JCSM Shareware Collection 1996 September/JCSM Shareware Collection (JCS Distribution) (September 1996).ISO/butility/econ2.zip/HELPFILE.TXT

Text File | 1995-10-10 | 19KB | 597 lines

<<Main Help>>

To get into Help, Press F1, or Alt H, or click on
a Help box with your left mouse button.  The help
in Econ is context-sensitive, so you will see a
help screen about the section of the program you
are in.  You can press F1 from any screen.

You may scroll up and down this text or you may
select the Sections button to find a relevent
section for the help you need.  Move to the chapter
you want to see and press Enter or double click the
left mouse button.

You sometimes see an Exit button on the bottom
portion of some screens. You may click on these
buttons with the mouse or you may hit the Esc key
to exit those screens.

To print the entire help file out, quit to DOS and
type "copy helpfile.txt prn".

There is also a manual stored as econ.txt.  You can
print it by typing "copy econ.txt prn" at a DOS
prompt.


<<Software License>>

Read this user agreement before using the software.
By using the software, you agree to be bound by the
terms of this license.

Econ is copyrighted software of DC Econometrics, and
all rights are reserved.  You are authorized to make
backup copies, give away copies, and post it to
public bulletin board systems.  You may not
distribute copies of the output forecasts without
written permission from DC Econometrics.

You agree that the liability of DC Econometrics,
its affiliates, agents, and licensors, if any,
arising out of any kind of legal claim (whether in
contract, tort, or otherwise) in any way connected
with this software shall not exceed the amount you
paid to DC Econometrics for the software and
documentation.


<<Pull Down Menu>>

The main menu is a Pull-Down type of display.
You can access your selection in a number of ways.

If you have a Mouse, just click with the LEFT
Mouse button on the item you want to select.

You may also use the Arrow Keys to select a
Menu item. After you make your selection, hit the
ENTER Key to execute your choice.

A third method is to hold down the ALT Key and
type the Highlighted letter of your selection.


<<Data Entry>>

This gives you 4 choices in a sub-menu:

Add New data
Edit Data
Adjust File to New Baseline
Make ASCII Data File

Please choose one of the four.


<<Add New Data>>

Once a month you need to add new data.  I enter
the numbers from the first Friday of the month.
All 9 numbers you need are published in Barron's
every week in the Market Laboratory section.

Type in a number and press Enter.  If you press
Enter while 0.00 is displayed, the value from last
month will be used.  This can be useful for Prime
Rate which rarely changes.

When you are done entering numbers, click OK to
store the new numbers in the database.  Or click
Cancel to exit without updating the database.

The 9 numbers needed are as follows:

1.  S&P 500 Close:  This is the closing value of
the S&P 500 index, an average of the 500 stocks.
It is not the futures, industrials, utilities, or
financials.  It is the close from the first Friday
in the month.

2.  Prime Rate:  This is the Prime interest rate
charged by United States banks.  It is hard to make
a mistake on this familiar number.  It is the
latest available rate as of Friday.

3.  90 Day Treasury Bill Rate:  This is the latest
week's rate on 13 week T Bills.  It is the Average
Discount Rate, not the Coupon Equivalent Yield.
This is a small but important difference.  The yield
will be higher than the discount rate.

4.  30 Year Treasury Bond Rate:  This is the latest
week's rate on 30 year Treasury bonds.  It is
reported under "Adjustable Rate Mortgage Base
Rates" in Barron's.

5.  S&P 500 Dividend %:  This is the dividend yield
of the S&P 500 in percent.  It is reported in
Barron's under "Indexes' P/Es & Yields".

6.  S&P 500 P/E Ratio:  This is the Price/Earning
ratio of the S&P 500 and is usually reported near
where the dividends are reported.

7.  Gold Price:  This is the current price in
dollars per Troy ounce.  It is reported in Barron's
under "Gold & Silver Prices".

8.  Consumer Price Index (CPI):  CPI is a familiar
number used each month to gauge inflation.  Due to
reporting delays, it lags the others by two months
so October's entries include the August CPI.  This
is reported in "Pulse of Industry and Trade" in
Barron's.

9.  Percent Unemployment:  This is the Unemployment
Rate in percent.  It too, lags the others by two
months and is also found in the Pulse of Industry
and Trade in Barron's.


<<Edit Data>>

The screen display is a scrolling list of data
starting with January 1965. It is arranged with
the most current data at the top of the list.

To ADD an item to the data list, you may Mouse
Click on the Add Record Button, or hold down
the Alt Key and hit the 'A' key.

To Change an item you must first select the item
you wish to change. You can use the up and down
arrow keys to scroll up & down, or the Pg Up or
Pg Dn keys, or hold down the Ctrl key while
hitting the Pd Up or Pg Dn keys to quickly move
to the top or bottom of the list.  You can scroll
up and down by using the mouse. You can use the
elevator box to the right of the screen, you
can place the mouse on the lower or upper portion
of the scrolling table and depress the RIGHT mouse
button to scroll.

Once you have selected the item to change you may
either double click on it with the mouse, click on
the Change Button, or hold down the Alt key and hit
the 'C' key.  Type in the new number.  If you enter
zero, the prior month's number will be used.  This
is done to prevent crazy entries like zero for
S&P 500, an obvious mistake which will ruin the
forecasts.

Print asks you to enter a start number and an end
number.  A list of monthly data will be sent to
your printer.

Exit will return you to the main menu.


<<Change Data>>

You have selected a month to change and you have
selected Change.  Now you see a list of the numbers
for that month.  Move to the number you want to
change and type in what you want.  If you enter
zero, the prior month's number will be used.  Then
select OK to accept the changes, or Cancel to get
out without changing the data file.


<<Adjust File to New Baseline>>

Select which index you want to adjust, the S&P 500
Index or the Consumer Price Index.

This procedure allows you to make adjustments
to all numbers in a data file to a new baseline.
It should be used to correct for possible changes
in the way data is reported. If the S&P 500 Index
is changed by a factor of 10 or is discontinued
and you need to use another stock index, this
routine will adjust the old numbers to match the
new.  CPI was adjusted by the Dept. of Commerce to
make 1982-1984 = 100.  1967 had been the base year.

If such a change ever happens again, this routine
allows you to enter a number from the old index and
an equivalent number from the new index to adjust
all the old data to the new baseline.


<<Change Base Index>>

In this procedure you will actually enter an old
value and a new value. These will form a factor to
be applied to ALL of the values in the selected
data file.  Choose your values carefully. In the
event you wish to return to your original data
just reverse the process. Enter the former new
value as the old index and the original number
as the new index.


<<Make ASCII Data File>>

This writes the monthy data to an ASCII file.
DATAFILE.DAT is the name of the file created.
You can import this ascii file to Lotus 123 or
other spreadsheets to plot or manipulate the
data.  This allows you easy access to many years
of past monthly history.


<<Forecasts>>

There are 3 choices in the Forecast sub-menu:

Current Forecast
Historical Forecast
What-If Forecast

Please choose one of these three.


<<Current Forecast>>

Current data will be used to compute a forecast for
S&P 500, 30 year Treasury bond interest rates, 90
day Treasury Bill interest rates, Gold prices, and
the CPI inflation rate.  All are forecasted 3, 6,
and 12 months ahead.

From these forecasts, asset allocations will be
calculated for Mimimum Risk, Conservative,
Aggressive, and Maximum Return portfolios.

Asset Allocation uses the forecasted returns for 3,
6, and 12 months ahead.  They are averaged together
on an annualized basis.  Dividends and coupon yields
are added in to estimate a return for each asset.

The standard deviations displayed are based on past
history of the market's deviations from the model's
forecasts.

The Asset Allocation page of the forecasts has about
a 6 month time horizon because we averaged the 3, 6,
and 12 month forecasts together.

The Minimum Risk portfolio is always 100% T Bills.
The Conservative portfolio has a standard deviation
of 4.0% or less.  The Aggressive portfolio has a
standard deviation of 7.5% per year.  The Maximum
Return portfolio does not care about risk, and aims
for the best possible return given the restrictions
from Asset Allocation setups.

Standard deviation can be thought of as the average
error of the forecasts.  It is reported based on the
past history 1963 to 1993.  For all you statistical
perfectionists out there, standard deviation is
really the root mean square error.  The average
error is more precisely calculated as 0.80 times the
standard deviation assuming a normal distribution.


<<Historical Forecast>>

This is the same as the current forecast, but you
can display the forecast for any prior month and
year, as far back as the data allow.  The equations
used are the same as the ones used to compute
today's forecasts.  This allows you to check the
fit of the equations to past history.


<<What If Forecast>>

Enter the numbers you want and select OK.  Then
you will see them listed.  Select Print Forecast
to see the results on screen.  The numbers are not
stored in the database, so you can enter weird
numbers if you want to.  Press Enter while 0.00
is displayed to re-use last month's number.

If there is a change in interest rates, or a big
move in the stock market, you may wish to get a
new forecast before it is time to store new data.
The What-If routine allows you to get a forecast
for new numbers without storing them.

Some users run a What-If forecast every week to
stay on top of things.  Or you can enter imaginary
data to see what the effect would be if the Fed
raises interest rates, or if inflation turns out
higher than expected.


<<What If Data>>

The numbers you have entered are shown above.
To see the forecast based on them, click on
the Print Forecast square at lower right.

To add another month of numbers, click on Add
Record.  To change the numbers above, click on
Change.  Click Exit to leave for the main menu
immediately without seeing the What-If forecast.


<<Graphics>>

XY plots can be produced.  You have five choices:

1. Data vs time
2. Actual vs Predicted
3. Predicted and Actual vs time
4. One Variable vs Another
5. Past Trading History

Please choose one of the five.  After you make your
selection, the data will be set up for plotting.
This takes a while, especially on older machines.


<<1. Data vs Time>>

You can plot any of the 9 monthly data files by
date.  The last 5 years are shown.  Select one
to plot with the mouse, or arrow keys and Enter.
Then select Plot to see the graph.

If you want to print the graph, use the Print
Screen key on your keyboard.


<<2. Actual vs. Predicted>>

You select a type of forecast and a Variable, for
example, 6 months ahead, T Bond rates.  Then select
Plot.

This plots the last 5 years of predicted changes
against actual changes.  A correlation coefficient
is calculated and displayed.  The changes are
plotted in percent.  A +10% change in the S&P 500
could be from 400 to 440.  A -10% change in T Bill
rate could be from 5.0% to 4.5% yield, for example.

This allows you to see how accurate the program has
been over the last 5 years.  The correlations for
the last 5 years may differ from the correlations
for the 30 years used to create the models which
are quoted in the manual.

The best possible plot would be a 45 degree line
where forecasted changes equal actual changes.
Typically most points should lie in the upper right
and lower left quadrants.  This shows that
predicted gains were confirmed by actual gains, and
predicted declines led to actual drops.


<<3. Predicted and Actual vs Time>>

First select the forecast time period: 3, 6, or 12
months ahead.  Then select the Variable to graph,
S&P 500 for example.  Then select Plot to see the
graph.

The last 5 years are plotted.


<<4. One Variable vs Another>>

Select a variable for the x axis (horizontal).
Select a variable for the y axis (vertical).
Then select Plot to see the graph.

Each point on the graph is a pair of numbers from
a past month.  The last 5 years are shown.


<<5. Past Trading History>>

This will show you how well the forecasts have done
in the past.  The program predicts each asset, then
picks the one it thinks will have the highest
return, and holds it 6 months.  It checks to see
what the result actually was and reports that return
as its yield.  The results are listed in a table,
including the value of a hypothetical portfolio.

The record from January 1971 to January 1994 is
impressive.  $100 grew to $206,385.  This is a
compound annual growth rate of over 39% per year!

It was achieved by putting all eggs in one basket,
probably a riskier strategy than you will want.
The volatile assets, gold and zero coupon bonds,
are used heavily.  There are 7 losses in the 46
six-month periods.

Sometimes you will see a small gain reported at the
end of the list which has not yet happened.  This is
the projected gain in six months if nothing changes.
It is the bond coupon yield or the stock dividend
yield.

To implement the trading shown here for yourself,
go into setups and raise all asset allocation
limits to 100%.  Then the maximum return portfolio
will be the same as in the past trading history
simulation.


<<Setups>>

There are four choices:

Asset Allocation Setup
Opening Screen Setup
Famous Sayings
Printer Setup

Please choose one of these four.


<<Asset Allocation Setup>>

This allows you to set up the maximum % allocations
for your portfolios. Whatever you enter in will be
used by the program to determine your asset
allocation limits.  If you wish to restore the
program's default values, select Restore Default
Values at the bottom of the screen.

Gold and zero coupon bonds are risky.  They
fluctuate in price more than the S&P 500, T Bonds,
or T Bills.  That is why the default limits are 10%
maximum for gold and 50% maximum for zero coupon
bonds.  The other assets are allowed to reach 100%
allocations.


<<Opening Screen Setup>>

Select Yes or No to turn the opening screen on or
off.  Experienced users often turn this screen off
to save a keystroke each time the program is run.


<<Famous Sayings>>

Scroll up and down to select a saying using the
right mouse button, arrow keys, page up or page
down keys.

Select change to edit a saying.  Deletion is not
allowed, but you can change one you don't like to
one you do.

Select Insert to add a new saying.

Print will dump the entire list to the printer.

Exit or escape returns you to the main menu.


<<Printer Setup>>

You will see a list of printer choices.  LPT1 is
the most common printer and it is our default
choice.  You may also choose another LPT, or COM
device, or send output to a file.


You printer will probably work fine.  If not:

It is impossible to tell exactly what type of
printer you may have.  Lines per page typically
vary from 59 to 66.  Most printers use the ascii
character with a decimal value of 12 for a form
feed.  13 is a carriage return, and 10 is a line
feed.  These are the defaults we have assumed.

If your printer is ancient or weird, you can change
these values by editing the PRINTER.CTL file.  Make
a backup copy of the PRINTER.CTL file called
PRINTER.BAK so you don't lose everything.
Type: copy printer.ctl printer.bak

Now edit PRINTER.CTL.  You will see:

PRINTERS
1 GENERIC PRINTER
PORTS
CONTROLS
1 CARRIAGE RETURN
2 FORMFEED
3 LINEFEED
SEQUENCES
1 1 '<13>'
1 2 '<12>'     (change this one if needed)
1 3 '<10>'

You can change the 12 above to whatever your form
feed character is (see your printer manual).
Most users will never have to change this file.


<<Registration>>

Please register your copy of Econ.  Just select
Registration from the main menu and fill in the
blanks from your keyboard.  Then Print the form.

You will receive a printed manual describing this
program and all of its features. You will also
receive our most current version of the software.
In addition, you will receive a current set of
data files containing all of the latest monthly
data entries.

If we write a new version of Econ, we will mail
information about the new program to all registered
users.

Econ is shareware, not freeware.  It is distributed
via bulletin boards, catalogs, and rack vendors.
It is made available by them on a try-before-you-buy
basis.  If you are using the program regularly,
you are expected to register it.  The author
receives no money until you register.  Shareware
catalogs and rack vendors do not pay royalties to
authors.

If you ordered this program directly from DC
Econometrics and paid $49.95, you are already
registered.


<<Quit>>

You can choose to quit by selecting Quit with your
mouse, or with arrow keys and Enter, or with Alt Q.

It will ask "OK to Quit?   Alt+K".  Press Enter or
click the question with your left mouse key and you
will exit the program and go to DOS.  Alt K will
also quit.


<<Viewing Screen>>

To View a report on the screen you may use the up
and down arrow keys to scroll up and down, or you
can place the mouse in the lower half of the screen
and click the right mouse button to scroll down or
place the mouse in the upper half of the screen to
scroll up.  The page up and page down keys work
too.


<<System requirements>>

You need 640K memory, DOS 3.3 or above, and a hard
disk or 2 high density floppies.  A mouse and a
color screen are recommended.

Some old 286 machines do not have enough memory.
TSR (terminate and stay resident) programs can eat
up free memory.  You need at least 512K free memory
to run Econ 2.0.  Type chkdsk at a DOS prompt to
see how much memory you have and how much is free.