Share Gallery 1/share_gal_1.zip/share_gal_1/BF/BF097.ZIP/NAIC.EXE/MANUAL.TXT

Text File | 1990-10-22 | 16KB | 306 lines

                 ┌────────────────────────────────────────┐
                 │ TURBO SOFTWARE Stock Evaluation Manual │
                 └────────────────────────────────────────┘

NOTE: TO USE THIS SOFTWARE YOU MUST HAVE:
       1) AN IBM OR TRUE IBM COMPATIBLE COMPUTER.
       2) A CGA, EGA, OR VGA GRAPHICS CARD.
       3) An IBM compatible printer.  That means the printer can do
          a graphics screen dump when you hit the ALT/PrtSc keys.
          The chart below uses straight lines for a boarder.
          In SideKick, you would hit CTRL/Q and then G to see
          the IBM extended graphics characters.  Otherwise, the
          outside boarder is made up of the letter "D" going
          across, and the letter "3" going down the sides.

       ┌─────────────────────────────────────────────────────────────┐
       │*************************************************************│
       │*┌─────────────────────────────────────────────────────────┐*│
       │*│      Hit ALT PRT/SC and see if you can print this!      │*│
       │*└─────────────────────────────────────────────────────────┘*│
       │*************************************************************│
       └─────────────────────────────────────────────────────────────┘

       4) Your DOS file, GRAPHICS.COM, must be loaded into memory first.

       5) The print-out will include the date you prepared a report.
          It gets the date form your computer's system clock.  Be sure
          the system clock is set before you print a hard copy.

WHAT IS IT: This program will mimic the N.A.I.C.'s Stock Evaluation and
          and Stock Comparison Forms.  When you request a printout, all
          the information will be printed as a three page report to your
          printer.  The first page is a semi-log plot of you company's
          data.  The second page prints Part 2 through 5 of the Stock
          Evaluation Form.  The third page is a printout of the Stock
          Comparison Form.  Since it only contains data for the current
          company you are studying,  you will overlay the printouts
          later to form one large spreadsheet for easy comparison.
            The program is not copy protected.

             The ShareWare Version is a complete package with one omission,
          It can not save data to disk. To save your data to disk, you need
          a registered version of the program.  Registered Versions cost
          $35.00 Post Paid. The can be ordered from:

                 Paul Bergsman
                 Turbo Software
                 521 E. Wynnewood Rd.
                 Merion, Penna, 19066-1345
                 [phone]

             If you purchase the registered version , you agreed to
          abide by all copyright laws by your action of breaking the seal
          and opening the software package.

FAST START-UP:
   1) This program will print both graphics and text to your IBM
      compatible printer.  In order to print the graphics, you must first
      load a small COM file, GRAPHICS.COM, which is part of your DOS disk.

      After booting you system, switch to the drive with you DOS disk.
      Enter "GRAPHICS.COM" at the prompt.

   2) If you have a CGA card and another graphics card installed in your
      computer, turn both monitors ON.  This will permit you to see all
      graphics on one monitor and all text on the other, at the same time.
      Relax, It's all automatic, you do not have to touch any dip switches.

   3) Insert this disk in DRIVE A.

   4) At the DOS prompt, type A:NAIC.  Registered programs must now
      enter their name and a password.

      4a) You will be asked to enter your name.  Enter your name in
          upper or lower case letters.  PRESS 'ENTER'

      4b) You must now enter your password, unless you are using the
          shareware version.  To get a password,  call
          me at [phone].   If it's a toll call, call collect.
          I will tell the operator  that Mr. Bergsman can not come to
          the phone and to give me a number to return the call.  Leave
          your phone number and I will call you right back and give
          you a password.  I pay for the return call.

   5) To see how things work, at TURBO EVALUATION 's main menu, select A.
      This will permit you to select a data file, ABT.DAT, from disk.

   6) You can now look at the many parts of my software.  Play with the
      data all you want.  None of the changes you make will become final
      until YOU CHOOSE to save the data, with selection E, on the main menu.

HARD DRIVE OPERATION
      TURBO EVALUATION in not copy protected.  You may make as many back-up
   copies as you want, for your own use.  YOU ARE NOT permitted to make a
   copy for your friends, unless it is the ShareWare version. You can copy
   the program onto your hard disk drive if your hard disk drive is C, by
   placing the original disc in drive A and typing the following; COPY
   A:*.* C:*.* If you made the C drive a RamDisk and D is your hard drive,
   type the following: COPY A:*.* D:*.*

RAM DISK OPERATION
    You can save wear on your hard drive and floppies by coping the
    program onto a RAM disk before running   In addition to less hard-
    drive wear, the program will run a lot faster form a RAM disk.
    The main reason for using a ram disk is Program Overlays speed.  The
    program is too big to fit in a 64k segment of memory.  As each section
    of the program is used, that section of code is loaded into memory from
    your disk drive. We could have compiled an EXE file, but the main goal
    was to create a program that would run on as many different computer
    configurations as possible.  EXE files take up more memory than COM
    files.   You must remember not to save newly collected data to your
    ramdisk. Save all data to a floppy or Hard Disk.  If you do forget, all
    your ram disk data will be erased when the computer is turned off.

WHAT YOU GET:
   You will find it helpful to use the NAIC manual.  $10.00 from the
   N.A.I.C.  All the technical terms used in the program are fully explained
   in the manual.  If you have never used the NAIC forms, have no fear.
   TURBO EVALUATION follows the NAIC forms almost to the letter.  You can
   read the manual for a full description of what is going on.

      The main advantage to using the program is in saving time.  The
   computer can do the number crunching a lot quicker than you can on
   paper. You can analyze a dozen stocks in the time it would take you to
   do one analysis by hand.  You can play "what if" over and over again
   without tiring.  The program will make the needed calculations over and
   over without mistakes.  However, YOU still make all the judgment calls.

FUNDAMENTAL ANALYSIS
   The N.A.I.C. uses fundamental analysis, to analyze growth stocks.
Fundamental Analysis suggests that the people who best understand a company
are the company's management.  If we look at the company's performance for
the past ten years, we can get a  pretty good feel for the quality of
management's decisions.  This process only works for Growth Companies not
banks stocks, bonds, mutual funds, ect.  To analyze you need other
criteria.  The investment clubs I am involved with only invest in growth
stocks which meet fundamental analysis standards.  The goal of this program
is to save investors time when analyzing stocks following the principals of
fundamental analysis.

HOW TO FILL IN DATA
   The box near the bottom of the spreadsheet screen keeps you informed
as to which keys are active.  You enter data just like you would with
a pocket calculator.  If you make a mistake, just hit the delete key and
start over.  When a company lost money in one year, just enter that data
as a negative number.  The program knows that you can not plot negative
data on a semi-log chart.  It will make all necessary adjustments before
trying to do a plot.

   You get to play "what if" in this section.  After running through the
program,  you may think "what if the data was different for this year".
You can go back and change any of the data you entered again and again
until the three page report is just the way you want it.  HOWEVER, I
strongly suggest you save the raw data first.  Play all you want with
the numbers AFTER the original data is safely stored on disc.

PART 1, Semi-Log Chart
      The computer will plot a semi-log chart based on the data you have
   entered.  If you have two displays,  the program will automatically
   switch to the Color Graphics Card to display the plot.  After completing
   the plot,  the program will return to the Monochrome Display Monitor and
   display the rest of the report while keeping the semi-log on the
   Graphics display.  The process is automatic.

HOW TO READ A SEMI-LOG CHART
   A semi-log chart plots compounded growth as a straight line. By
LOOKING at the chart,  you can see the following relationships:

 1) E/S growth should not be greater than sales year after year.
    Earnings come from Sales.  If earnings are growing faster than
    Sales then the company has some other income besides selling it's
    products. You should look further for possible problems. Sales should be
    the top most plot.  The program plots values based on growth rates,
    placing the smallest growth rate at the bottom and the largest growth
    rate on the top.  Stock prices are always plotted between E/S and Sales
    for easy comparison.

 2) E/S and Sales plots should be parallel to each other.  In other
    words, their compounded growth rates should be about the same.
    Since the two values are related to each other,  if they are not
    sharing parallel growth, look further to determine why not.

 3) High / Low process should parallel the other two plots.  Stock
    represents  a partial ownership in  a company.  If stock prices do not
    parallel E/S and Sales compounded growth, then you may have an over
    valued or undervalued stock.  If the stock's price is climbing faster
    than the other two, the stock's price is overvalued, if the stock's
    price is climbing slower that the other two, the stock may be
    undervalued.

 4) The general slope of the lines should be straight or curving slightly
    upward. If the lines tend to level off in the most receint years,
    this might indicate a growth company that has run out of steam.

 5) Growth should be steady.  If the plots are irregular, then the
    company does not have a stable 10 year track record.  The next year may
    be very good, or very bad.   You have no way of knowing from their past
    performance.  They may be a good company to invest in, but not according
    to fundamental analysis guidelines.

 6) Actual numbers on a semi-log plot are meaningless.  The Chart shows
    the growth relationship between the three plots, Sales, E/S, and Hi-Lo
    stock prices.  You examine the semi-log plots to see the visual
    relationship between E/S, Sales, and Hi-Lo Stock Prices. You are not
    concerned with actual numerical values. It is the RELATIONSHIP between
    the values that is important. Printing numbers on an axis only
    clutters up the chart.

       You should note that the program changes the actual values before
    plotting, so they fit neatly on the chart.  The numbers within a group
    are multiplied by a constant so they can be placed at a particular spot
    on the graph. That is the same procedure the N.A.I.C. suggests you do
    on their semi-log grid paper.  The program stores the original values
    you entered form the Standard & Poors data sheet.  The values are
    scaled only for the purposes of a clear semi-log plot.  Scaling does
    not alter the relationships in any way.

       The program looks at the growth rate for E/S and Sales, finds the
    smallest growth rate, plots this data starting in the lower left
    hand corner of the chart, and then plots the other values starting
    at a set distance above the first.  Using this method the plots are
    clear and should not run into each other. The High/Low stock prices
    are then plotted half way between the E/S and Sales for ease of
    interpolation.

PART 2, EVALUATING MANAGEMENT
       The computer makes a value judgment here.  First it gets an
    average for the most recent five years.  If the most recent three
    years are very close to the average, then THE TREND IS NOT DOWN.
    There can even be a dip in year eight or nine and still have
    A TREND THAT IS NOT DOWN.  Make sure you add your judgment to the
    computer's when YOU determine if the trend is truely not down!

PART 3, Price - Earnings History
       Part Two is automatic.  Information you entered on the spreadsheet
    is now put through some number crunching and placed in a chart for
    easy use.  Information in this chart will be used in other parts of
    the evaluation, and on the Stock Comparison Form.

PART 4, Evaluating Risk and Reward.
       You get to play "what if" in this section.  Each time you select
    D, ANALYZE DATA, from the main menu, you can choose a different low
    price for the next five years.  Your choice will effect the whole tone
    of the three page report.

       You also get to play "what if" when you select C, UPDATE DATA, from
    the main menu.  Every time you change the raw data, you will change
    the nature of the three page report.

       Once you see the kind of three page report you want on the screen,
    run D, ANALYZE DATA, one more time.  This time, get a hard copy of
    the report.

PART 5, Five Year Potential
       Part Five uses the data from previous sections to compute the
    percent returned on purchase price, and average yield over the next
    five years.

USING THE STOCK COMPARISON CHART

   Rather than having different programs do different things, this one
program is a complete package.   After you have entered the needed data,
the program generates a complete report.  Both the Evaluation Form and
the Stock Comparison Chart are generated at the same time.

   Since the program prints data for only one company at a time,  you may
wonder how the information on the Stock Comparison Chart can be used.

   Simply overlay one Comparison Chart on top of the next forming one
very large Stock Comparison Chart.  After lining the sheets up,  tape
them together.

   If you feel the final sheet is to large,  there are several ways to
make it more manageable.

   First, if you printer allows, you can set it to print everything in
compressed mode.  The graph will not be reduced, but all text will be
compressed.

   Second,  I use a different method for the two investment groups I
am involved with.  Take all the overlayed sheets to a good copy center.
Reduce the whole thing to 8 1/2 by 11 inches.  Make enough copies of
the reduction to give out to all members at your meetings.

   Third,  I take the reduction and make an overhead transparency with it.
The building where our clubs meet provide an overhead projector and a
screen.  Then all the members can follow along on their sheet what I
are pointing to on the screen.

PLAYING "WHAT IF"

   Ten years ago, a company may have had one really bad year.  The E/S are
a negative number ( the company lost money ).  The program will compute a
very large, and distorted, growth rate.  Your research has shown that the
company had a good reason for not making money that year.  You can go
back to the grid and change the value to something in line with all the
other data.  Now your plotted graph, and computed growth rates will look
more realistic.

    All nagative values are kept, unaltered, in the program's data file.
However, the computer might alter the data while plotting to force a fit on
the graph. Log-plots do not like negative numbers.