[boneil55]

[ QUOTE ]
A similar method I've heard of is spin-offs, where the composition of the shareholder base changes rapidly, and can lead to some predictable changes in volatility.

[/ QUOTE ]

Spin-offs are a great place to look for investment ideas. However, it is not due to predictable changes in volatility. Instead, the theory is based on "artificial" selling. That is, if someone or some fund owns stock in IBM, for example, and IBM spins off a tiny subsidiary, a large amount of those someones or some funds will most likely sell the spin-off either because they do not want to own a small company they know nothing about or are not allowed to own a small company (i.e. a large cap mutual fund). Those sales "artificially" depress the stock price, and may, in certain circumstances, drive the price below, perhaps far below, the spin-off's intrinsic value, thereby creating an investing opportunity.

--Brian