Making The Most From Your Computer

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Technical analysis software is more specialized than other investment-management software. Technical analysts -- "elves," as they have come to be known through the television program "Wall Street Week" -- are investors who chart and analyze a host of statistical indicators, trying to read the market's direction on the basis of what it has done in the recent past. Those who spend hours constructing their charts by hand will find that a chartgenerating program is worlds ahead of graph paper. Even so, keying in new information can take hours, especially if you want to keep more than one or two charts daily. And if you download your new information automatically (using a modem and telephone to hook up to a national database), you will pay hefty connection fees, and you may find that some of the information you want isn't available. The cost of keeping just a few charts current can add up to the cost of a commercially available weekly chartbook that keeps hundreds of charts, with many times the data your computer will show.

To the confirmed chartist, of course, these objections will seem nonsensical: The important thing is to plot one's own configuration of statistics, not someone else's. Among the software packages that are worth looking into are Dow Jones Market Analyzer (part of the package mentioned above), which incorporates 17 different graphic tools; The Technical Investor (Savant Corp., Atlanta; $395), which combines database communications, charting, and technical analysis in up to four separate "windows" on the computer screen; and Wall Street Window (R&D Software, Reston, Va.; $395), a top-of-the-line program for the IBM PC and the IBM PC-XT that offers full-year daily graphs, Dow Jones quote interconnect, and a spreadsheet interface.

A few special programs support neither the fundamentalist nor the technician, but "opportunist" investors, who track the behavior of traders, insiders, and other investors. Market Mood Monitor (Computer Asset Management, Salt Lake City; $185) watches "sentiment indicators" like public short ratios, advance/decline lines, and premium/discount figures on futures. Market Trend Analysis System (Personal Equity Computing Inc., Ocean, N.J.; $350) claims to incorporate indicators that project "action of the smart money" in stock, options, and money markets.

Then there are the programs, some of them among the most interesting on the market, that are hard to categorize. A retired airline pilot named Carl Vietor, for example, has spent two years constructing a buy/sell analyzer, Compu-Cast (Compu-Cast Corp., Los Angeles; $325) whose 27 subprograms, with a master menu, measure a stock's critical turns. Vietor claims rather spectacular trading results with it.

Finally, some new programs allow what might be called "virtual diversification." Most investors wish they could own more equities than they can afford, and most portfolios would benefit from greater diversification. But even where substantial diversification is impossible, a program can be constructed that compares one eqity with others, weighing the stocks you actually hold against those you would like to hold. If this process of virtual diversification is carried out continuously and conscientiously -- and if stocks are switched now and then to achieve the balance indicated by the program -- you benefit from the collective action of all the stocks being compared.

Keeping up with the mushrooming field of computerized investing is difficult: There is almost too much information available. But if you have been bitten by the bug, here is where to turn for additional material:

Financial and Investment Software Review, 11 Hanover Square, No. 1302, New York, NY 10005. This bimonthly journal is co-sponsoring MICRO INVES/TECH' 84, a major exhibit and conference on investment software in New York City on November 8 and 9.

Wall Street Computer Review, 150 Broadway, New York, NY 10038. This monthly, aimed mainly at investment professionals, includes ongoing directories of various software categories.

Computerized Investing, American Association of Individual Investors, 612 N. Michigan Ave., Suite 317, Chicago, IL 60611. This group also runs the Individual Investors electronic bulletin board, a phone link that connects members' own computers with one another through the organization's national headquarters.

American Association of Microcomputer Investors Journal, PO Box 1384, Princeton, NJ 08542. Membership in this group brings the bimonthly journal, listings of public domain programs, and quarterly updates on a directory of hundreds of investment programs.

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