Winnav - Mutual Fund Performance Analyzer, Release 3.
(c) Copyright 1996 Tekniq. All Rights Reserved.

README date: 03/17/98


Winnav
------

Winnav is a 32-bit Windows shareware program for mutual fund performance
analysis, which:
 * displays and prints graphs of weekly mutual fund price changes
 * analyzes volatility and reward/risk
 * compares performance of funds over various time periods
 * calculates five types of moving averages and buy&sell signals
Winnav comes with data on over 370 US mutual funds and indexes, and can also
analyze data that you supply. Data is updated weekly.

Try the program to decide if it is useful to you. If it is, send your:
(1) name
(2) US mail address
(3) Email address
(4) phone number
(5) the location from which you downloaded Winnav
(6) $20 registration fee, checks payable to Tekniq
    (state of Washington residents add 8.6% sales tax=$1.72)
to:
  Tekniq
  PO Box 201
  Issaquah, WA 98027-0201

Email- randyn@eskimo.com
URL-   http://www.eskimo.com/~randyn/ (beginners: download README)
FTP-   ftp://ftp.eskimo.com/u/r/randyn/

Up-to-date data is available to registered users via an encryption key.
Registered users are notified of periodic key changes; include your email
address for fastest notification. Notify Tekniq if your US mail address, email
address, or phone number changes. Feel free to share Winnav with others, show
them what it can do, and encourage them to register. If within the first two
months of use you are not satisfied with the software, notify Tekniq for a
refund.

A few of the data files can be viewed without the encryption key, but the
majority require it. The program can also analyze data that you supply in plain
text form. The key is a word, like a password. Please do not share the key with
friends or put it on a network or public bulletin board. The registration fee
is low so anyone with a computer can afford it.

NAV stands for Net Asset Value.

Date current key was created:
  January 1, 1998

Dates previous keys were created:
  April 23, 1996 (beta test)
  November 6, 1996 (Release 1)
  January 25, 1997
  July 18, 1997

Expected date next key will be created: July 1998


System Requirements
-------------------

Winnav requires Windows 95. Video resolutions of 800x600 or 1024x768 with 16
bits of color resolution work best. Winnav will also work with 8 bits of color
resolution, but the colors displayed will not match those described below. A
mouse is strongly recommended, though not required. An Internet connection is
required for weekly data updates.


DOS and Windows Functionality
-----------------------------

A prerequisite to using Winnav is a basic understanding of how your computer
and its operating system work. Read the manuals that come with your machine.
There are plenty of books you can buy at any bookstore that explain how to use
DOS or Windows. Help will be given for Winnav problems, but not for DOS or
Windows problems.


Location
--------

The files can be downloaded from the world wide web at
http://www.eskimo.com/~randyn. They are also available by anonymous FTP from
host ftp.eskimo.com in directory ~randyn. The core files are contained in
WINNAV.ZIP, along with this README file which serves as a user manual. Some are
also available for separate download. Note that directory ~randyn will not be
visible when you connect to the root directory at ftp.eskimo.com, but typing
"cd ~randyn" will place you there. Alternatively, "cd u/r/randyn" will get you
there too.

Also in that location is UNZ512X3.EXE, a self-extracting binary which contains
UNZIP.EXE. If you need an unzip utility, you should (1) create C:\UNZIP, (2)
download UNZ512X3.EXE into it, (3) execute it to extract UNZIP.EXE, and (4)
either copy UNZIP.EXE to a directory on your PATH, or put C:\UNZIP on your
PATH. UNZIP is freeware; there is no fee for using it. Note that UNZ512X3.EXE
contains a README file, so you do not want to unpack it in the same directory
as WINNAV.ZIP (C:\WINNAV), or you will overwrite one README file with the
other.

There is a directory called Incoming which is available for uploading. For
example, if you have acquired or created some data sets for mutual funds that
aren't already present and you would like to have them added, upload them to
Incoming and send email. Just use 'put' instead of 'get' in FTP. Or use the
File->UploadFile menu command in your web browser.

Note that eskimo is a linux system, and unlike DOS, letter case in filenames is
significant. The file and directory names on eskimo will be in lowercase, and
you need to type them that way to 'get' them. In this README uppercase will be
used to make the names stand out. All files, including this README, should be
downloaded using binary mode.


Files
-----

The files are:
  WINNAV.ZIP  Programs, data, documentation.
              Contains WINNAV.EXE, README, KEYHELP, MONEYMKT, DATA.ZIP
  WINNAV.EXE  The analysis program
  README      Documentation (user manual)
  KEYHELP     Documentation (keystroke help)
  MONEYMKT    Money market rates
  INDEX       Benchmark index fund assignments
  DATA.ZIP    Data files (fund and index price histories), encrypted.
              Contains many .NAV files, FUNDS, OPT
  FUNDS       List of the funds in DATA.ZIP
  ENCR.ZIP    Encryption/decryption programs.
              Contains A0.EXE, A1.EXE, X0.EXE, X1.EXE
  A0.EXE      Program to unencrypt .NAV files (default)
  A1.EXE      Program to unencrypt .NAV files (key required)
  X0.EXE      Program to encrypt .NAV files (default)
  X1.EXE      Program to encrypt .NAV files (key required)
  UPDATE.DAT  Update data for .NAV files
  OPT         New optimization values, if UPDATE.DAT is present
  PRTFOLIO    List of funds selected for the portfolio.
              Not present on eskimo; generated by Winnav as needed
  SETTINGS    Configuration file containing program variables.
              Not present on eskimo; generated by Winnav as needed

The following sections contain short descriptions of the files. More detailed
descriptions appear later for some of them.


A0.EXE and A1.EXE
-----------------

These two utilities will unencrypt the .NAV files. They are not contained in
WINNAV.ZIP because you will probably never need them. They are available on
eskimo if you do. A0 will unencrypt the default encrypted files, and A1 will
unencrypt the key encrypted files.


X0.EXE and X1.EXE
-----------------

These two utilities will encrypt plain text data files to create .NAV files.
They are not contained in WINNAV.ZIP because you will probably never need them.
They are available on eskimo if you do. X0 will create default encrypted files,
and X1 will create key encrypted files.


UPDATE.DAT
----------

UPDATE.DAT contains new data that needs to be applied to the .NAV files.
UPDATE.DAT is encrypted. The UPDATE.DAT file is downloaded and applied via the
Incremental Update option on the Update menu.


MONEYMKT
--------

MONEYMKT contains the money market rates for each year, from 1960 to present.
These are used by Winnav to calculate the rate of return when it is determined
that a fund should not be owned during a period of time.


INDEX
-----

INDEX contains the assignments of benchmark index funds for each fund. These
are used by Winnav to determine which index to adjust against for each fund.
If you change the index associated with a fund, Winnav will write a new INDEX.
See the section below on Viewing Percent Changes for more detailed information
on benchmark indexes.


OPT
---

The OPT file contains moving average values and other information about each
fund. OPT is generated or updated as needed by Winnav. OPT is encrypted.


PRTFOLIO
--------

This file is generated by Winnav, and contains the names of the funds selected
for inclusion in the portfolio.


SETTINGS
--------

This file is generated by Winnav, and contains the values of settings which
determine the appearance of Winnav. Winnav uses the file to remember these
settings from one run of the program to the next.


An FTP Session
--------------

FTP stands for File Transfer Protocol, a way to transfer files across the
Internet. (Note: the information in this section will not be relevant if you
use a web browser to download files.) Once logged onto a computer connected to
the Internet, use the following commands (comments are enclosed in angle
brackets <>):

  ftp ftp.eskimo.com
    <You'll be asked for a logon ID.>
  anonymous
    <You'll be asked for a password; use your Internet email address.>
  joeblow@internet.com  <Don't type this; fill in yours.>
    <You'll be logged on, and placed in the root directory.>
    <Passwords are not printed on the screen when you type them.>
    <If you do a 'dir' you will not see directory ~randyn, but
     execute the next command anyway. If it fails, try "cd u/r/randyn".>
  cd ~randyn
    <Now you'll be at the right location; set file transfer to binary.>
  binary
    <To see what files are available, type "dir".>
  dir
    <Now download the file.>
  get winnav.zip
    <Winnav.zip is about 1.2M; when it's done, logoff.>
  bye

Some Internet providers put you into a "user friendly" menu system when you
dial into their machine via a modem. Usually there is a menu selection for
starting a command shell, from which you can issue the FTP command. If not,
there may be an FTP service menu selection. If you can't figure out how to FTP,
ask your system administrator. If you don't have an Internet account or for
some reason FTP is not available, it is going to be tough to keep your data
up-to-date. After you use FTP to transfer WINNAV.ZIP from ftp.eskimo.com to
your Internet Service Provider, download it to your local PC. If you don't know
how to do that, ask your system administrator; usually your ISP will have a
program you can invoke to transfer a file to your modem's terminal emulator
program.


Installation
------------

Create a directory called WINNAV in the root directory of your hard disk, for
example, C:\WINNAV, and place WINNAV.ZIP in it. Unpack with the command "UNZIP
WINNAV". The UNZIP.EXE program is also available on eskimo. This will unpack
the files. Then do "UNZIP DATA", which will create many .NAV files, and files
called OPT and FUNDS. The .NAV files each contain one data set, usually for a
mutual fund, and are named by ticker symbols. For example, FMAGX.NAV contains
data for Fidelity Magellan. Some of the .NAV files contain data for market
indexes, such as SP500.NAV. Winnav will look for data files in the same
directory it is executed from.

The simplest way to run Winnav is to make C:\WINNAV the current directory and
enter "winnav" from a command console (called MS-DOS Prompt). This will cause
WINNAV.EXE to execute, load in all the .NAV files, either calculate moving
average values for each of them or read them from the OPT file, and display the
data for you to evaluate. Other ways of running Winnav are to click on it in
the Windows Explorer, or use the Run... dialog from the Start button.

You can also create a shortcut to Winnav and place it on the desktop; then,
clicking on the desktop Winnav icon will execute it. To do this:
1) In the Windows Explorer, go to the \WINNAV directory of your C: hard disk,
2) Right-click on WINNAV.EXE and select Create Shortcut from the properties
   menu,
3) Left-click and hold the button down on the shortcut, drag it out to the
   desktop, and drop it by releasing the mouse button.


Reading in the Data
-------------------

When you run Winnav, the first thing you'll see is a warning because you do not
have an encryption key. After you dismiss the warning, Winnav will read in the
data files in two passes. The first pass determines the sizes of the data sets,
and the second pass reads them into memory. Between the two passes the memory
for holding the data is allocated. Then Winnav will normalize and optimize the
data sets; this is where Winnav determines the optimal type of moving average
to use and the parameter values. During each of these phases Winnav displays a
progress bar to show how far along it is. Finally, Winnav displays the list of
funds, and allows you to select funds for analysis. Despite the missing
encryption key, one fund from each category will be available for evaluation
purposes. These selected funds are encrypted in such a way that they can be
read even without an encryption key.


Tabs
----

Below the menu are the tabs, and below the tabs is the display area. The tabs
are boxes containing the words Funds, Key Help, and Manual. The tab that is
selected controls what appears in the display area. Initially the Funds tab is
selected, and the display area contains the list of funds, and a color-coded
legend. The name of a fund in the fund list, on a fund tab, and also in a fund
graph title will correspond by color to the legend of categories. For example,
"Fidelity Magellan" will appear in red, indicating it is a growth fund.

When you select one or more funds for analysis, a tab will be created for each.
When you select a fund tab, you'll see the fund graph in the display area. The
Key Help tab displays the list of keystrokes available and what they do, and
the Manual tab displays this README file in a scrolling window. If you click
the mouse on the fund legend, the fund list will be scrolled to that category.
If you double-click on a fund in the list, it will be selected and its tab will
also be selected. That is, the fund graph will be displayed immediately.
Selected funds have a red checkmark in the fund list. A single click in the
fund list will select a fund without selecting its tab. A fund can also be
selected by positioning the fund list cursor box over the fund name and
pressing the space bar; this comes in handy if you do not have a mouse. The tab
key will switch the keyboard focus between the tabs and the item in the display
area (the fund list, or a fund graph). The Enter key (carriage return) will
change to the Fund tab if any other tab is currently selected, or to the fund
graph tab if the Fund tab is selected *and* there is only one fund graph tab
available.

Indexes, which may not be funds, are shown in gray. Note that the data for some
of the indexes does not include reinvested dividends. A fund that has not been
assigned to a category will appear in black, at the bottom of the list.
Normally funds are grouped by category, and alphabetically within each
category, but the category sort can be disabled, so they are listed
alphabetically without regard to category. Note that funds placed into your
portfolio will be in a category at the end of the list, if portfolio grouping
is enabled. The order of the funds within each category or within the entire
list will be determined by which bar chart is selected, if any. All of these
menu options are described below.


Fund Graphs
-----------

In the fund graph, the bottom axis is time, earliest dates on the left, most
recent on the right. The date of the oldest data point is displayed at the
lower-left, and the date of the most recent data point is displayed at the
lower-right. The vertical axis is money, and is scaled according to each fund.
If more than one fund is present, it will be scaled for all funds according to
the maximum of all of them. Statistics are displayed in the upper left-hand
corner. The yearly returns are shown in the first column. Negative percentages
are enclosed in parentheses. Yearly returns start on the last data point for
the previous year and end with the last data point for the current year.

The total return over the entire time period (annualized), and the 1-, 3-, 5-,
7-, and 10-year averages (annualized, relative to the most recent date) are
shown in the second column.

In the third column, the following are shown: volatility, reward/risk ratio,
best returns, nav and dist summaries, and tax efficiency.

Volatility - The standard deviation of the quarterly returns; it may be
misleadingly low for funds with short histories.

Reward/risk ratio - The return divided by the volatility. If the fund has a
long enough history to have a 3-, 5-, 7-, or 10-year return, the longest of
these is used. Otherwise, the total start-to-end return is used. It would be
good advice to look for funds with a reward/risk ratio of 2.0 or above. Another
way of interpreting the reward/risk ratio is whether the risk being taken
(volatility) is sufficiently compensated for by the return.

Best return - The annualized result of following the best moving average
values; they will be for the entire fund unless it is long enough to be divided
into trial and eval periods (see below). If it does have separate trial and
eval periods, there will be a best return value for each period.

Summaries - The nav summary shows the absolute change in nav from first to last
data point, and the dist summary shows the total amount of distributions per
share from first to last data point. The nav and dist summaries are used to
calculate tax efficiency.

Tax efficiency - The percentage gain retained in the share price. For example:
a fund gains $10 per share and pays out $8 total distributions per share; the
tax efficiency is 55.6%, since $10 out of a total $18 gain was retained in the
share price. Use this statistic to determine which funds to place in a
tax-deferred accounts, such as an IRA or 401(K).

Vertical dotted lines mark the beginning of each calendar quarter.


Cursor Keys
-----------

When a fund graph is displayed, the cursor keys (up-arrow, down-arrow,
left-arrow, right-arrow, page-up, page-down, home, and end) will cause the fund
graph tab to be changed to the preceding fund, following fund, etc, in fund
list order, as long as only one fund is being displayed. If more than one fund
is being displayed through the combined Graphs tab, the cursor keys do not
change anything. The page-down and page-up keys cause the graph to skip ahead
and backward 10 funds, respectively. A good way to cycle through all the funds
in the list is to select the first one, change to its tab, and keep pressing
the down-arrow key until the last fund is reached.

When the fund list is displayed, the cursor keys cause the list cursor (a box)
to move or the list itself to scroll. When a fund graph tab is selected, the
Enter key will cause the Funds tab to be selected (and also when the Manual or
Key Help tabs are selected). When the Funds tab is selected and there is only
one fund graph tab, the Enter key will cause the fund graph tab to be selected.
But if there is more than one fund graph tab, the Enter key will do nothing.


Arrow Buttons
-------------

There are three sets of arrow buttons next to the fund graph; they enable you
to zoom in on any part of the fund graph by adjusting the top and side borders.
Above the fund graph are up/down arrow buttons that move the top graph border.
To the left of the fund graph are thin and thick left/right arrow buttons which
move the left border. Thin arrows move the border one data point (week); thick
arrows move the border a whole year, or move it to the beginning of the
appropriate year, if it is not already there. The double arrow moves the left
and right borders simultaneously, like a sliding viewing window, over the data.
The arrow buttons to the right of the fund graph move the right border.

Usually you will be most interested in recent data. To see this, use the Zoom
function on the Graphs menu (the Z key), described below. This will display the
last complete calendar year, plus the current year to date. Zooming with the
arrow buttons will give you more control, and allow you to zoom in on any time
period.

With several graphs on the combined graph tab, the arrow buttons can be used to
zoom in on the identical time period for all displayed funds simultaneously.
The zoomed time period remains set if you use the cursor keys to switch to the
next/previous fund in the list, etc. The zoomed time period is reset when you
switch to a non-graph tab, and when you zoom or unzoom using the Z key or the
Zoom menu command.


Data Updates
------------

Most of the data is measured weekly, at the close of the week on either Friday
or Sunday (which uses the previous Friday's closing price). The data includes
distributions. For some funds, the distribution data is represented explicitly
and the price data is as reported on the given date; for others, the
distribution data has been used to adjust the price data. Which technique is
used depends on the source of the data. The data also includes the fund name,
and category. Dates may also be present without corresponding prices; these are
missing data. Winnav handles these by interpolating from the previous and next
known prices. Missing data points are represented by red dots when graphed.
Actual data points are plotted with blue dots. The data may also include
information on share splits, which are rare for mutual funds.

Normally all funds will be updated with weekly closing prices by Friday night
for the market close that day. This is the plan; it is not guaranteed. It is
expected that the data will be available by Friday night about 90% of the time.
If you notice a missing distribution or encounter unreasonable difficulty,
please send email.

Most of the data files will be updated weekly, but there are a few exceptions.
The 44 Wall Street fund was merged into the 44 Wall Street Equity fund in
mid-1993, so there will be no new data on it. (During 1996, the 44 Wall Street
Equity fund was renamed to the Matterhorn Growth fund.) The S&P 500 dividend
yield and P/E ratio data sets are updated every few months. If you learn of an
on-line source for those numbers, please send email. Currently the data sets
for the Money Market yield, the CPI (Consumer Price Index), the PPI (Producer
Price Index), and several other interest rates, are updated on a yearly basis.

WINNAV.ZIP is a large file, so it won't be updated often. There is a separate
DATA.ZIP available on eskimo, but it is also large, and tiresome to download
every week. DATA.ZIP will be updated about every two months; it contains the
complete price and distribution histories. Every week, a new UPDATE.DAT file
will be placed on eskimo. When you see one with a date later than your last
update, select the Incremental Update option on the Update menu. This will
download UPDATE.DAT and a new OPT, and apply the UPDATE.DAT changes to the .NAV
files.

If your .NAV files have become significantly out of date, select the Full
Update option on the Update menu, then the Incremental Update option. Full
Update downloads and unzips DATA.ZIP, and restarts winnav. All new price and
distribution data will be accumulated in UPDATE.DAT over a period of a few
months, after which a new DATA.ZIP will be generated with all changes included,
and UPDATE.DAT will be deleted.

Registered users have access to encryption/unencryption utilities which enable
them to view the data in plain text format. If necessary, they can make
modifications, corrections, or fill in missing data. The utilities are not to
be used to resell or redistribute the data provided with Winnav. Registered
users can use the data with other analysis programs, as long as they do not
allow anyone else to access the data.

If you modify any of the .NAV files while winnav is running and want to load
the new data into winnav, select the Restart option on the Update menu.


Mouse
-----

If your computer has a mouse, Winnav will use it not only for the usual
functions (selecting menu items, selecting tabs, selecting items in lists), but
also for "what if" analysis. You can use the mouse to test various date and
price points on the fund graphs, and to see performance over various periods.
Moving the mouse around will display the date and value at the tip of the mouse
pointer. Clicking once will fix one endpoint of a line that you can stretch
out. When the mouse is over the desired second endpoint, clicking a second time
will fix it in place. The endpoint values and the performance over the period
are reported in the fourth column of the fund graph. Use this to determine
approximate fund performance over arbitrary and non-standard timeframes.
Clicking a third time will erase the line, and start a new one. A line segment
must be contained in one fund graph to be meaningful.


Menus
-----

The following is a short listing of the menu commands. Most menu commands can
also be invoked with a single keystroke, which is listed below for each. The
keystroke is usually the first letter of the command, but there are a few
exceptions. Following sections provide more detailed descriptions of some menu
commands.

Charts - control fund list bar charts
  Y - year to date return
  1 - 1-year return
  3 - 3-year return
  5 - 5-year return
    (note: some funds don't have 5 years of data)
  7 - 7-year return
    (note: many funds don't have 7 years of data)
  0 - 10-year return
    (note: most funds don't have 10 years of data)
  T - total return
  V - volatility
  R - reward/risk ratio
  X - tax efficiency
  N - no chart
  C - category sort on/off
  Q - exit
Graphs - control fund graph appearance
  Z - zoom in/out
  M - moving average on/off
  D - distributions on/off
  <F2> - percent change on/off
  L - log/linear vertical axis
  F - combined graphs on/off
  web page
Portfolio - control portfolio selection
  S - select fund
  G - group on/off
Optimize - control moving averages
  U - unweighted UMA
  W - weighted WMA
  E - exponential EMA
  A - adaptive AMA
  B - variable VIDYA
  K - reselect moving average
  O - recalculate optimal values
  default benchmark
  reset benchmark
Update - update data
  incremental update
  full update
  key update...
  restart
Print - print fund graph
  P - print fund graph
Help - on-line help
  H - keystroke help
    (the ? and <F1> keys also invoke keystroke help)
  J - on-line manual
  I - about Winnav


Fund List Bar Charts
--------------------

Initially the fund list displays the fund names, alphabetized within each
category. There are various bar charts that can be displayed to the right of
the fund names. Selecting each bar chart a second time will erase the chart.
Each chart is sorted from longest bar to shortest, except for volatility, which
is sorted from shortest to longest. The length of each bar corresponds to the
value of the statistic associated with each fund. Note that the charts
corresponding to returns can be negative; they will have a bar extending to the
left rather than to the right. Volatility and tax efficiency by definition
cannot be negative. For funds not old enough to have a given return, the bar
length will be 0. The type of chart being displayed is reported on the status
bar. The types of charts are listed above in the Charts menu section. If the
Winnav window is too narrow, the bar chart will not be displayed. The size of
the Winnav window can be adjusted with the maximize and resize buttons on the
right of the title bar, or you can drag the window borders with a mouse. The N
key will turn off all bar charts.


Category Sort
-------------

Normally, all funds are grouped in categories and sorted alphabetically or by
bar chart order within categories. The C key will turn this grouping on or off.


Quit
----

The Q key will cause Winnav to exit, but only after confirming that is what you
want to do.


Zoom
----

Sometimes it is difficult to see the detail of current price moves if the
history gets long, and recent prices are squeezed up against the right-hand
axis. Press the Z key to zoom in on the last full year, plus the current year
to date. This is known as the eval period, for funds that have separate trial
and eval periods.


Viewing Moving Averages
-----------------------

The screen can get cluttered when moving averages are displayed, so normally
they are not. Select a fund, such as Fidelity Magellan, and switch to the fund
tab, then press M. This will turn on the best moving average. The blue price
line will be overlaid with the peach moving average curve. Above and below the
moving average curve are sequences of dots which show the buy and sell
thresholds. When a buy signal occurs, a green letter B points to it. A red
letter S points to a sell signal. The performance of an actual investment
following the signals is shown on the green line, and reported in the
statistics. The purple vertical line at the beginning of the last complete
calendar year shows where the trial period ends and the eval period begins. The
investment amount is resynchronized to the actual price value on that date.

There is also a black dot on the purple trial/eval period border, and one on
the most recent date; these show where the average investment (driven by buy
and sell signals) would end up at the end of each period. The dot on the purple
border shows where the average moving average return during the trial period
would end up, and the dot on the most recent date shows where the average
moving average return during the eval period would end up. The starting point
for each period is the first actual data point in the period.

To calculate the optimal moving average values, Winnav calculates every
possible combination of values, and saves the one which gives the best final
investment value. While it is doing this, it adds the investment results of
every combination, and divides by the number of combinations to form the
average. If the result achieved by following the optimal moving average values
(the green line) during the eval period is higher than the average dot on the
final date, then Winnav was successful at capturing the behavior of the fund in
the trial period and at applying it to the eval period. If the result is below
the average dot, then Winnav was not able to correctly capture the behavior,
and a more extensive data history is needed.

When not invested in the fund, it is assumed that you are invested in a money
market fund. Winnav has data which tells how much interest you would earn by
parking your investment in a money market fund, as a yearly average, which is a
reasonable approximation. The data comes from the Vanguard Money Market Prime
Reserves (a very typical money market fund), and from 3-month T-Bill rates,
and is stored in the file MONEYMKT. If Winnav can't find MONEYMKT in the same
directory as Winnav, it will use a money market rate of 5%.

Pressing M again will erase the moving average, and display the price graph.
Clutter can be reduced if you zoom in on the eval period.


Viewing Distributions
---------------------

Normally distributions are not shown. If a fund graph is displayed, press D
and the distributions will be displayed in a small graph below the price data.
Press D again and the distribution graph will be removed. The distributions are
broken down by mid-term plus long-term capital gains (blue) and dividends plus
short-term capital gains (red). Dividends are grouped with short-term capital
gains since they are taxed at the same rate. Mid- and long-term capital gains
are grouped together since they are both taxed at a lower rate than ordinary
income. The percent breakdown is shown in the upper left-hand corner of the
distribution graph; it will be calculated on only the distributions shown on
the graph. The vertical black line shows the cumulative previous distributions,
and the vertical axis is in dollars per share (linear, not logarithmic).


Viewing Percent Changes
-----------------------

Rather than viewing price charts directly, it is sometimes useful to view a
chart of the prices adjusted by percentage relative to a corresponding
benchmark index. This will show whether a given fund has been outperforming its
index (in a relative sense), as opposed to whether it has been gaining or
losing money (in an absolute sense). The <F2> key or the Percent Change menu
item will turn this mode on or off. To do the benchmark adjustment, Winnav
performs the following steps:

  (1) Start with the original price data points, for example Fidelity Magellan.
  (2) Locate the index price data points, for example Vanguard Index S&P500.
  (3) Generate a new data set from the fund price data points by calculating
      the weekly percent changes (gains or losses).
  (4) Do the same for the benchmark index price data points.
  (5) Subtract the index percent changes from the fund percent changes by
      corresponding week.
  (6) Use the benchmark-adjusted percent change data series calculated in (5)
      to generate a new price data series by investing $1 and then adjusting it
      by each of the benchmark-adjusted percent changes in the series.
  (7) Use the benchmark-adjusted price data series to calculate moving average
      values.

If the percent change mode is on, an indication will show up on the status bar
at the bottom of the display area. Most funds have already been assigned an
index based on their category, and it is stored in the INDEX file. The table
below shows what index corresponds to each category:

  Max Growth - Vanguard Index S&P500
  Smallcap - Vanguard Index Smallcap
  Global Equity - Schwab International Index for most, Vanguard International
    Equity Index Emerging Markets for a handful
  Growth - Vanguard Index S&P500
  Growth & Income - Vanguard Index S&P500
  Index - none
  Equity Index - Vanguard Index S&P500
  Balanced Equity - Vanguard Balanced Index
  Balanced Bond - Vanguard Balanced Index
  Bond - Vanguard Balanced Index
  Gold - Gold
  Sector - Vanguard Index S&P500
  Other - Vanguard Index S&P500

If a fund has an index assigned, the name of the index will be printed on the
title bar of the fund graph, such as "Fidelity Magellan (Growth) vs. Vanguard
Index S&P500 (Index)", if the percent change mode is turned on. It is not
possible to assign an index to an index fund.

Whether a fund has a benchmark index assigned or not, a percent change window
will be shown, very similar to the distribution window. It is a bar chart on
the same time line as the data, containing blue bars (going up) for gains and
red bars (going down) for losses. The gains/losses will be absolute if an index
is not assigned to the fund, or relative to the index that is assigned. A fund
that matches the index very closely in terms of moving up and down by the same
relative percentages each week will have very short bars.

Buy and sell signals on benchmark-adjusted returns are most useful when used in
combination with the signals on the unadjusted data and the index. Don't use
them in isolation. For example, a benchmark-adjusted buy signal which closely
follows an unadjusted buy signal would be a good indication; it would mean the
fund is not only performing well in an absolute sense, but is also
outperforming the index. If the index itself is also in buy territory, this
would further strengthen the confidence in the signal. However, if a
benchmark-adjusted buy signal occurs in sell territory on the unadjusted data
it would not be a good indication; it would mean that while the fund is
outperforming the index in a relative sense, it is not a "buy" in an absolute
sense. This can occur when a fund loses money at a slower rate than the index,
for example. Similarly, benchmark-adjusted sell signals would be strengthened
by the presence of sell signals in the unadjusted data or in the index, and
would be weakened by the presence of buy signals or being in buy territory.

You can change the index that is assigned to a fund. Winnav will remember the
last index that was selected as the default index. If more than one index is
selected, there is no default index, as Winnav can't decide which one to use.
If one is selected and then unselected, Winnav will remember it until a new
one is selected. The default index is stored in the SETTINGS file. To find out
what the default benchmark index is, choose the Default Benchmark menu item on
the Optimize menu item. Once a default index is set, select a fund to assign
the index to it. There will be a short pause as the moving average values are
recalculated on the benchmark-adjusted data. If the fund already has a
different index assigned to it, the Reset Benchmark menu item on the Optimize
menu item will clear it, and assign the new default index (if any) to it. If
more than one fund is being viewed in the combined funds tab, all of their
indexes will be reset.

When an index is assigned to a fund, the performance statistics reported on the
fund graph will be relative to the benchmark-adjusted data, not the original
price data. If a fund closely matches an index, the long-term return
percentages will all be close to zero.


Logarithmic Graphs
------------------

The vertical (money) axis for fund graphs is logarithmic. This makes steady
rates of return and the effects of compounding result in a straight line.
The distribution graph is always linear, in cents per share. Press L to change
from logarithmic to linear vertical axis, and back.


Combined Graphs
---------------

Normally only one fund graph is shown in the display area of a fund tab. But if
the combined option is enabled, all selected fund graphs are shown under a
Graphs tab, and there are no individual fund tabs. If two funds are selected,
each will get half the display area, and so forth. There is no limit to the
number of funds you can select, but you will find that it is difficult to view
the graphs if there are more than two of them. Press F to switch between
combined and separate fund tabs.


Web Page
--------

If you are viewing a fund graph, you can load the web page associated with the
fund by selecting the Web Page option on the Graphs menu. In most cases, a
dial-up connection will be initiated if it does not already exist, and the web
browser will be started if it is not already running. However, these are slow
operations; things will work much smoother if you make sure the web browser is
already running before selecting this option. Web pages are defined for most,
but not all funds.


Portfolio
---------

You can form a portfolio of funds with Winnav. In the fund list, position the
cursor box over the desired fund, and press S. This will select the fund for
inclusion in the portfolio. Once a fund is in the portfolio, pressing S again
removes it. By default, portfolio funds remain in their categories, but are
indicated by a yellow P in a box which appears to the left of their names. But
pressing G will cause all portfolio funds to be grouped together in a portfolio
category at the end of the fund list. Pressing G again will remove the
portfolio category, and place the portfolio funds back in their categories.

Putting the funds you invest in into a portfolio will help you compare their
performance to their peers, and also to each other. It is most useful when
viewing the Y,1,3,5, etc bar charts. Note: if you have portfolio category
grouping enabled, it can be confusing to select a portfolio fund and see it
immediately disappear from its category group. Remember that it was moved to
the portfolio category, which may be several screens down the list. The
portfolio funds are stored in a file called PRTFOLIO, and readded to the
portfolio the next time you run Winnav. If you want to remove the portfolio and
start again, just delete PRTFOLIO. If a portfolio change is made while Winnav
is running, Winnav will update (or create) the PRTFOLIO file.


Changing a Moving Average
-------------------------

You can try any of the five types of moving average whenever you want. If
you're looking at a price graph using EMA and you'd like to see UMA, press U.
You'll be asked to confirm, and the moving average values will be calculated.
Once you set a different moving average for a fund, it will be remembered as
the preferred moving average, until either another moving average is selected
or the OPT file is deleted or overwritten. Pressing W will select WMA, pressing
E will select EMA, pressing A will select AMA, and pressing B will select
VIDYA. If you are in the Funds tab, the moving average will be selected for all
funds. The K key will reselect the optimal moving average type, and the O key
will recalculate the optimal moving average values. K and O operate on one fund
if a fund graph is in the display area, or on all funds if the fund list is
displayed. K is useful if you've change the moving averages and can't remember
which one is optimal.


Automatic Update
----------------

The options on the Update menu will download and process the necessary files
for either a full or incremental update. You can also change the encryption
key (or set its initial value), and restart winnav if you have manually
changed the .nav files. If you want your data to stay current, you should do an
incremental update at the beginning of every week, and a full update whenever a
new DATA.ZIP is available.


Printing
--------

If you have a printer connected to the LPT1: port, press P to print the fund
graph. Printed graphs are scaled to match the screen dimensions. When the Print
dialog is displayed, the Properties button can be used to select portrait or
landscape mode.


Help
----

Pressing H or ? or <F1> will display a help screen showing what the various
keystrokes do. This information is contained in the KEYHELP file. Pressing J
will display the on-line manual (this README file) in a scrolling window.
Pressing I will display the copyright, Tekniq US mail address, email address,
and world wide web address (URL).


Trial and Eval Periods
----------------------

Before calculating moving average values, Winnav will try to separate the price
data for each fund into two parts: the trial and eval periods. The idea is to
use the trial period data to form the moving average values, and then apply the
values to the eval period data. Winnav determines the most recent whole year
for which data is available. This, plus any trailing partial year, are the eval
period, if at least 100 data points precede it (they become the trial period).
A whole year must begin in the first week of January, and end in the last week
of December. If a whole year cannot be found, or there are less than 100
preceding data points, there is no eval period and the entire price history is
put in the trial period.

Examples: for a fund with data from 2/3/95 to 4/20/96 there is no eval period,
because there is no whole calendar year present. For a fund with data from
11/14/94 to 4/20/96 there is no eval period, because while calendar year 1995
is present, there are not 100 data points that precede it. For a fund with data
from 9/2/88 to 4/20/96 the eval period starts on 1/1/95 and includes both
calendar year 1995 and year to date 1996.

Moving averages are most useful if there are separate trial and eval periods.
This is because the moving average values must be calculated over the trial
period, and then applied to the eval period. If the same data points are used
to both calculate and also apply the values, the results will be subject to
overfitting. That is, the algorithm cheats by allowing itself to select values
which optimize the equations over all the data. To be fair, the algorithm
should use only part of the data to calculate the values, allowing you to
evaluate the performance over an independent period. In this sense,
"performance" applies to the moving average values, and therefore the algorithm
that calculates them.

When moving averages are graphed, you will see a vertical purple line
separating the trial period from the eval period. If the line is not present,
there are no separate trial and eval periods, and the moving average is subject
to overfitting. Such a moving average can change with each new data point that
is added; therefore, don't use it to make buy/sell decisions until enough data
has accumulated to form separate trial and eval periods. Overfit moving
averages can still be useful in showing how the algorithm is selecting moving
average values.


Moving Averages
---------------

Winnav displays a number of statistics relating to fund performance, but its
real job is calculating moving averages. These are trend curves which compare
recent prices to historical behavior, and are used to make buy and sell
decisions. Winnav supports five moving averages:

UMA - Unweighted Moving Average. This is calculated by adding the previous N
prices and dividing by N, where N is the window size. For example, if P[i] is
the price at week i, and U4[i] is the 4-week UMA at week i, then
U4[5]=(P[1]+P[2]+P[3]+P[4])/4, U4[6]=(P[2]+P[3]+P[4]+P[5])/4, and so on. Window
sizes range from 2 to 60, in increments of 2 (2,4,6,...). For U4[i] where i<5,
use Uj[j+1] where j+1=i; that is, U4[1]=U0[1]=P[1], U4[2]=U1[2]=P[1],
U4[3]=U2[3]=(P[1]+P[2])/2, and U4[4]=U3[4]=(P[1]+P[2]+P[3])/3. In other words,
if there are not enough preceding points for the window size, use the largest
window size possible that does have enough points.

WMA - Weighted Moving Average. Similar to UMA, but gives more weight to recent
price points. W4[5]=(P[1]+2*P[2]+3*P[3]+4*P[4])/(1+2+3+4). The most recent
price point, P[4], receives four times the weight of the most distant price
point, P[1]. Window sizes are the same as for UMA. Like UMA, Wi[k] for i>=k is
defined as Wj[j+i] where j+1=i.

EMA - Exponential Moving Average. EMA has no fixed window size. Instead,
E[i]=C*P[i]+(1-C)*E[i-1], where 0<C<1, and E[1]=P[1]. C is the coefficient, but
for consistency with UMA and WMA we'll call it a weight. If C=.8 then a lot of
weight (80%) is given to the current price point and relatively little (20%) to
previous price points, which means the EMA will follow the price graph very
closely. If C=.2 then a lot of weight is given to previous price points and
relatively little to the current price point, which means the EMA will be a
gradually moving curve that doesn't follow the price graph closely. Weights
range from .10 to .80, in increments of .02 (.10,.12,.14,...).

AMA - Adaptive Moving Average. AMA has a window size, but only to calculate
recent volatility. AMA is calculated in the following way: select a window size
between 2 and 30 inclusive, in increments of 2. calculate Direction,
Volatility, and Efficiency Ratio (ER) per data point:
  Direction=Price[0]-Price[N]
    where Price[N] is the price N weeks ago. Price[0] is the current price.
  Volatility=sum from 1 to N of |Price[i-1]-Price[i]| (absolute values)
  ER=Direction/Volatility
  C=ER*ER
    Square ER to push small values toward zero; this keeps AMA from moving when
    there is no clear trend. C is the coefficient.
  AMA[0]=AMA[1]+C*(Price[0]-Price[1])
    where AMA[1] is for the preceding data point.
In addition, there is an adjustment to C if it is detected that the price is
creeping away from the AMA. This implementation of AMA is derived from Perry
Kaufmann's book "Smarter Trading", McGraw-Hill, pp. 133-143. But the algorithm
has been modified in several ways.

VIDYA - Variable Index Dynamic Average. VIDYA is calculated in the following
way: select a window size between 2 weeks and 20 weeks inclusive, in increments
of 2, and a primary weight between .10 and Max inclusive, in increments of .02.
Max is determined by the algorithm. The window size is used to calculate the
volatility index for each data point:
  K=Sigma(X-days)/Sigma(Reference)
    where Sigma is a function that measures volatility. For Sigma, Winnav uses
    a sum of the price changes over the last X days.
The reference value represents the normal value of Sigma across the data set;
Winnav uses an approximation of the average of Sigma across all valid data
points for Sigma(Reference). The following conditions occur:
  when K=1, volatility is normal
  when K<1, volatility is low
  when K>1, volatility is high
Next, determine the maximum value of Wt (primary weight) by: K*Wt<1 -> Wt<1/K.
After 1/K is calculated, subtract .01 and assign the value to Max. Now:
  VIDYA=K*Wt*C0 + (1-K*Wt)*V1
    where C0 is today's price and V1 is yesterday's VIDYA. Wt is the EMA
    coefficient and K is the volatility index.
This implementation of VIDYA is based on "The New Technical Trader", by Tushar
Chande and Stanley Kroll, Wiley, pp. 49-72. The one difference is that Chande
and Kroll use VIDYA=K*Wt*C0+(1-K*Wt)*C1, where C1 is the preceding price. V1
seems to give slightly better results.

AMA and VIDYA are adaptive, in the sense that they try to capture the concept
of fluctuating volatilty. When volatility is low, they move very slowly. When
volatility increases, they move more quickly to catch up with the trend.

Winnav can use any of these moving averages (but only one at a time) for each
fund; by default Winnav will select the one that gives the best result over the
eval period. Once a moving average type has been selected, Winnav will continue
to use it for the fund until either the eval period changes (a new year is
started), or you change it.

The buy and sell signals generated by Winnav are offset from the moving average
by buy and sell thresholds. To generate a signal, the price must meet or
exceed the moving average plus the threshold. For example, "EMA .64 (+3-5)"
means the coefficient (weight) is .64, a buy signal is generated when
P[i]>=1.03*E[i], and a sell signal is generated when P[i]<=.95*E[i]. The
positive number is the buy threshold and the negative number is the sell
threshold. For a buy signal to be generated, the price must meet or exceed the
moving average by 3%, and for a sell signal to be generated, the price must
meet or fall below the moving average by 5%. "UMA 12 (+1-0)" means the
unweighted window size is 12 data points (usually weeks), a buy signal is
generated when P[i]>=1.01*U[i], and a sell signal is generated when P[i]<U[i].
The type of moving average used (EMA, UMA, etc) and the optimal values are
displayed on the fund graph in the upper-right corner, on the same line as the
fund name, if moving average (the M key) is turned on. If it is turned off, it
will not be visible.

It is possible for threshold values to be zero, in which case crossing the
moving average will generate the signal immediately. But for a zero threshold,
the price must cross, not just meet, the average; this is to eliminate the
special case of (+0-0) and a price which hits the average exactly triggers
simultaneous buy and sell signals. Buy and sell thresholds can range from 0% to
10%.

Winnav will calculate the best values for window size, weight, buy and sell
thresholds. "Best" is defined as the values which give the greatest investment
value at the end of the trial period, or at the end of the last data point if
there are no separate trial and eval periods.

Whipsaws are buy and sell signals that occur very close to each other. To
discourage selection of values that cause many whipsaw signals, Winnav
penalizes the values that tend to cause them, thus favoring those that don't.
The penalty consists of subtracting a percentage of net assets proportional to
how close together the whipsaw signals are. For example, .9% is subtracted for
signals that are 1 week apart, and .1% is subtracted for signals that are 9
weeks apart. No penalty is assessed for signals that are 10 or more weeks
apart.

Moving averages don't mean anything for data sets that do not represent prices,
such as the S&P 500 P/E ratio and dividend yield.

Winnav does not adjust for loads; the price histories are as reported in the
newspaper, plus distribution information.


OPT
---

The OPT file is generated by Winnav, and contains moving average values, such
as window sizes, weights, and buy and sell thresholds. It also contains
information about each fund, such as the number of data points and the first
eval period date, so Winnav can determine whether the values are up-to-date.
If a .NAV file has grown since the last time an OPT entry was generated, the
values may need to be recalculated. This will depend on whether an eval period
exists for the fund, and whether the eval period matches the one in OPT. OPT
will also be provided in DATA.ZIP, and whenever a new UPDATE.DAT is placed on
eskimo, so you can avoid lengthy recalculations.

For funds which have an eval period, adding one or a few data points will not
trigger a recalculation of moving average values. But once the first date of a
new year is added, the eval period will be moved forward by one year, and a
recalculation is necessary. Usually this will be done automatically, so you
will seldom if ever be required to wait for a lengthy recalculation to
complete. Funds which do not have an eval period must be recalculated when new
data is added. If you ever suspect that OPT does not contain optimal values,
delete it and Winnav will generate it automatically. On a 200Mhz Pentium it
takes 17 minutes to calculate a new OPT file. Winnav will look for OPT in the
directory where Winnav was executed from. OPT is encrypted.


SETTINGS
--------

By default:
  Zoom is turned off
  Vertical axis in fund graphs is logarithmic
  Moving average is not shown
  Distributions are not shown
  Funds are sorted into categories
  The year to date bar chart is displayed in the fund list
  Separate (not combined) charts are shown when multiple funds are selected
  Portfolio grouping is turned off
  Percent change is turned off

If any of these are changed, the new values are stored in the SETTINGS file, so
that when Winnav is run again, the same values are used. This keeps Winnav
looking the same from one run to the next. Most of these settings are reported
on the status bar, at the bottom of the display area. These values are global
settings, and affect how all fund graphs are displayed, not just the one
currently being displayed. SETTINGS also contains the path to the unzip
utility, if you have entered it during the Full Update process, and the default
benchmark index, if any.


.NAV File Format Example
------------------------

Here is a short example of a plain text .NAV file:

name=Ebenezer Scrooge Fund
category=Growth
;Comments start with a semi-colon.

;Blank lines are fine too.
;Here is a distribution, with income dividends, plus short-, mid-, and
;long-term capital gains. These are in dollars and cents per share. The date is
;the "X-date" or ex-dividend date. This is the first date that the effect of
;the distribution is reflected in the reported per-share price. You can
;have up to 4 decimal places.
12/30/61 div=.07 scg=.3025 mcg=.753 lcg=1.73
1/1/60=12.75 Comments can follow NAV prices too.
2/3/60= This nav is missing, but will be interpolated.
3/4/60=6.80
;Here's a share split, which is rare for mutual funds:
2/2/60 split 2 for 1
;Here's the definition of an excluded region:
1/1/61 exclude
;In this case, all price data prior to and including 1/1/61 will be
;excluded from the tax efficiency calculation, because distribution
;data has been used to adjust the prices, rather than being included
;explicitly.

Categories include:
  Max Growth (aggressive growth)
  SmallCap
  Global Equity (international, global, and world)
  Growth
  Growth & Income
  Index
  Equity Income
  Balanced Equity (more stocks than bonds)
  Balanced Bond (more bonds than stocks)
  Bond
  Gold
  Sector


Unencrypting .NAV Files
-----------------------

If you need access to the plain text price histories, use A0.EXE and A1.EXE to
unencrypt the .NAV files. The .NAV files are encrypted in one of two ways;
either they are encrypted so that Winnav can understand them without a key (a
few of them), or they are encrypted so that Winnav requires a key to understand
them (the majority). A0 will unencrypt the former, and A1 will unencrypt the
latter. If you attempt to run them on the wrong type of data file, they will
tell you. The .NAV files in DATA.ZIP which do not require a key are:

  BRWIX.NAV - Brandywine
  JAVTX.NAV - Janus Venture
  PRITX.NAV - T Rowe Price International Stock
  LLPFX.NAV - Longleaf Partners
  VWNFX.NAV - Vanguard Windsor II
  DJIA.NAV  - Dow Jones Industrial Average (index)
  SP500.NAV - S&P 500 Index
  FIIIX.NAV - Invesco Industrial Income
  TWBIX.NAV - American Century Balanced
  VWINX.NAV - Vanguard Wellesley
  NCINX.NAV - Nicholas Income
  LEXMX.NAV - Lexington Goldfund
  FBIOX.NAV - Fidelity Select Biotechnology

Examples:
  A0 BRWIX.NAV BRWIX.DAT
will create an unencrypted file called BRWIX.DAT.
  A1 ANALX.NAV ANALX.DAT
will create an unencrypted file called ANALX.DAT.
  A0 ANALX.NAV ANALX.DAT
will give you an error message, since ANALX.NAV requires A1, because a key is
necessary.

A1 will accept a KEY in one of two ways: (1) /KEY= on the command line, (2) a
file called KEY in the current directory.


Encrypting .NAV Files
---------------------

X0.EXE and X1.EXE are programs to encrypt plain text files; they are the
inverses of A0.EXE and A1.EXE. You may need to use them if, for example, you
want to make some modifications to a .NAV data file. X0 performs default
(non-key) encryption, and needs only two parameters: the names of the source
and destination files. For example,
  X0 BRWIX.DAT BRWIX.NAV
forms a default encryption of the plain text file BRWIX.DAT and puts it in
BRWIX.NAV. X1 performs key encryption, and works identically, except that a key
must be present. If there is a KEY file it will be used. If not, or if a
different key is needed, X1 accepts a /KEY= parameter:
  X1 /KEY=FOO BRWIX.DAT BRWIX.NAV


Key
---

Once you have registered Winnav and have the encryption key, select the Key
Update... option on the Update menu to set it. You will also do this when you
receive notification of a key change. This creates a file called KEY in the
same directory as WINNAV.EXE, usually C:\WINNAV, containing the key on a line
all by itself. Keys are case sensitive; FOO and foo are different. The key will
be changed every six months, in January and July. Check near the top of README
(this file) for the date the current key was created, and the expected date of
the next key. Keys are limited to 32 characters, and cannot be blank.


Maximum Data Sizes
------------------

There is no fixed limit on the number of funds that can be analyzed or the size
of each. Approximately seven years of data is the best. With less than that,
the confidence level is not so high that the moving average values have
accurately captured the behavior trends. With more than that, it is possible
that the moving average values are trying to capture several different types of
behavior patterns. For instance, manager changes or objective changes can
easily occur in long price histories. Significant asset growth in a fund can
change the behavior trends too.


Dates
-----

Winnav is written so that the earliest year it can handle is 1960. Since dates
in .NAV files are specified by two digits, this means Winnav can handle
anything from January 1, 1960 up to December 31, 2059. To enter dates such as
1/1/2000 use the form: 1/1/00. The earliest date used in the current set of
.NAV files is 1/1/86. To keep columns lined up in the data files, dates can
have leading zeros, such as 01/01/00; Winnav will ignore the leading zeros.


A $1 Investment
---------------

Since all mutual funds and indexes have different share prices, Winnav puts
them all on the same scale by investing $1 in each of them on the earliest date
for which there is data, and following what happens to the $1 investment as the
share price fluctuates, distributions are paid and reinvested, and share splits
occur. This is why the graphs for all funds start at $1 on the left-hand
vertical axis. This is what is referred to as normalization.


Accuracy
--------

You should treat the results of Winnav as a very good approximation of the real
world. Don't expect the yearly results to match numbers in prospectuses, ads,
or newsletters. Winnav data is typically sampled once a week, on Friday or the
weekend. Also, some distributions are recorded on X-dividend dates, but
reinvestment is not calculated until the next Friday/weekend day, so there will
be a small amount of error. To be more accurate, the NAV on the X-dividend date
should be present, but this is not available for all of the current data sets.
The more accurate method is used for most distributions paid in 1996 and later,
but not for some prior data.


Tax Efficiency
--------------

Some of the sources of data do not provide distribution data explicitly;
instead, they use the distributions to adjust the price history, and then omit
the distributions. This is fine for reflecting the true performance of the fund
(ignoring taxes), but it loses important information. You cannot tell how much
of a tax burden the fund has created, year to year. For this reason, some of
the .NAV files have excluded regions. The purpose of these regions is to omit
certain time periods from the tax efficiency calculation, since they include
price data that has been adjusted for distributions.

Select the Janus Venture fund and switch to its fund tab. Press D to see the
distribution graph. This is an example of a fund for which all the
distributions are present; Janus Venture pays distributions in December of each
year. Now go back to the Funds tab and select Longleaf Partners, and switch to
its fund tab. You will see there are distributions from December 1995 on, but
none previous. This fund pays a distribution every year, just like Janus
Venture, but because the data for this fund comes from a source that uses the
distributions to adjust the price history, the distributions are not present.
The tax efficiency is still correct, however, because the adjusted region has
been excluded from the tax efficiency calculation. Once a data set is acquired,
distributions are maintained explicitly.

Tax efficiency does not mean anything for indexes, such as the S&P 500 or DJIA.


Good and Bad Funds
------------------

How were the funds in DATA.ZIP selected? For most of them, they were selected
because they fit these criteria as worthwhile potential investments: low or
no-load funds with low total expenses, long-term, experienced management, and
consistently good long-term performance. But you'll find some outstanding load
funds, and some newer funds too. You'll also find some of the worst funds,
which were specially selected to demonstrate not only the best, but also the
worst that you can find in the mutual fund universe. Some of these are:
  American Heritage
  Steadman American Industry
  Comstock Capital Value A
  Pathfinder (renamed from Prudent Speculator)
  44 Wall Street
  Mathers
  Rightime

There are also some funds included for their extreme volatility, such as
Lexington Strategic Investments, Bruce, Lexington Troika Dialog Russia, and
Matthews Korea. Don't take the presence of data for a fund as an indication
that it is a good investment.

The purpose of these funds is for comparison with other funds to evaluate
potential investments. You won't find many bond funds, because they are
difficult to maintain up-to-date data for. Bond funds pay dividends frequently,
and it is difficult to gather and maintain extensive distribution histories for
them.


Incorrect Data
--------------

If you find data which is not correct, such as missing distributions, please
send email. If you can supply the missing/correct data, that is an added plus.
Say for example Janus Venture, which as a typical smallcap growth fund normally
pays distributions once a year in December, pays an additional distribution in
April. There is a good chance it will be missed, as distributions would
normally not be checked for until December (or January). You can determine if a
distribution is missing by viewing the distribution graph. Often a sharp,
unexpected drop in the NAV value will also indicate a missing distribution; but
if the drop is not sharp, it may be overlooked.


Stocks?
-------

After you register, get the encryption key, and start viewing the entire set of
funds, you'll notice there is one for Microsoft stock. While Winnav is intended
for analysis of mutual funds, it can be used to analyze price trends on other
securites such as individual stocks, as long as there is a price history
measured at regular intervals, ideally weekly closing prices.


Missing Distributions
---------------------

You should be suspicious if you open the distribution graph and see no
distributions. Most funds pay at least one distribution each year, usually in
December. If you see only recent distributions it means previous distributions
have been used to adjust prices, rather than being represented explicitly in
the data. Funds with short histories (two years or less) may not have
experienced enough turnover yet to require a distribution. The detailed data
required for the most precise calculations are: the X-date (date on which the
distribution affected the reported price), amount of distribution broken down
by type (dividend, short-, mid-, or long-term capital gain, in cents per
share), and the reinvest price on the X-date.


Floating Point
--------------

Winnav is written in C. Winnav uses very few floating point operations; most
calculations are done with integers. The only floating point operations are
done to map the graph to a logarithmic scale.


Disclaimer
----------

Tekniq tries to provide accurate, up-to-date data on all the mutual funds and
indexes that Winnav tracks, but accuracy cannot be guaranteed . Use this
information at your own risk. Tekniq is not responsible for financial decisions
you make using this program and data. If you are going to make an investment
decision, don't base it solely on this program and data; confirm it first with
other sources of information. Only make the decision if you are willing to
accept full responsibility for it.


Other Mutual Fund Factors
-------------------------

Winnav performs technical analysis on mutual funds. There are other fundamental
factors you should consider before selecting a mutual fund.

(1) Portfolio manager. Who runs the fund? How long have they been in charge?
If not long, were they in charge of another fund prior to that? How was their
record? Some fund families attempt to hide their portfolio managers by stating
their funds are run by a team, the members of which they do not name. They are
attempting to nullify the effects of a future departure of a star manager,
which can cause shareholder assets to be withdrawn, perhaps to follow the
manager to their new location. How old are the portfolio managers? If they are
70 years old, you have to wonder how long they will continue to be on the job,
even if they have an outstanding record. What if you invest, and they announce
their retirement the next day?

(2) Fund objective and market capitalization, as affected by asset growth due
to outstanding recent performance. Some funds that start out as outstanding
smallcap funds become midcap funds with several billion dollars of assets. In
general, smallcap funds are most effective when they remain relatively small
(under a billion dollars of assets). If significant and rapid asset growth has
occured, previous performance should be discounted. Be sure the fund invests in
what you think it does. Some funds with "blue chip" in their name don't invest
in blue chips, etc. Read the prospectus and annual report.

(3) Management fees and loads. Expensive funds need to do that much better than
efficiently run funds just to match their performance.

(4) Turnover. Low turnover funds in general will not generate as much of a tax
burden due to capital gains distributions.

(5) Foreign exposure. Many domestic equity funds have significant overseas
investments. Be sure to consider this if the percent of foreign investments is
an important part of your portfolio strategy.


Bugs, Etc
---------

If you notice a bug (error in the program), or an error with the data (such as
a fund in the wrong category) please send email, with as much detail as you
can.


Anything Missing?
-----------------

Is this documentation complete and easy to understand? If not, please send
email on what was left out, or not explained clearly enough.


Future Releases
---------------

There is a long list of things to improve Winnav and add new features. For
right now this list will not be public, but feel free to email suggestions for
your favorite feature, or your favorite fund or index you'd like to see added.


