Tyco International, (TYC), announced in late April of this year that it would do a stock spin-off of its electrical & metal products business in 2011,  and we haven’t heard much if anything about it since.  Apparently, the number of pieces that have to come into place for a spin-off stock to actually come into existence is mind boggling.  It takes a lot of work, a lot of time, and there really isn’t anything for the company to say until they get it all in order to the satisfaction of the SEC.

This points up one of the difficult parts of stock spin-off investing, at least for those of us with ADD, and that is the grand pace at which these things proceed.  The themes of greed and fear have been beaten into the ground by anyone with anything to say about investing, but impatience and loss of focus really ought to be right in there with the big two.

You have to remember what you are watching and you have not resist the urge to try to “push the river”.  Each kind of trading has its own pace and flowing with that makes the different between success and failure in any particular style. When it comes to spin-off investing it sounds simple, and, I guess it is for those of you with the right temperament.  For the rest of us, watch lists and calendar alarms and taking a deep breath and waiting for the trade to come to us are vital.

So, keep your eye on Tyco’s upcoming spin-off.  We won’t be able to assess its potential until they give us some data on what they are going to do.  If that looks good, then we can wait to get confirmation from price and volume.

Tyco Describes Itself As: ” a diversified, global company that provides vital products and services to customers in more than 60 countries. With more than 100,000 employees worldwide, Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products.”

Tags: impatience, spin-off stock, stock spin-off, TYC, tyco International

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

Arvin Meritor (ARM) says that it is re-thinking its previously announced stock spin-off of its car parts unit and cutting jobs in light of its projections of future business conditions.

Seems like a sane thing to do given not only the level of current economic slowing down and uncertainty.

Any investing model is based on assumptions about how prices of securities are arrived at.  In times like these when the  rules of the game seem to be in flux,  maybe  to eventually settle down and go on more or less as before or maybe to change significantly, perhaps it is best to stay alert, watch and wait.  This goes for individual companies as well as for us.

The real trick, it seems to me, is to not “go to sleep at the switch” and miss the signs that a new trend is shaping up while trying to not get impulsive.

I believe it was Gerald Loeb who said many years ago that for us investors that it is not just fear and greed that push us into bad decisions, but also impatience.

Staying patient and awake.  That is the challenge now.

Tags: ARM, Arvin Meritor, fear, greed, impatience, spin off, spin-off stocks, stock spin-off