Spin-off stock Clearwater Paper, CLW, has been separate from Potlatch Corporation since mid-December 2008 and it is time to check on how it has been doing since.  Looking at the chart below, the first question that is running through my mind is ‘Why isn’t there a disclosure of ownership interest on the bottom of this post?’

Splits:none                                                                                        chart from Yahoo Finance

Clearwater hasn’t done too badly for its shareholders in the nearly year and a half on its own, has it?  Showing an almost classic spin-off stock chart picture, the price dipped immediately after the spin-off, cosnsolidated and moved higher, only to make one more nerve jangling trip to the down side before started a potentially very rewarding trip upward for those who were on board.

So, why might someone not have taken advantage of this “secret” situation that was right out there in plain sight?  There were lots of “good” reasons for not taking action and clearly they weren’t good enough.

OK, Fall 2008 wasn’t a great time to be thinking about getting into a new long position . . . or was it?  Not many people were, but when was the last time that very many people were making very much money?  And, even if you had had the nerve to put on even a small trade, how would you have dealt with that second dip?  Would you have re-entered on the next move up?

The central point here has to be that the times during which it is hardest to get into a good trade are exactly the times when you have to have the mental discipline to shut out all the crowd noise, decide what your system calls for you to do, and do it!   By the time everyone knows it’s a good idea, it is too late.

Finding potentially rewarding situations is not the biggest challenge.  Setting aside all the internal barriers to making those trades is the big challenge. 

And that, my friends, is the real frontier here.  But that’s no secret either.  What apparently is a secret is what you have to do today, tomorrow, and the next day to build that self-knowledge, self-management, self-discipline when it’s clear you need more.

Tags: Clearwater Paper, CLW, emotional self-management, how-to, PCH, Potlatch Corp, self discipline, spin-off stock, stock spin-off, trading, trading discipline, trading plan

It has been about a year since we looked at Brinks Home Security Holdings, ticker CFL.    At that time it had been around for about 90 days and had its price had gone pretty much sideways.  How’s it doing now?

Well, the above chart from Yahoo Finance that shows CFL compared to the parent company, Brinks,  BCO pretty much tells the story for this one so far.

The two charts underscore the importance of – -

• knowing when you will decide that a trade isn’t doing what you’d expected going and then sticking to it, in the case of BCO
• and,  following your plan when things aren’t happening quite as quickly as you had hoped, in the case of CFL

Whether you had picked the parent or the spin-off stock, it is likely that some emotional self-management would have been called for in order to exhibit the kind of trade discipline that make for a long term ascending equity curve.

Now some including the Motley Fool are suggesting that it is time for the parent to shine.  For the sake of those who held onto BCO after the stock spin-off of the home security business, let’s hope they are right.

Tags: BCO, Brinks Co., Brinks Home Security, CFL, emotional self-management, spin-off stock, stock spin-off, trading discipline