Capital Gainz - Newsletter #5

             Capital Gainz Newsletter #5
                  January 15, 1999
                     Dave Cohen
                  AlleyCat Software
In these newsletters, I'll provide useful hints and tips for
Capital Gainz. To make things easy for email, these 
newsletters will be plain old  ASCII text.

If you want to be removed from the mailing list, send me a 
request via email.

All prior newsletters can be found on our Web site.


  1) Version 6.0 Released
  2) Version 6.0 Cash Accounts
  3) Report Options
  4) Year 2000...Again
  5) Update on Price Updates
  6) Technical Support
  7) Printing Help Files in Version 6.0
  8) Tax Tip: Trading Up Basis
  9) Online Brokers: Fund Centers
 10) Symantec Ghost


1) Version 6.0 Released

We officially released Capital Gainz 6.0 on 12/22/98.
Electronic upgrade notices have gone out to everyone
that we have an email address on file for, and postcard
notices will be mailed out to other users shortly.

For a list of new features in version 6.0, see 
Newsletter #03.

The upgrade cost is $25 if you download the program from
the Web site, or $35 if you want diskettes. Capital Gainz
has expanded to 3 diskettes, so we raised the cost to
get physical diskettes to $10 - I'd like to prod as many
users as possible to go the online route.

To upgrade electronically, you need to:
- Download Capital Gainz 6.0 from the Web site
- Pay for the upgrade and receive a new username/usercode

Username/usercode values from prior versions will not 
work - you must use a new usercode we will generate and
assign to you. The new version should not be installed over
an existing version without a new username/usercode, since 
that will cause only the Evaluation version to be 
installed, and this version will not upgrade existing data.

Note that anyone who purchased or upgraded Capital Gainz
since 9/1/98 is entitled to a free upgrade (unless you
want diskettes, in which case it will cost $10).


2) Version 6.0 Cash Accounts

(This is a repeat of a topic in Newsletter #04, but I felt
it was important enough to warrant a command performance.)

Capital Gainz 6.0 will let you define a security as a Cash 
Asset Type. This means the security has a fixed price of
$1, and Shares always equals Amount. Recording a purchase
or sale only requires entry of the date and the amount.
But the greatest advantage is in reconciling transactions:
Purchases of Cash Types are no longer 'converted' to Sold

For example, if you had:
  1/1/98 Buy  $100
  2/1/98 Buy  $100
  3/1/98 Buy  $100
Capital Gainz would record 3 Buy Shares Records:
  1/1/98 $100
  2/1/98 $100
  3/1/98 $100
In prior versions of Capital Gainz, where cash types
were treated like any other security, if you sold $150
on 4/1/98 Capital Gainz would create
1 Sell Shares Record:
  4/1/98 $150
and also convert some of the Buy Shares Records,
leaving you with:
  2/1/98 Buy  $50
  3/1/98 Buy  $100
This worked fine, until you had to go back and adjust
something. Then, it was difficult to find and change the 
appropriate records, even with the Activity History Report
in hand. The only way to get it exactly right involved
deleting/unselling some Sell Shares Records. Not a very
enjoyable process.

With Capital Gainz 6.0, using the above scenario, after 
recording the 4/1/98 sale you would have 3 Buy Shares 
  1/1/98 $100
  2/1/98 $100
  3/1/98 $100
and 1 Sell Shares Record:
  4/1/98 $150
As you can see, fixing or adjusting cash accounts is much,
much easier with 6.0, since Buy Shares Records do not
get converted to Sell Shares Records.

This approach is only possible because we know:
- Sales cover purchases first-in/first-out
- There is a constant $1 price
- There are no gains or losses

In fact, all buy, sell, and distribution activity is
presented in a single chronological activity table for
Cash Types. Thus, you can modify any type of activity
for a Cash Type from a single table.

Two important points to keep in mind about the new
Cash Type:
- You can convert existing securities, such as money
  market accounts, to Cash Types.
- Cash Accounts for portfolios can only use Cash Type
So, if you have a Cash Account for a portfolio, the 
Capital Gainz 6.0 installation process will inform you 
that you need to convert the security to a Cash Type,
then reset the portfolio's Cash Account.

To find out more about Cash Types in version 6.0, check
out the following two topics in Help:
- Contents, Cash
- Contents, Program Overview, Cash Assets and 
  Cash Accounts

The Cash Type concept was one of those ideas that I
wished I'd implemented a long time ago. Very early 
in Capital Gainz history, I didn't see users tracking
money market accounts - that's what checkbook managers
like Quicken were for. Then, as I saw users doing this
regularly, I assumed that using a plain security with
a $1 price would work fine. It sort of did - until it
came time for inevitable adjustments to active accounts.
Then, management became difficult - I found this out
first hand when I started tracking my own money market
accounts in Capital Gainz.


3) Report Options

While some investment programs provide only a few simple 
reports that you can customize, Capital Gainz provides
a number of complex report types. We've looked into 
allowing users to customize reports further, but there are
two stumbling blocks:

- Rather than reinvent 'report writers', it makes more 
  sense to find an existing report writer product that 
  will work with Capital Gainz data. Unfortunately, adding
  such a feature would add substantial costs to Capital
  Gainz - possibly an additional several hundred dollars!

- Report writers are complex to use, and I would guess
  that a majority of users would not take advantage of one
  due to the complexity.

Thus, we offer a variety of summary and detail reports,
and also include some options under Config/Report Settings:

- Use Brief Formats: If this option is set, Capital Gainz
  will only provide the most essential data for each 
  report, with a goal of one line per item. This can 
  conserve paper, or provide you with a quick, uncluttered
  overview. This is especially useful for the Portfolio
  Detail and Performance Reports.

- Use Wide Formats: If this option is set, reports print
  in landscape mode, allowing for much longer lines. Thus,
  reports that may require multiple lines per item can
  be condensed into one line per item. Currently, this
  option only applies to the Portfolio Detail Report.

- Show Subtotals: If this option is set, Capital Gainz
  will print out subtotals on reports, where applicable.
  For instance, the Portfolio Detail Report will subtotal
  by Broker/Inv Co, the Global Security Report will show
  all Local Securities linked to each Global Security, 
  and the Activity History Report will show a running
  subtotal after each transaction.

- Combine Portfolios: If this option is set and you select
  multiple portfolios for a report, then all of the
  portfolios are combined into one. For instance, the
  Portfolio Detail Report can show a complete sorted list 
  of all holdings across all portfolios, or all portfolio
  transactions can be combined into a single Tax Report.

- ASCII File Output: If this option is set, Capital Gainz
  will output the report data to a text file. This is 
  useful if you want to further manipulate the data, save
  data on your disk, or you are having problems with
  your printer driver. Also, reports in this format will
  print much faster on inkjet printers, and will conserve
  paper since there are no page breaks.

- Date Range: If you set a date range anywhere in Capital
  Gainz, reports will restrict data to only those
  transactions that fall within the given dates. Also,
  for detailed reports like the Performance Report,
  securities with no activity in the specified date range
  will be omitted.


4) Year 2000...Again

I discussed the Year 2000 issue at length in 
Newsletter #03. The long and short of it is that Capital
Gainz is Y2K compliant. While versions 4.0 through 5.2
only accept 2 digits for the year, Capital Gainz is smart
enough to determine the correct century - even if your
BIOS has problems. Version 6.0 accepts 4 digits for the
century. I don't know of any problems with Year 2000
issues in versions 4.0 through 5.1, but I can not affirm
that they are 100% ready. Versions 5.2 and 6.0 will not 
have any problems.

I can't say the same for the Windows operating system.
From what I've seen and read:
Windows 3.1: Will likely have significant Year Y2K
Windows 95: There are Year Y2K problems, but I'm not
  sure of their severity and whether or not Micrsoft
  plans to issue fixes.
Windows 98: Should be Y2K compliant, but don't be
  surprised if Microsoft issues maintenance releases.
Windows NT 4.0: The most recent maintenance patch, SP4,
  included a special Y2K update.

PC Magazine has a pretty nice site devoted to Y2K issues,
and you can even download utilities to check out your

I just saw the following extremely humorous 'press release',
but understand it has made the rounds on the Internet:

    Redmond, Washington (API)
    Sources at Microsoft today annouced a delay in the 
    projected release of the new Windows 2000 operating

    The product is now expected to ship some time during 
    first quarter 1901. 


5) Update on Price Updates

Some interesting news on the price update front:

- You can get historical quotes from Yahoo, but it is not 
  especially easy. (However, I don't know of any other
  site that offers free downloadable historical quotes.) 
  Since the historical data is in a difference format, 
  importing into Capital Gainz will require some work. 
  If you want to experiment with this anyway, to get 
  historical quotes:
  - After retrieving quote in Yahoo, select Views:Detailed.
  - Under the chart, select the period: 1d, 5d, 3m, 1y, 
    2y, or 5y.
  - Under the new chart, choose Table: Daily, Weekly, 
    or Monthly.
  - Download the table to spreadsheet format.
  - In the spreadsheet, add a column for the symbol, 
    then change the date column's format to mm/dd/yy or 
  - Save the speadsheet data to CSV format.
  - In Capital Gainz, specify the format for the data, 
    then update prices from the CSV file.

- We are investigating automated price updates from
  Internet sources, where Capital Gainz will get prices
  and news from a site while you are connected to the 
  Internet. I've got some information about Reuter's
  price data application interface, and it would not
  be particularly difficult. The hard part, though, is
  finding anyone at the company who will even respond to
  my email requests! I'm not a pushy person, and can only
  expend so much effort to get help - even though in this
  case, it would be very beneficial to the other party.


6) Technical Support

I dropped the Message Board on the Web site since it wasn't 
getting very much traffic. I STRONGLY prefer that technical
support issues and questions go through email - that way,
I can answer them without interruption, and you will have
printed answers that you can refer to. Plus, I can even
recycle answers to duplicate questions from multiple users.
I really, really hate the telephone - it's very disruptive
for people doing technical work that requires any kind
of concentration. Sorry, but that's the way us techno-
weenies are.


7) Printing Help Files in Version 6.0

I've received requests for a printed manual, but this is
simply not gonna happen. To gain a decent cost advantage, 
you need to print very large quantities. However, the
worst problem is that the manual is usually out-of-date
by the time it is printed. Instead, I've composed a very
extensive online help system, with both narrative 
explanations (for instance, common operations are 
discussed under Contents/Program Overview) and reference
text. Many companies, including Microsoft, are going the
electronic-only route for documentation. One huge advantage
of electronic documentation is that you can use search
facilities that are far better than any book's index can

However, some user still wanted to at least print out the
Help files. Unfortunately, in prior versions of Capital
Gainz, if you chose to print all Help topics, they would
print out in alphabetical order by title - which resulted
in a very jumbled and out-of-order document. In Capital
Gainz 6.0, I forced the Help topics to be sorted in their
logical order, as they would appear in a printed manual.
Thus, if you hate trees and want to print 300 plus pages,
you will end up with a nice document using version 6.0.


8) Tax Tip: Trading Up Basis

Most of us know that selling a stock or mutual fund for
a loss, then immediately repurchasing it in order to
capture the loss for tax purposes, is not allowed. This
is called a 'wash sale', and the IRS disallows the loss
and specifies that you must adjust the basis of the
shares just bought.

However, you can do the opposite: sell a stock or fund
for a gain, then immediately buy it back. This is often
referred to as 'trading up basis'. Why would you want
to do this? Well, you can use any losses in a given year
to offset sales in that year, plus apply up to $3000 to
offset other income (for joint returns). And, any amount
above that can be carried over to future years, as long
as necessary. However, if you have losses in excess of
$3000 over gains, you may want to take advantage of them
immediately, by capturing the gain tax-free.

Personally, I often ride my winners and cut my losers -
but sometimes I'm too slow in cutting the losses. 
Thus, even though 1998 was a great year for me, I had
realized losses for the year in excess of gains by over 
$3000. So, I sold some America OnLine and bought
it back immediately. The trading cost was minimal, since
I trade online.

Incidentally, if you're doing more speculative trading
rather than investing in mutual funds or blue chips,
I've learned that it's a good idea to set a floor at
which you will automatically sell - for instance, if
the stock goes down 10%. If you think about it, with
this approach a few good gainers can offset a lot of

Sorry this isn't in time to help with 1998 taxes,
but perhaps it will come in handy in the future.


9) Online Brokers: Fund Centers

A lot of online brokers now support 'Mutual Fund Centers',
where they allow you to purchase shares in a wide variety
of funds and hold them in your online account, rather than
having separate accounts with multiple mutual fund 
companies. I believe Charles Schwab pioneered this concept.

While it's a good idea in theory, in practice there are
problems. The first problem is that some brokers charge
you additional transaction costs, even on no-load funds.
If you plan on dollar-cost averaging with a few hundred
dollars a month, this can run up some costs - it's like
turning a no-load fund into a load fund. I have an E*Trade
account, and most of their no-load funds can be purchased
with no transaction costs.

However, E*Trade is clueless about how mutual funds are
used. In my opinion, a mutual fund's primary purpose is
for an investor to select a type and style that he/she
is comfortable with, make an initial purchase, then build
on the investment through periodic purchases. E*Trade
seems to have missed out on the last point, though. I
recently bought a fund through E*Trade online, and the
initial purchase worked fine. However, when I went to add
to the fund, the online form failed - it required me to
purchase enough to meet the initial requirement, even 
though I already made the initial purchase of the fund
earlier! When I contacted E*Trade, they told me that I
could do what I wanted, but only over the phone. So, 
now I was demoted from online trading to phone-hold 
trading - at least they didn't charge a commission for 
the phone transaction.

Checking my account, guess what E*Trade did. Instead of
combining the two purchases, they listed them separately,
just like if I purchased two different stocks. Now if I 
make monthly investements, the list of holdings will get 
real ugly, real fast.

How could a company roll out such a big mutual fund center,
yet have no idea what mutual funds are used for? Anyone
else have similar experiences with other brokers? I do
know that Fidelity treats funds correctly - but, as the
universe's largest mutual fund family, they better!


10) Symantec Ghost

I recently swapped out a hard drive, and wanted to set
up the new drive just like the old one - I did not want
to go through setting everything up again. Even though
I have a very nice DAT tape drive, it isn't quite capable
of producing the 'mirrored' results that I wanted.

Well, I found a real nice tool on Symantec's Web site, It's called Ghost, and it makes
an exact mirror of a specified disk partition. So, I simply
made mirrors of the partitions from the source drive,
copied then to tape, replaced the old drive with the new
drive, copied the mirrors to the new drive, then expanded
the mirrors to recreate the partitions exactly.

The only real issue to work around is the partition image
size, which of course can be pretty large - although there
is a compression option.