Some of my most profitable investments are not based on stocks purchased but on stocks acquired via "spin-offs" from companies already owned. A spin-off is created when a firm sheds a business unit and transfers ownership to existing shareholders. The amount of shares you receive in the new entity is based on the number of shares held in the former parent firm. Spin-offs are usually distributed tax-free: taxes are not due until shares are sold. But you're not getting something for nothing. It is like taking a dollar from your wallet and putting 72￠ of it in your left pocket and 28￠ in your right. It is the same pie, only divided differently.
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