Capital Gainz - Newsletter #7

             Capital Gainz Newsletter #7
                   July 4, 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) Price Updates from the Internet
 2) Historical Prices from the Internet
 3) Privacy Statement
 4) Easier Download Format
 5) Sending Screenshots
 6) Data Directory
 7) Security Types
 8) Portfolio Allocation
 9) Grouped Sales in Tax Reports
10) Total Return vs Performance

1) Price Updates from the Internet

Capital Gainz recently added the capability to retrieve
prices from the Internet, updating your data to reflect
current prices. This feature was added in version 6.0d,
which is a free upgrade for any registered v6.0 user
(free if downloaded, but for disks it costs $10).

There are really two options for getting prices:
  - Retrieve prices and update your Capital Gainz data
  - Retrieve prices and view them in your Web browser

This feature is very easy to use:
  - Be sure that you set the Exchange Symbol value for
    all Global Securities that you want to get prices
    for. (Global Security Table, Change security.)
  - Select Prices/Get Prices from Internet.
  - In the upper right corner of the form, you can select
    which securities to get prices for. If you select
    a subset of all securities, then use the Save button
    after making your selections. This saves them to a
    file that is retrieved every time you pull this form
    up in the future.
  - Be sure you are connected to the Internet. You don't
    have to have a Web browser running, but must be 
    connected. Capital Gainz will not dial out.
  - Choose the Get button to get prices and update data,
    or the View button to display prices in a Web browser.
    (For the View option, Capital Gainz will start up your 
    default browser.)

Some tips:

  - If a global security's Exchange Symbol field is
    blank, then it will not be included in price

  - The price update feature uses Yahoo! for prices,
    and they may use different symbols than you are
    used to for indexes. For example:
      Dow Jones Industrial Average: ^DJI Internet Index: ^DOT
      NASDAQ 100 Index            : ^NDX
      NASDAQ Index                : ^IXIC
      Standard & Poor's 500 Index : ^SPX

  - If you need to look up a symbol, use the View
    option. At the top of the Yahoo! page displayed
    there is a function to look up symbols.

  - If you want to keep prices up in your Web browser
    throughout the day, use the View option to bring
    up the Yahoo! page with all of your symbols' prices.
    Keep the Web browser running, and whenever you want 
    a quick update, just use the browser's Refresh 
    button. Capital Gainz does not have to remain 

  - If you sometimes update from using the Get Prices
    from Internet feature, but also sometimes want to
    read in a price file emailed from, say, InfoBeat,
    then your index symbols will likely be different
    for the two sources. In the Global Security Table,
    look at the Save Exchange/Global Symbol Mapping
    and Retrieve Exchange/Global Symbol Mapping
    to save an retrieve mappings between exchange
    symbols and global securities. This is a feature
    added in v6.0e.

  - If you add a new Global Security but its price is not
    being retrieved, then check your list of selected 
    securities to download. This is set in the upper right
    corner of the Get Prices from Internet form. If you
    have Saved a list, then any new securities must be
    tagged in the list, and the list needs to be re-Saved.
2) Historical Prices from the Internet

Capital Gainz 6.0e added the capability to retrieve free
historical quotes from the Internet. I did not send out
a general mailing on this. As usual, this is a free
download for registered 6.0 users, or can be ordered for
$10 to cover disk and mailing costs.

There are actually three options for getting historical
  - Get historical prices and read them into Capital
    Gainz, so they are available as Price History.
  - View historical prices in your Web browser.
  - View a 1 year price chart in your Web browser.

Like the current price retrieval feature, historical price
retrieval is very easy:
  - Select Prices/Get Historical Prices from Internet.
  - Specify the Global Security symbol to get prices 
    for. You can only get prices for one security at a
  - Specify a begin and end date for prices.
  - Specify a frequency: Daily, Weekly, Monthly.
  - Be sure you are connected to the Internet. You don't
    have to have a Web browser running, but must be 
    connected. Capital Gainz will not dial out.
  - Choose the Get button to get prices and read them
    into Capital Gainz, the View button to display the 
    list of prices in Web browser, and the Chart button
    to display a 1 year price chart in a Web browser.
    (For the View and Chart options, Capital Gainz will 
    start up your default browser.)


  - See the Tips listed above for retrieving current
    prices, especially regarding index symbols. The
    historical price retrieval feature also uses

  - If you want to read prices into Capital Gainz, I
    stringly suggest going with Weekly or Monthly

  - After selecting the Chart statement to view a 1
    year price chart in your Web browser, the Yahoo!
    page offers quick access to longer or shorter
    period charts.
3) Privacy Statement

A lot of discussion is going around lately concerning 
privacy on the Internet. This is not something new to the
Internet - many mail order companies, magazines, etc. 
resell customer information so you get tons of junk mail
and pestered on the phone. (Never give out your phone

My policy is that I never have and never will resell or
distribute in any way customer name, address, phone, email,
or any other information. I recently added secure Internet
ordering on the Web site. It uses an encrypted secure 
Web connection to receive order information and respond for
verification. This order is then encrypted at the Web site 
and emailed to me via PGP, and I unencrypt it with my 
private key.

Incidentally, if you want to see which companies do resell
customer lists, a neat trick is to use a specific name when
dealing with a company. For example, if I subscribe to "Gum
Chewers Magazine", I might use the name "Dave A. Cohen", 
or "A. Cohen". When I get junk mail addressed to that name 
- or when a telemarketer asks for "A. Cohen", guess where 
they got their information from?
4) Easier Download Format

At one time, ZIP compression was a standard format for
distributing files online. More and more now, probably due
to the large number of new Web users, companies are 
distributing software using 'self-extracting archives'. 
This simply means that the software is compressed, probably
with ZIP compression, but then a small decryption routine
is tacked on which will unencrypt the data so a separate
UNZIP program is not needed.

I resisted self-extracting programs for some time. A few 
years ago, bulletin board systems often refused to accept
these, as it was too easy to cause computer virus infections
by executing a program. They preferred that software authors
send ZIP files, so downloaders could UNZIP them, then scan
the unarchived files for viruses before installing anything.
Thus, I distributed Capital Gainz for a long time as a set 
of installation programs inside of a ZIP archive - users 
that wished to download it had to have a program such as 
PKZip or WinZip available to unarchive it before installing 
it. This was a stumbling point for many new Web users, even 
though I tried to make it a pleasant - and educational - 
experience by explaining the process and offering links to
UNZIP  programs, as well as a free UNZIP program, from our 
Web site.

However, the ZIP format caused too many problems for too
many users. Since many users have virus scanning software 
that can now check within ZIP or even self-extracting files,
I finally decided to distribute Capital Gainz as a 
self-extracting archive. So, no user with Internet access 
out there has any excuse (OK - maybe a really slow or really
bad phone connection is reasonable) to not be able to 
download Capital Gainz. I don't like making disks, plus if 
you can download Capital Gainz, you can save a few bucks and
be able to instantly download new (free!) updates such as 
6.0d which allows current price retrieval from the Internet,
and 6.0e which allows historical price retrieval from the 
Internet. It's just too easy:
  - Go to the Web site.
  - Click on Download Capital Gainz on the top
    navigation bar.
  - Click on Capital Gainz 6.0 for Windows in the
    displayed table.
  - When queried by your browser, choose to save the
    file on your PC's disk.
  - When the download completes, just use Start/Run to
    run the downloaded CGZ60.EXE file.

As a side note to anyone interested in distributing and 
charging for software: If you don't use an installation 
building program like InstallShield or Wise Install, 
be careful before distributing self-extracting archives
built directly from a program like PKZip. I know that
at one time this was only legal if you paid PKWare a
distribution fee, since you were actually including some
of their technology in your self-extracting archive.
5) Sending Screenshots

Often, if you have a question on Capital Gainz or want to 
report a problem or an error, it would be nice to include
a screenshot to help explain things. If you don't have a
screen capture program like PaintShop Pro (highly 
recommended - I find it indispensible:,
you can still get a shot to send:

  - Make sure Capital Gainz is the current window for
    input (if the title bar is not highlighted, click
    on it to make it current).
  - Press the Alt and PrintScrn keys at the same time.
    This captures an image of the current window, and
    copies it to the Windows clipboard.
  - If your email program can send HTML files (if you
    don't know, try the process below and see):
       Start a new email message, write any text, then
       use Ctrl-V (or Edit/Paste) to paste the clipboard
       contents into the message. If the window image
       does not appear, then you need to take the next 
    If your email program can not send HTML files:
        In Microsoft Word, open a new document. Use Ctrl-V
        to paste the window image from the clipboard into
        the document. Save the Word document. Start a new
        email message, and use your email program's Attach
        File to Message to attach the Word document. (If 
        you can ZIP the document first, that would be nice
        since it would be much smaller.)
  - Send the email to me.
6) Data Directory

Capital Gainz does support configuration of a directory
separate from the main program directory to contain data.
If you don't need to do this, then don't use it - it
can cause some confusion when you are trying to determine
problems if you set up a separate data directory but 
forgot about it. Most users run just fine with the 
default configuration, where the data is stored in the
same directory as the program files.

To use a separate data directory:
  - Create the new data directory. For instance, use
    Windows Explorer to create C:\CapgnzData.
  - Copy your current data files from the program
    directory to the new data directory. For instance,
    use Windows Explorer to copy all *.DAT and *.K01
    files from C:\Capgnz to C:\CapgnzData.
  - Start up Capital Gainz. Select Config/System Config,
    and set the Data Directory value to the data
    directory you are using, such as C:\CapgnzData.
7) Security Types

In Capital Gainz, you link Local Securities to Global
Securities, and Global Securities are associated with
a Security Type. You can add, change, or delete Security
Types, and there is even a feature in the Security Type
Table to add Morningstar Mutual Fund types. Security Types
are grouped under more general Classes that are fixed 
(you can not add or change Classes): 
  Stocks, Stock Funds, Bonds, Bond Funds, Bond Funds, 
  Cash, Other, and Other Funds.

Security Types are useful for two main reasons:
  1) For Portfolio Allocation reports and graphs.
  2) For tax report treatment.

For the Tax Report, if the Local Security's Tax Exempt
(IRA) checkbox is set, then no sale or distribution 
data is reported. Notice that this means the security
is in an IRA or similar tax-exempt account, not that
it is a tax free security like a municipal bond - which
is set in the Security Type.

For a Security Type, the Change button lets you:
  - Assign it to a different Class.
  - Assign a 4 character code.
  - Assign a description.
  - Specify whether securities of this type normally 
    receive Distributions or Interest. Prior versions of
    Capital Gainz would only allow a security to receive 
    Dividends or Interest, but not both. V6.0 now allows
    you to record Dividends and Interest for a given 
    security. For example, my E*Trade money market fund
    pays both Dividends and Interest.
  - Specify whether Dividends and Interest received from a
    security of this type should be omitted, included as 
    taxable, or included as non-taxable on the Schedule B
    part of the Tax Report. If they are omitted they do not
    show up on Schedule B. If they are taxable, they are 
    included and added to the taxable totals. If they are 
    non-taxable, they are included but subtracted from the
    taxable totals.
  - Specify how to treat Short Term and Long Term Capital 
    Gains distributions for a security of this type on the 
    Schedule B part of the Tax Report. Normally, Short Term
    Capital Gains are shown and added to the Dividend totals
    on Schedule B, and Long Term Capital Gains are shown and
    subtracted from the Dividend totals - for transfer to
    a line on Schedule D of the Tax Forms. However, you can
    specify any of the following behaviors for either Short
    or Long Term Capital Gains: omit from the Tax Report,
    show with Dividends on Tax Report and add to total, or 
    show with Dividends on Tax Report and subtract from
  - Specify what to do with sales data that normally goes
    to the Schedule D part of the Tax Report. The options
    are to omit them, list each sale (default), group sales,
    or show sales on Schedule B part of the Tax Report.
    The latter option, showing sales on Schedule B of
    the Tax Report, is useful for Savings Bond sales.
    You can also specify to use group sales for all 
    securities when you generate the Tax Report. Group
    sales are discussed later in this newsletter.
  - Specify how to handle Return of Principal. This is
    normally shown with Dividends on Schedule B, but 
    subtracted from the total because it is not taxable.
    However, you can choose to omit Return of Principal
    from the Tax Report.
  - Specify what to do with sales commission on Schedule D.
    According to IRS documents, commissions should be 
    added to the basis, but most 1099-B forms subtract it
    from the sales amount. Options are to omit the sales
    commission, add the sales commission to the cost, or
    subtract the sales commission from the proceeds 
While the default settings for Security Types should be
correct most of the time, there are options for dealing 
with special cases.  
8) Portfolio Allocation

The Portfolio Allocation report and graph break down current
holdings by Security Class, Security Type, and Local 
Security. It is a valuable way to see how your investments
are distributed, by percentage. However, some users may want
to further breakdown holdings according to allocations
within their mutual funds. For instance, a fund may have
freedom to move money between stocks, bonds, and cash.

If you want to track fund holdings at a finer granularity:
  - First, determine from the fund prospectus, or from a 
    quarterly statement or online information, how the 
    fund's holdings are divided up.
  - Then, from the Global Security Table, use Securities/
    Type Percentages to specify the fund's breakdowns.

The type percentage breakdown is stored in the GSECTYP.DAT
file. This is actually a plain comma-delimited text file, 
with a line for each global security that has type 
percentages applied:
  global symbol, security type, pct, security type, pct ...
So, if you really want to change the allocations fast, 
you can use a text editor like Notepad to edit the file
directly. This is different from other Capital Gainz data 
files, which are usually binary and will likely be made
unusable by directly editing them.

If the total percentages specified do not add up to 100%, 
any additional percentage will be assigned to the Security
Type of the Global Security. The Portfolio Allocation report
and graph will automatically check for global security type
breakdowns and use the specified values rather than the
single Security Type assigned to the Global Security.
9) Grouped Sales in Tax Reports

In Capital Gainz, Schedule D sales can be 'grouped'.
This means that no matter how many purchases were involved
with a given sale, there will be at most one short term
and one long term sale reported on the Tax Report. The
purchase date will be shown as 'various'. 

The reason for the grouping option is to handle the case
where someone invested in a mutual fund periodically for a 
long time, and then sold the fund. For instance, if an
investor bought $100 of Acme Fund every month for 5 years,
there would be 60 different purchases (assuming no 
reinvestments of distributions). If this investor sold all
of the shares on the last day of the last month, then that 
year there would be 48 short term sales and 12 long term
sales to be reported on Schedule D. Why not make the forms
simpler and just lump all purchase information for short
term sales together, all purchase information for long term
sales together, and record just 2 sales? This is what the
Group Sales option in Capital Gainz will do.

There is nothing in the tax codes that says whether or not
this is allowable. However, the fact is that the result is
the same either way, and I know of at least a few 
accountants who do this.

In Capital Gainz, there are two ways to group sales on
the Tax Report:
  - When you request a Tax Report, one of the options is
    to Group Sales. If selected, then all sales that can
    involve multiple purchases are grouped.
  - Set the Group Sales option in the Security Type. If
    selected, only those local securities linked to global
    securities of this type use grouped purchases.
10) Total Return vs Performance

In Capital Gainz, there are three main performance 

  - Total Return looks at how a security has done over
    time, using only price and per share distribution
    data from the price history. It does not include any
    information regarding purchases or sales.
    Total Return is shown on the Total Return Report and
    Total Return Graph.

  - Performance looks at all purchases, sales, and
    distributions of a security. It only considers price
    data in determining unrealized gain/loss of holdings.
    Performance is shown on the Performance Report and
    Performance Graph.

  - Unrealized Gain/Loss reflects only the gain/loss on
    currently held shares. It does not include any sale
    or distribution information.
    Unrealized Gain/Loss is shown on the Local Security
    Table, Portfolio Detail Report, and Local Security

So, which is more important? That depends on what you are
interested in looking at:

  - If you want to know how a security has performed,
    regardless of your specific activity, look at Total
    Return. There are two notable uses. First, if you
    are not happy with how well your activity with a 
    security have faired, take a look at the Total Return.
    Perhaps the security is a winner, but poor timing
    has caused you to underperform in the short term.
    Total Return actually reflects a 'buy-and-hold' 
    strategy. Second, if you are just tracking the prices 
    of a security, but do not hold it, check the Total 
    Return to see if it is worth purchasing.

  - If you want to see how well you have performed, look
    at Performance. Depending on how frequently you trade,
    this represents a mix of your timing with the quality
    of the security. For long term investments, the
    majority of the performance will likely be due to how
    well the security has done. For short term investments,
    performance will be greatly influenced by your timing.
    Performance figures are provided as unweighted 
    percentages and rates, and as time weighted rates and 
    percentages (IRR).

  - If you want to know how your current holdings are doing,
    look at Unrealized Gain/Loss. However, be aware that
    this only reflects currently held shares. It is not
    an accurate reflection of your total performance - 
    unless you never sell anything or receive any 
    distributions. Also, realize that distributions are 
    realized gains. Thus, if you have a mutual fund that
    reinvests distributions for you, the distribution 
    amounts are added to the basis, reducing your Unrealized