes as planned. I emphasize making sense to me because I am going to have to be the one to make the decision to enter the trade and, more importantly, I am going to have to be the one who decides when to get out.

When I set up my individual trade sheet, right at the top is a section for the reasons for this trade. That way if (when?) I find myself taking some heat on the position I can ask myself

• why am I in this trade?
• how is it doing relative to those criteria?
• are the basis pieces that could make this trade successful still in place?
• has something changed materially that I should be factoring in?

What’s the old saying? When you’re up to your ass in alligators, it’s hard to remember you came to drain the swamp?

Well . . . . when you open up your quote screen and you can’t believe what you’re seeing is no time to forget what you’re there to do. On the other hand, if you can remember what you’re there to do at that point, every single time, you’re a better trader/investor than I.

That’s why I write it down. In block letters. Right up at the top of the trade sheet. And I do read it every time I am having to decide to exit, to pull up a stop, to buy protective puts, or whatever. These are not times to let your primitive fight/flight/faint response run the show.

Which brings me to my last point here. Just because I don’t understand a reason, doesn’t make it not a reason. Take a look at my post about the Liberty Media spinoff and PlanMaestro’s comment.  I went back and looked at that one and I realized that

• he’s probably right about the hidden value in there
• Joel Greenblatt did give a long example of making a ton of money in a very similar situation
• I couldn’t really keep up with Greenblatt’s description of what Mr. Malone was doing (though I recently stepped through it again) and I just can’t get enough of a handle on what PlanMaestro has pointed out to be sure of myself when I have to pull the trigger.
• unless I can get up to speed on this kind of analysis or I can get the PlanMaestros of the world to keep tugging on my sleeve and whispering in my ear that I missed seeing where they hid the money . . . again . . .  I had better steer clear of this kind of reason.

So,  what do I do to decide if there is a good enough reason for me and what constitutes good enough move for me?   More on that in the future.