Category : Science and Education
Archive   : ECON.ZIP
Filename : ECON.TXT

Output of file : ECON.TXT contained in archive : ECON.ZIP


DC Econometrics

Copyright 1989

Table of Contents

Software License
1. Introduction
2. Getting Started
2.1 Required Hardware
2.2 Making a Backup
2.3 Running the Program
3. Main Menu
3.1 Input Monthly Data
3.2 Econometric Forecasts
3.3 Play "WHAT IF" Games
3.4 Edit Files
3.5 Historical Forecasts
3.6 Adjust File to New Baseline
3.7 Exit the Program
3.8 Help
3.9 Printer Options
3.10 Print Registration Form
4. Using the Forecasts
5. The Econometric Models
5.1 Checking the forecasts
5.2 Details on the Regressions
6. Getting Help
6.1 Error messages
7. Recommended Reading
8. Placing an Order

Software License

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

The econ software recorded on disk is copyrighted software of DC
Econometrics, and all rights are reserved. DC Econometrics
authorizes you to make archival copies of the software for the
purpose of backing-up our software and protecting your investment
from loss. You may give away copies of this shareware program to
others and you may make it publicly available on bulletin board
systems. You may not distribute copies of the output forecasts
of the program without written permission from DC Econometrics.

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


DC Econometrics warrants the diskette and documentation provided
upon registration to be free of physical defects in workmanship
and materials for 90 days from date of registration. In the event
of notification within the warranty period, DC Econometrics will
replace the defective diskette or documentation.

The remedy for breach of this warranty shall be limited to
replacement and shall not encompass any other damages, including
but not limited to loss of profit, and special, incidental,
consequential, or other similar claims.

DC Econometrics excludes and disclaims any and all other
warranties expressed or implied, including but not limited to
implied warranties of merchantability and fitness for a
particular application.

DC Econometrics and its affiliates cannot and do not warrant the
accuracy, completeness, currentness, merchantability, or fitness
for a particular purpose of its software or data. In no event
will DC Econometrics, its affiliates, agents, or licensors be
liable to you or anyone else for any decision made or action
taken by you in reliance upon this software or its output. The
entire risk as to its quality and performance is assumed by the
purchaser. The purchaser relies on the software entirely on his
own risk.

In no event will DC Econometrics be liable for any loss of profit
or any other commercial damage, including but not limited to
special, incidental, consequential, or other damages. DC
Econometrics and its affiliates are not responsible for any cost
of recovering, reprogramming, or reproducing any program or data,
or damages arising out of the use of this product, even if DC
Econometrics has been advised of the possibility of such damages.

This statement shall be construed, interpreted, and governed by
the laws of the state of Colorado.


This program contains several econometric models to forecast the
stock market, interest rates, and inflation. It forecasts all of
them 3 months, 6 months, and 12 months in the future. There is
also an asset allocation routine to calculate suggested

Once a month, you enter 8 numbers: stock prices, interest rates,
CPI, unemployment, P/E ratio, and dividends. These are available
from many sources, but I find Barron's most timely and
convenient. The software stores the new numbers and uses its
historical database to calculate predictions that you can use to
find new Bull or Bear markets.


2.1 Required Hardware

The program is designed for IBM personal computers and
compatibles with MS-DOS or PC-DOS 2.0 or above. It will work
with IBM PC, XT, AT, and PS/2 machines. You also need 256K of
internal memory and one 5 1/4 inch or 3 1/2 inch disk drive.

IBM, AT, and XT are registered trademarks of International
Business Machines Corp. MS-DOS is a registered trademark of
Microsoft Corp.

2.2 Making a Backup

Disks are fragile, so you should make a backup copy as soon as
possible. Since the program stores historical data, you should
make a backup copy every few months, rewriting the old backup.
If you have a power failure while the program is writing data, a
file could be lost.

To make backup to floppy disk:

1. Boot up in MS-DOS
2. When you get the A> prompt type: diskcopy

The DOS disk may need to be in the A drive
if you have no hard disk. The computer will
Insert SOURCE diskette in drive A:

3. Insert the ECON disk and press any key
4. When it asks for TARGET disk, insert a blank
5. Verify that the following files are located on
your TARGET disk:


To make backup to hard disk:

1. Boot up in MS-DOS
2. Put SOURCE diskette in drive A
3. Create a directory on the hard disk
mkdir \econ
4. Copy files to hard disk
copy a:*.* c:\econ
5. Verify that the following files are located in
the directory:


2.3 Running the Program

1. Boot up in MS-DOS
2. Insert the ECON disk into the floppy drive or
move to the \econ directory (cd \econ)
3. Type: ECON (and press Enter)
4. The program will load, and the shareware
message will come up. Press return. You
will then see a list of options for output
devices. I usually choose 1 for screen,
or 2 for printer.


The program reads in the historic data. This takes one minute.
After the data is loaded, the main menu is displayed:


You decide which choice you want, type its number (1 to 10) and
press Enter. The next ten sections will describe the function of
each choice.

3.1 Input Monthly Data

Once a month, new data needs to be entered. I get this data from

the first issue of Barron's available each month. Other sources
may be used, however. Barron's is available on Mondays with
numbers from the previous week, so if Friday was in the new
month, I use those numbers. You only need 8 numbers. It is best
to record them for future reference. A log sheet for this
purpose is enclosed.

You may subscribe to Barron's by writing to Barron's, 200 Burnett
Road, Chicopee, MA 01021. Or call 1-800-328-6800, Ext 292.

If you can't get the data for the first week in the month it is
OK to use next week's numbers. Small changes do not affect the
forecasts, but it's best to be consistent.

The data is stored in ascii files so you can use them easily.
The program stores 25 years of history. Every 5 years, on years
ending in 0 and 5, the oldest 5 years of numbers are erased. So
if you want to keep older data, archive a copy of the files soon.

Here is an explanation of the 8 numbers you enter monthly:

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

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

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

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

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

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

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

S&P 500 P/E Ratio: This is the Price/Earning ratio of the S&P
500, reported near dividends.

3.2 Econometric Forecasts

After entering the new data, choose this option 2 from the main
menu. The predictions will be displayed on the screen and dumped
to the printer if you chose the print option earlier. Forecasts
include the S&P 500, bonds, T bills, and inflation, all 3 months,
6 months and 1 year in the future.

The program calculates a recommended asset allocation . The 3-,
6-, and 12-month forecasts are combined to produce an estimated
return for the near term. The calculated yields are displayed on
an annualized basis for easy comparison. The dividend return is
added to stocks' return from appreciation. The asset allocation
routine looks at a portfolio containing a mix of three assets:
Stocks, 30 year T bonds, and 90 day T bills.

The estimated return and annual standard deviation of return for
each asset is displayed. Two portfolios are calculated. The
Conservative Portfolio is the one with the minimum standard
deviation of any possible combination of these 3 assets. It will
be mostly T Bills due to their risk-free nature and low standard
deviation of return.

The Aggressive Portfolio is willing to take more risk if more
return is possible. It aims for a return halfway between the 2
highest yielding assets. While many combinations will achieve
this return, the Aggressive Portfolio displayed does so while
accepting the minimum risk necessary to get the return.

If you want to get more aggressive, add more of the highest
yielding asset. There is an "efficient frontier" of portfolios
which achieve a given return at the minimum risk. This can be
thought of as a curved line starting at the Conservative
Portfolio, passing through the Aggressive Portfolio and ending at
100% of the highest yield asset. You can get a good
approximation of intermediate points with simple averaging of the
above portfolios.

Assets which have a negative estimated return (possible for
stocks or bonds in bear markets) are immediately eliminated from
consideration because cash in a mattress has a 0% return with
zero risk. T bills will probably look better than cash.

3.3 Play "WHAT IF" Games

This option allows you to enter data and get forecasts without
storing the numbers. It is useful for checking effects of
surprises such as market crashes, big up days, prime rate
increases, or other news which causes concern. It also allows
you to enter imaginary data and play with the numbers to get a
feel for what is bullish or bearish. Use this routine to enter
the most current data to get forecasts weekly if you like.

All 8 numbers described in "Input monthly data" must be entered.
You can input these numbers for as many months as you choose.
For reference, the most recent data is displayed. To re-use a
displayed number, just hit Enter when asked for its value.

3.4 Edit Files

If a wrong number is entered and stored on disk, the problem can
be fixed by editing the data file.

1. First, choose which of the 8 data files you want to
edit. A list of entries is printed with a reference number
to the left of each one.

2. To change an entry, enter its reference number, then
change the value. To delete the last data value, enter
zero for its value. Deletions are not allowed in the
middle of the list. The last 12 entries are displayed, but
older entries are available by entering their reference

3.5 Historical Forecasts

Enter a year and month from the past and the program will use its
database and models to give you its forecast and asset allocation
for that time. This allows you to check the program's ability to
spot past market movements. For example, look at the great bull
markets starting August 1982 or December 1974. Test it against
the August 1987 peak before the October crash.

The historical forecasts are calculated from data available at
that time, using the same models used to make the current
forecasts and the same asset allocation routine. The linear
regressions used to create the models used data from 1963 to
1989, so the models will perform well over that time. They
cannot be guaranteed to continue to perform as well in the

3.6 Adjust File to New Baseline

This routine is rarely used. Prices are subject to large changes
over decades and occasionally the Commerce Department will make a
major adjustment. Consumer prices use 1982 to 1984 for the base
year (1982-1984=100). The base year was once 1967. This
adjustment caused CPI values near 300 to plunge to 100 when
prices actually hardly changed. The computer could interpret
this as a crash in prices, so the historical data must be revised
to the new index.

To do this, enter a number from the old index and the equivalent
value from the new index. The program will adjust all numbers.
If one of the new numbers has already been entered, this routine
will adjust it improperly. Use EDIT to verify that everything is
OK after adjusting the file to the new baseline. Only CPI and
Stock prices will need this adjustment since the others are
expressed in percent.

3.7 Exit the Program

Choose this when you are finished and want to return to DOS.

3.8 Help

A short explanation of main menu items is available. Use the
Print Screen (PrtSc) key if you want a hard copy of the paragraph
displayed on the screen.

3.9 Printer Options

Output may be directed to screen, printer, files, or other
devices. Choose from the menu. Choice 1 directs output to
screen only. Choice 2 works for most printers. To direct output
to a file, choose 6, and enter the filename.

3.10 Print Registration Form

This will send a copy of the registration form to your printer or
other output device. It goes to LPT1: unless you use Printer
Options to choose another device. When you register, you will
receive a printed manual and a disk with current monthly data
files. The registration fee is $39.99.


Many profitable strategies exist. One should be chosen that fits
your available capital and tolerance for risk. The less capital
you have, the more commissions will consume. Frequent trading
can be very expensive. This program tries to find the large
moves which continue for months or years. You probably should
not make every change called for monthly in the asset allocation

Backtesting the model over the period 1971 to 1990 shows a 16%
per year average compound return from investing 100% of your
money in the asset (S&P 500, T Bonds, or T Bills) forecasted to
perform best under asset allocation. This method resulted in 2.1
trades per year on average.

Remember, these forecasts are not perfect. Like weather
forecasts, they are subject to error. I try to give you an idea
of the errors by reporting expected standard deviations under
asset allocation. These are the standard deviations observed
from 1963 to 1989. Standard deviation is a term from statistics
describing a bell curve distribution. 68% of the time, the
actual return will be within a range of plus or minus one
standard deviation from the predicted return. 95% of the time,
it will be within 2 standard deviations. Occasionally, there
will be larger errors. The stock market has larger tails than a
normal bell curve and there is reason to believe the standard
deviation is not stable.

No-load mutual funds that allow telephone switching are ideal for
avoiding brokerage fees. Money market funds are similar to T
bills but do not have a $10,000 minimums or commissions.

One conservative strategy would be to switch between a stock
mutual fund, a bond fund, and a money market fund in 50%
increments only, trying to approximate the aggressive portfolio.
For example, if the aggressive portfolio is 45% stock, 35% bonds,
and 20% T Bills, you round it off to 50% stock and 50% bonds. If
it later goes to 35% T bills, you go to 50 % money market and
drop either stocks or bonds, whichever the aggressive portfolio
is weighting less.

The conservative portfolio is the least risky of any possible
combination of the 3 assets. It is always mostly T bills, so
it's not very interesting. Check its yield against the
aggressive portfolio. If you're not getting at least 1% better
expected yield in the aggressive portfolio, stick to the
conservative portfolio and you will not be affected by market

I don't recommend following only the conservative portfolio
because it is always heavily T bills. I print it out because it
is the most conservative portfolio possible and it is useful for
other asset allocation strategies such as averaging the
conservative and aggressive portfolios. It is one endpoint of
the efficient frontier, low return and very low risk. If you are
really that risk-averse, just buy T bills and forget the markets.
Of course, during bear markets, this works great and the
aggressive portfolio should be the same as the conservative, 100%
T bills.

The aggressive portfolio suits me best. Its yield is halfway
between the 2 best assets of the three (stocks, bonds, and
bills). You get some diversity and some action from the stock
and bond markets. If history is a useful guide, you will be on
the right side of major moves. Although its name is aggressive,
there are much more aggressive strategies.

To get really aggressive, hold 100% of the asset predicted to do
best at the beginning of the asset allocation printout. The
program gives its expected returns on stocks, bonds, and T bills.
Note that stock returns include dividends, and all returns
average the annualized yields forecast for 3, 6, and 12 month
periods. The aggressive portfolio is not as aggressive as this
strategy and you can expect to get burned occasionally.

If stocks are predicted to do quite well, you can buy them on
margin and nearly double your return in a bull market. But you
more than double your risk. A 50% market drop will wipe you out.

The risk from stocks is doubled and you have added the risk due
to fluctuations in the interest rate on your margin borrowing.
Due to interest costs, your return does not double. This
strategy and all the ones described previously lie on the
efficient frontier.

The efficient frontier is the imaginary line connecting
portfolios with minimum risk for their expected return. The line
starts at the Conservative portfolio, passes through the
Aggressive portfolio, and continues to 100% of the highest yield
asset. If the return on the highest yield asset is greater than
the margin interest rate, the efficient frontier extends to a
fully margined account containing the highest yield asset.
Minimum risk for their expected return does not imply that they
are all safe or that you should take such risks. A fully
margined account would have been wiped out several times over the
past century. Expected returns and actual returns will differ.

If you want even more risk, use the options market. Wait until
the S&P 500 is expected to advance 20% per year and buy calls.
Or buy a call after a 5% dip in a bull market. It is easy to
lose all your money if you are wrong, so treat this like gambling
and bet only what you can afford to lose. It is speculation, not

For the totally crazy, there are the futures markets. 90% of the
players lose money here, so I do not recommend it. You can lose
more than your original investment and limit moves mean you can
be stuck in a losing position. The advantage is that you get the
gain or loss on a large block of stock represented by the S&P 500
index for a reasonable commission. It is a game for experts
only, armed with more knowledge than this program provides.
Large sums of DISPOSABLE income and capital are required. T
bills and T bonds also have futures markets.

If you are playing the futures, this program should be useful to
help you find the major trends. The trend is your friend. More
money is made in the direction of the trend than on the reactions
against it. You can be bailed out of losing trades when the
trend re-asserts itself. Bull markets can be bought on 5% dips
but not bear markets. If you have short term indicators, use
them too but only play in the direction of the longer term move.


The econometric models used in this program are based on
multivariate linear regressions. The variables used were chosen
from hundreds of others because they performed the best.

In 1987, I used two advisors' models to forecast the stock
market. Neither one predicted the crash that happened in
October. Fortunately, I had sold most of my stock that summer
because I was afraid of the rising interest rates and high P/E
ratios. Still, I couldn't believe how many advisors and other
models missed this major move. The crash of 1987 led to the
development of this program in 1989.

One problem with mathematical models is that they become
obsolete. Stock Index futures make it possible to short stock
and be neutral or long in the market. They also give
institutions more reason to hold cash. Therefore short interest
and mutual fund cash, 2 good indicators, have changed in meaning.
The options market is larger now by far than it was 10 years ago.
Odd lot traders now use options. Models constructed ten years
ago often did not plan for such changes.

To avoid these pitfalls, I chose the simplest, most elementary
variables I could find. They also produce good correlations,
which should not be surprising, since they are basic measures of

Interest rates tell about the attractiveness of alternatives to
the stock market. They also tell whether the economy is booming
or busting. Interest Rates are a measure of the supply and
demand of money. When rates are high and rising, stocks will be
falling. If I could have only one indicator, it would be short
term interest rates.

Consider market history 1948 to 1987. When T bill rates fell
December to December, the return on the S&P 500 averaged 23.4% in
the following year. When T bill rates rose, returns averaged
6.7%. T bill rates were rising going into the crash of 1987.

The yield curve compares short term rates to longer term rates.
When short rates are higher, the yield curve is said to be
inverted. It is not normal and usually precedes recessions.
Stocks usually fall during these times. In his book Stock Market
Logic, Norman Fosback reports the impact of the yield curve.
Normal yield curves were followed by an average 11.5% per year
gain on the S&P 500 in the years 1941 to 1975. Inverted yield
curves were followed by an average 0.7% loss.

Consumer prices are a measure of inflation. When inflation is
low, interest rates stay low, and the stock market rises. High
or rising inflation can be curbed by raising interest rates to
choke off demand. This also strangles the stock market. High
inflation offers people an alternative to the stock market. It
is better to spend the money on goods before prices rise, or
invest in real estate.

Unemployment also exerts political pressure on the Fed. They are
hesitant to raise interest rates during high unemployment. The
economy needs stimulation, not restraint. A good time to buy
stocks is when unemployment is rising in a recession.

Dividend yields are an excellent long term forecaster. They set
record lows before the October 1987 crash. They were low in 1929
and also in 1973 before bear markets. Low dividends called the
sharp 1962 drop. High dividends predicted the 1982 bull market,
the 1975 bull market, and the long advance of the 1950s.

In the years 1948 to 1987, dividend yields above 4% on the S&P
500 led to an average 20.0% return on the S&P 500 the following
year. Dividend yields below 4% were followed by an average 5.1%

Price/Earning ratios are another good measure of value. It is
always safe to buy the S&P 500 at low P/E's. The long term
average is about 14, so a P/E of 8 for the S&P 500 is cheap.
Recessions can depress earnings, so it is safe to buy at higher
P/E's then because good times will return and carry earnings

I believe these variables are of such a basic nature that change
in our markets or economy won't change their effects much. But
if you have reason to suspect these variables, don't follow this
model blindly.

5.1 Checking the forecasts

Here is a simple way to check the model's forecasts for the S&P
500. We can combine T bill rates and dividend yields into a
model that you can do in your head. We have seen the high
returns on the S&P 500 with falling T bill rates, and with
dividend yields above 4%. Combining these 2 variables is even
better. With both variables bullish, the average return on the
S&P 500 is 30.8% per year. With only one of them bullish, the
return is 9.7% per year. With both in bearish territory (rising
T bill rates on a 12 month basis, and dividend yield on the S&P
500 less than 4%) the average return on the S&P 500 is 3.7% per

Of course the models in the program are much more complex, and
should be more accurate. This example demonstrates the power of
a two-variable model and used data from 1948 to 1987.

The business cycle provides an independent check on the
forecasts. For details, see Bowker's book Strategic Market
Timing. Events may occur somewhat out of order, but you should
be able to get an idea of where the economy is heading. The
sequence of events is:

1) Stock Market bottom
2) Leading indicator bottom
3) Coincident indicator bottom
4) Unemployment peak
5) Official announcement of Expansion
6) Lagging indicator bottom
7) Inflation bottom
8) T bill interest rate bottom
9) T bond interest rate bottom
10) Stock Market peak
11) Leading indicator peak
12) Unemployment bottom
13) Coincident indicator peak
14) Official announcement of Recession
15) Lagging indicator peak
16) Inflation peak
17) T bill interest rate peak
18) T bond interest rate peak
19) Back to Stock Market bottom

If you want graphs of these indicators, subscribe to the Survey
of Current Business by calling 202-783-3238, or write
Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402. The cost is $29.00 per year.

5.2 Details on the Regressions

I used stagewise multivariate linear regression on 25 years of
data spanning 1963 to 1989. In stagewise regression, the best
variable is found and its effect is subtracted out. Then all
variables are examined again for correlations to the residuals.
To enter the model, a variable must have 99% confidence that its
correlation is not due to random variations. An F test was used
for this. The process continues until no more variables can pass
the F test.

Many predictor variables can be constructed from the database.
The Prime rate can be compared to moving averages from 3 months
to 4 years in length. Dividend yields can be compared to T bill
yields. The yield curve can be computed as T bill/T bond rates.
I looked at 165 such predictor variables for each model to pick
only the most effective variables.

Correlation coefficients are a measure of a model's fit to the
data. They range from -1.0 (perfect negative correlation) to 0.0
(no correlation) to 1.0 (perfect correlation). Here is a list of
the model's correlation coefficients:

S&P 500 (3 months ahead).....................R = .53
S&P 500 (6 months ahead).....................R = .64
S&P 500 (1 year ahead).......................R = .80
T Bonds (3 months ahead).....................R = .46
T Bonds (6 months ahead).....................R = .58
T Bonds (1 year ahead).......................R = .74
T Bills (3 months ahead).....................R = .56
T Bills (6 months ahead).....................R = .66
T Bills (1 year ahead).......................R = .68
CPI (3 months ahead).....................R = .83
CPI (6 months ahead).....................R = .87
CPI (1 year ahead).......................R = .90

R values are not the only measure of a model's effectiveness.
There are many ways to get a high R value. One way is to include
a lot of variables which have a low confidence. My 99% standard
is more rigorous than many others. Another way is to regress to
something easy. I am regressing to the changes in my predicted
variables, not to their levels. Over a 25 year period, the
previous day's level of S&P 500 correlates with R > .99 to the
next day's level, but tells you nothing about which way the
market will go. The money is made on the changes, not on the
day's closing value.


Your satisfaction is of utmost importance to us. If you need
help, first consult this manual or the help menu. If that does
not fix your problem, please write to:

2920 Mount Royal Court
Fort Collins, CO 80526

We want to hear your comments, suggestions, and criticism.

6.1 Error Messages

If you ever see an error number, here is a list of the most common

Error# Meaning
------ -------
24 Device time out. COM device?
25 Device fault. Printer interface?
27 Out of paper.
53 File not found. Change directory to the one containing
econ. Type "dir" and check for econ.exe and the 9 data
files. If your prompt is for the C: disk and econ is
on B:, type "b:".


The Encyclopedia of Technical Market Indicators
Robert W. Colby and Thomas A. Meyers
Dow Jones-Irwin, 1988

A comprehensive collection of graphs and computer
research on over 110 indicators.

Stock Market Logic
Norman G. Fosback
The Institute for Econometric Research, 1976, 1984

This book is a thorough discussion of virtually every
stock market indicator in use. Norman Fosback's
scholarly approach to stock market forecasting is
without equal among advisory services.

Winning on Wall Street
Martin Zweig
Warner Books, Inc., 1986

Marty Zweig's emphasis on interest rates and tape
action first influenced me in 1982. He talks about the
market in scientific terms I can relate to as an
engineer. His record proves he is right.

Tight Money Timing
Wilfred R. George
Praeger Publishers, 1982

This book shows the effect of interest rates on the
stock market from 1914 to 1981.

Asset Allocation
Robert D. Arnott and Frank J. Fabozzi
Probus Publishing Co., 1988

Everything you ever wanted to know about asset
allocation and then some. It is a complete discussion
of theory and application. Many contributing authors
present their views.

A Consensus Approach to the Determination of Not-So-Good Years to
Own Common Stock
Edward Renshaw
Financial Analysts Journal/January-February 1989

How to forecast the S&P 500 using T bill rates and
dividend yields. This simple method is similar to the
simple model in the manual, and will usually agree with
the complex models in the software.

Strategic Market Timing
Robert M. Bowker
New York Institute of Finance, 1989

Use predictable turning points in the business cycle to
forecast the direction of interest rates, stock prices,
and other economic indicators. This method provides an
independent check on econ's forecasts.

How to Forecast Interest Rates
Martin Pring

Interest rates are a lagging indicator. They go up
after the economy goes up.


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To register your copy of econ, choose 10 from the main menu to
print a registration form. For your $39.99 registration fee,
you will receive a disk with all current monthly data files and
a printed manual. Registered users may order a new disk with
current data files any time for $9.00. This is handy if you
forget to enter data for a while but want to start using the
program again, or if you destroy your disk. Please specify
5.25" or 3.5" disk.

To view this manual on screen, enter "type econ.txt | more" from
MS-DOS. This will let you see one screen at a time. Press the
space bar to see the next one.

To send a copy to your printer, ready the printer, and type
"copy econ.txt > prn". Don't type the quotes, just the stuff
inside them.

  3 Responses to “Category : Science and Education
Archive   : ECON.ZIP
Filename : ECON.TXT

  1. Very nice! Thank you for this wonderful archive. I wonder why I found it only now. Long live the BBS file archives!

  2. This is so awesome! 😀 I’d be cool if you could download an entire archive of this at once, though.

  3. But one thing that puzzles me is the “mtswslnkmcjklsdlsbdmMICROSOFT” string. There is an article about it here. It is definitely worth a read: