TABLE OF CONTENTS

The Simulation: an Introduction | Vision and Corporate Design | Decision Variables | The Contracts Program
The Market Reports | Firm Reports: Credit, Sales & Production | Firm Reports: Financial Statements
The Scent Industry | Plant and Location  | Subsidiaries | Bankruptcy | Forecasting Demand | NPV | Broker

Broker is an investment simulation. It accompanies the Global View and Contracts programs, but may be played separately. This chapter will explain Broker and its investment components. Furthermore, this chapter will provide you with some insight into establishing an investment strategy and analyzing investments. Broker, unlike the Global View and Contracts programs is not employed by the team, but rather by the individual executive. The Broker program will allow you to explore your own risk threshold.

Soon, you will be out there in the real business world (perhaps you already are). You may be involved in the financial markets through your career, through the fact that your firm's fate will be determined in those markets, or as an individual seeking greater wealth than a salary alone can provide.

As a manager or an individual investor, you must understand how risk, return and market prices are related; how stock prices are determined by the interaction of investors buying or selling securities based on their expectations of corporate profits. Investing involves uncertainty. In order to increase return, generally more risk must be incurred. In the following pages, we will guide you through the Broker simulation.

Broker is an investment simulation which enables you to buy and sell stock as well as treasury bills. The stocks that you can invest in are the simulated start-up ventures run in the main Global View Simulation. By using these start-up ventures as our universe of stocks, you will witness a wide range of investment performance. Some of the corporations will end up in bankruptcy. Some will become star performers. By the end of this simulation, you will have witnessed and perhaps participated in the joy of watching a stock skyrocket in value. Perhaps you will also feel the gut wrenching pain of a corporate team making such serious blunders that your stock value disappears before your eyes.

Broker provides you with the opportunity to learn and to apply your knowledge and skills in financial management. While the focus is on you as an individual investor, you must also come to understand the corporation through stock ownership. We will look at ratios and information that explore corporate performance, risks, and returns. You will view financial management of a firm but do so from an external perspective, not from an internal perspective as a financial manager would.

At the beginning of the Broker simulation, you are given $10,000 worth of cash and can invest in a variety of stocks, a treasury bill fund or a market index fund. Each successive quarter you have the option to review your investment portfolio given the new market information provided from the computer run.

Dividends and interest are paid directly to your account. Interest is charged if you have borrowed funds. Your personal wealth is restated given the current value of your investments. Prior to the next quarterly run, you should reposition your investment portfolio as needed.

There are no taxes to contend with in the Broker simulation (don't try this in real life!). With no taxes, and with the ability to borrow amounts up to your personal worth, large profits can be made if you invest in the right start-up ventures. In real life, there are taxes. Personal loans for investment purposes might be difficult to come by. And, the availability of so many quality start-up ventures would be a rare situation.

Broker is similar to a flight simulator. Each event is a possible real situation, but the number of events and critical situations you will confront never occur with such frequency in life. That does not invalidate the training. The exposure to numerous and varied situations helps prepare you, in a short period of time, for a career in aviation - or in our case, a life time of investing.

Past analysis of performance in the investment simulation has shown that increases in net worth are not dependent on ones major. A finance major, therefore, has no more advantage in building a personal portfolio of stocks than any other major. What does make a difference is the attitude you take toward the simulation. Most of the investors in prior simulations who gained incredible amounts of personal wealth did so because they were eager to learn. They knew that someday they would be investing. They took the time to understand Broker early on. Understanding Broker and how to analyze the stocks available for investment is no small undertaking. It can be done successfully over the entire course. However, the most wealthy individuals in the past were those that took the time to learn about the investment environment as soon as possible. They were not afraid to make mistakes. They accepted risk as a normal part of investing. They took above average risks at the appropriate time, remained flexible in adjusting to changing environments and seized opportunities as they became available.

Within Broker you have options to invest in the following categories:

1. TR-Fund: You must invest $1,000 or multiples of $1,000. The money is invested in treasury bills. Interest is paid quarterly directly into your checking account.

2. Market Index: You can invest in units (shares) of this fund. The value is determined after each simulated run. The value is the average of all stocks in the Global View simulated industries. You are investing in the average.

3. Stocks: You can invest in the stock of any Global View corporation. In Broker, investors may also sell a stock short. This allows you to sell stock which you do not have, in the hope that the price of the stock will decline in value. You can then buy the stock to cover your short sell at the lower price and make a profit.  This option is discussed further in the following chapter.

The Global View Administrators have set up identical market groups. Everything is exactly the same in quarter 1 of year 1. For example, market groups 8, 9 10, 11 and 12 might all be exact copies of each other. Assume they are all Microbrew Industries. Global View is purposefully set up in this fashion so the participants can watch market groups develop into their own unique identities based on the actions of the Corporate management in each market group. Investing in the Microbrew Industry might be a great idea. But which one? Market group 8 might have over built its productive capacity and be engaged in a deadly long term price war; bankruptcies are possible. Stay out of that market group. Market group 11 might have production capacity matched to demand and have a profitable pricing structure. In addition, all the firms seem profitable and well positioned. That means little predatory competition will exist that would otherwise cause market shares and earnings to be extremely volatile. It would seem market group 11 is ideal. The following chapters will help you identify the best investments.

Both Broker and Global View participants should understand that sometimes there are more investors than stock available. In the past this has locked some investors out of opportunities. In some situations investors formed syndicates to manipulate stock price through the buying and selling of large blocks as well as by spreading rumors and hot tips. These problems are not dissimilar to the early stock market experiences in the United States and to some extent the current stock markets in some developing nations.

To handle these problems in Broker, the administrators use a stock valuation program to set the stock prices. The supply of stock issued by a corporation is of key importance in the valuation process. The demand for shares from participants in Broker, however, is not allowed to influence the setting of the share value. The ending share value each quarter is determined by the special stock valuation program in the Global View simulation. The program focuses on past corporate performance, earnings per share past and current, and the riskiness of the corporation. The riskiness is measured, in part, by how volatile the earnings have been and how much debt the corporation carries relative to its equity (debt/equity ratio).

Global View corporate teams should realize they have real investors, that is, real stockholders. And, that those stockholders have real performance expectations. If the firm does not perform, the investor in the Broker simulation does not perform. In many cases, Broker grades may be at risk as well as investment egos.

Furthermore, it is the firm's responsibility to conduct its activities in a legal and appropriate manner. If, for example, a firm does not inform its stockholders of an intent to repurchase or issue additional shares, then they may be held accountable for damages to shareholders.

As a shareholder it is your responsibility to inform Global View Administrators of any violations to this rule which has caused you harm as an investor.

This chapter will help you establish an investment strategy for use in the Broker simulation. Some of the goal setting activity and strategy development will help you define your personal goals and strategic alternatives.

You can run and hide in Broker and perhaps learn some things of value while performing just a little below the average. On the other hand, you can accept the boldest of challenges in Broker, learn a lot and get a lousy grade or a very good grade.

What are your objectives for this course? To secure the best education possible? To get the best grade possible? To pass? To pass with the least amount of time invested?

Do you have the intestinal fortitude to take the risks necessary to achieve your objective? Modest personal goals generally require moderate levels of risk.

Being smart is only a modest help in becoming one of the best. Being a risk taker is only a modest help in becoming one of the best. Being smart enough to know when to take risks is of enormous help in becoming one of the best. But the real key to uncommon success is summoning up the courage to take the smart risk.

Risk accompanies any action that has an uncertain outcome. Generally, the greater the risk the greater the range of possible outcomes. In Broker, taking even the "smart risks" can produce the least desired outcomes. Such is life. You can work very hard at Broker and learn a great deal. Nonetheless, you can analyze, in a most academic and rigorous manner, a great opportunity only to have it fail.

Performance in Broker is measured after each quarterly run. The measurement statistic is Net Worth.

You start with $10,000 in cash and no debts. That $10,000 is your individual net worth at that point in time. Net worth is found by taking all your assets and subtracting all your loans and obligations. The balance is what you own after paying everybody off.

Each person's net worth is published after each run of the simulation program. Names are deleted and a code number you assigned to your account is used to identify your net worth and rank on the list. You know your current standing at all times. In most cases, only the net worth rank on the very last run is used to determine your grade.

Like real life, the amount of net worth has little value unless it is compared to those around you. You might think $150,000 sounds like a great net worth. It certainly is in Haiti. However, if your associates are generally in the $500,000 range you will start to feel rather poor. Therefore, performance is measured by rank, not absolute dollars of net worth.

Your rank early in the simulation can be moved upward. You may have to work harder than other investors in securing and analyzing the available information. You might be forced to take on more risk if your objective is to be higher up in the Who's Who on the Net Worth List. Or, if you reject more work and/or more risk in order to achieve your success, you can rethink your talents, skills, objectives, time and discipline as a mix and revise your personal definition of success accordingly. Some personal objectives follow. Does one fit your needs?

Following are four possible objectives for the Broker simulation. Each of these objectives is accompanied by a set of strategic recommendations for accomplishing the listed objective.

Objective 1: To secure a good return with minimal time and effort in the course.
Strategy: Invest in the Market Index. The Market Index is an average of all the stocks in the simulation. By doing this, you will miss some great learning and investing opportunities but you will avoid consuming your time and effort.

In the real financial markets, the market index option has a counterpart that can be purchased. There are a host of other types of indexes that can be purchased through mutual funds. In a mutual fund, professional investment managers pool monies and manage the securities on behalf of the owners. There is a management fee. While not the best return possible, index funds (and other types of mutual funds) do, over long periods of time, produce a satisfactory return with minimal time and effort.

If your investments need to be liquidated (sold for cash) in the near future, there is considerable risk. In the short run, the markets can be very volatile. They could decline sharply just prior to your needing the cash. Needing money in a short time period and depending on a stable stock market for value, is a high risk situation. Take your money out ahead of time when you sense a reasonable value can be secured. Then store the money in an investment where its value is stable over time.

Objective 2: To secure a very good return with an average expense of hard work and time.
Strategy: Use all your own money, plus borrow money and invest it all in the Market Index or stocks that will yield (earn) more than the interest charge on the money.

Borrowing money is allowed in Broker. As collateral, you can use your net worth. Collateral is an asset that will help protect the lender from loss if you do not repay the loan. If you do not or can not repay the loan, lenders can recover their loss from the forced sale of your asset. Your credit limit in Broker is always equal to your latest net worth. Your net worth in this case is viewed as collateral.

Borrowing for an investment based on your net worth as a base is called leveraging. This gives you extra financial power just as a lever provides extra lifting strength to an individual. You not only have the opportunity to make a profit on your money, you can also make a profit on someone else's money.

The key word here is profit. If you make a mistake or if events simply do not evolve as predicted, you may have a loss. You lose some of your money. Too bad! But, you also lost some of the lender's money! Plus, you owe the lender interest. In total then, the loss on your money, the loss on the lender's money and the interest must all come out of your net worth.

Leverage creates additional opportunities for return and threats of greater losses. Do you still want something better than just a good return?

Leveraging in the real financial markets is possible. I recommend some experience be gained as an investor prior to taking on additional risks through leveraging. One of your first real life leveraging experiences is probably borrowing for your college education. Since many college students have few assets with any resale value, lenders (sometimes parents) look to future earning power for the repayment of the debt. Let's hope for your lender's sake that you are getting an education that will enhance your earning power, and not just getting a degree.

Another early-in-life leveraging experience is buying real estate. Here, most of security or collateral is in the property being purchased. Therefore, with a modest percentage of your money invested (20% ?) and a reasonable outlook for a solid stream of earnings you can leverage yourself so as to control an asset of considerable value. If housing prices take off, you make a great return on the 20% of your own money invested, and you also "make a killing" since you get the profit off the 80% of the lender's money (less interest). If home prices collapse, say fall 20% due to some local problem, you lost all net worth (equity) in the house. Do you hang in there, keep paying the mortgage and hope some day home prices will come back up? The lender at that point is banking on your solid stream of earnings and desire to keep the house. Don't lose your job or get divorced at this already low point in your financial life.

Objective 3: To achieve above average returns and learn a great deal about analyzing stocks using a great deal of time and energy.
Strategy: Review all stocks, then drop the poor performing stocks out of the average and keep the strong performers. Review new data and portfolio holdings each quarter.

This sounds easy. Review all the stocks then get rid of the dogs. The remaining stocks have to outperform the average. Don't they? Why stop at eliminating the dogs? Get rid of the worst half. That makes pretty good sense. Doesn't it?

It makes good sense to a lot of people. It does take some time and effort. It also requires constant review since "once a dog always a dog" and "once the best always the best" are not true statements.

In Broker, this strategy dutifully applied should produce above average returns. The news, shareholder notices, data, reports and statistics available in Global View give ample time for review and action before the next simulation run takes place. Special news announcements provide information that would only be available to a select group in real life.

Yes this is a good strategy. A well diversified stock portfolio that you carefully monitor over long periods of time is a conservative approach to investing that can be employed in Broker and in real life. On average, real stocks over long periods of time (decades) have had an annual return of about 10 to 12%. This includes price appreciation and dividends but does not consider taxes or commissions. Outperforming the average in real life, however, is much more difficult to achieve than it is in this Broker simulation.

To be diversified in Broker and in real stocks, a portfolio (that is the set of stocks you own), should include about eight stocks that are not dependent on each other. That is, their price movements over time have low correlations to each other. Are all eight stocks tied to the defense industry? To food products? To oil?

Some suggest twelve stocks would provide better diversification. Indeed that is true, but one needs a portfolio with enough dollar value to pay the commissions on a move from an eight to a twelve stock portfolio. At some point, diversification benefits from adding more stocks are offset by the time it takes to monitor the larger portfolio.

 

 

The decision options will now be discussed in detail and a quick reference guide will be provided. As with Global View, most of your work for Broker will be done away from the computer screen as you analyze Industry Reports, weigh the economic and political news, and keep your ear out for any valuable tips floating around executive board rooms.

You will not be able to sign on until quarter 1, year 1 has passed. Until this time the Broker program has no record of Stocks available for sale. In Q2, Year 1 you can use your password to sign onto the Broker program and make your first set of investment decisions.

To begin, sign on to the Global View Broker Program. Once you have done this, you must step through a first time login process.  You will be prompted to enter your password.  This password is different from your team's firm password.  After you have entered your password correctly you will be prompted to enter your last and first name.  A final screen appears confirming the name you have just entered. Be sure to enter your name correctly as this name is used by administrators to make any necessary changes to your account, including restarting you after a bankruptcy.  Once the program has confirmed your name, you will be asked to enter the last 5 digits of your social security number. This number is the code used to identify you on Broker NPV ranking lists. It is not necessary that you enter your social security number but it is important that you remember the code you enter so that you can pick your net worth out of the list (as names are not used).  Once you have entered your code you have completed the initial sign on procedure. The program will not ask you for your name and code again, but will remember what you entered the first time around.

After signing on, the Broker program will start you at the main decision menu.
 

Choosing option [D], display portfolio, will bring up a summary of your personal balance sheet and your portfolio. Your personal balance sheet will be displayed first.
 

Cash	$10000.00	Loan	$0.00
Short Escrow	0.00
TR Fund	0.00
Portfolio	0.00	Net Worth	10000.00
Total Assets	$10000.00	Debt + Equity	$10000.00

Because you will not have made any transactions yet, your account will show only the starting $10,000 in cash. After you have made transactions, this balance sheet will change accordingly.

Pressing any key will take you to a record of your current stock portfolio. This screen will list any stocks which you own, the number of shares of these stocks, the current market price and the market value. The market value is the share price times the number of shares you hold.

Cash = total cash available in a checking account; no interest earned on the account.

Short Escrow = your cash from the sale of stocks that you cannot make delivery on. Cash will not be released until delivery is made.

TR Fund = Treasury fund, investments in T-bills.

Portfolio = the total market value of your portfolio.

Loan = broker loan; created automatically if you keep hitting the B for buy and run out of your own money. Also created automatically if you buy on margin - half your money and half borrowed money.

Net Worth = (cash + escrow + TR Fund + stock portfolio at current market value) - (your broker loan) = what you are worth.

Choosing option [Q], quote stock price, provides a listing of all available stocks and the prices at which you can purchase or sell them. Some computers will accept a "print screen" command if you want a hard copy of this page.

Option [I], increase TR fund, and option [R], reduce TR fund, will move you into or out of the TR Fund (Treasury Bills).

You must invest in units of $1,000. Earned interest is paid automatically to your cash account each quarter. Many individuals who are not willing to take high risk invest in TR funds. This is also a good place to store funds while a recession is in progress and stock prices are weak or declining.

Don't leave large amounts of money in your checking account - at least invest in T-Bills.

In the same regard, we strongly advise against borrowing money for stocks and at the same time, keeping an investment in the TR Fund. In effect, you are earning at 8% per year or 2% per quarter on T-bills while at the same time paying 12% or 3% per quarter to borrow money. In essence, you are paying 1% per quarter to use your own money.

In the real world, many investors do the same thing. Such financial practices produce a security blanket effect. Like the old saying "Save for a rainy day", a savings account or TR fund is comforting in this case even if an unsound financial practice.

Option [B], buy stocks for cash, will allow you to purchase stocks. Your cash will be used first. The program will then automatically start borrowing from the broker at 4% annually above the T-bill rate. The interest rate is subject to change. If, for example, the T-bill rate is 8%, the loan interest will be 12% (8% + 4%) annually or 3% quarterly.

If you don't want to borrow from the broker (called going on "margin"), stop buying stock when your cash account is at a zero balance.

Each time you buy, your cash is charged for the current value plus a nickel for each share traded. The $.05 transaction fee is subject to change. If you have exceeded your credit limits, you will receive a message. The entry will be rejected and canceled.

You must purchase shares at a minimum of 100 shares.

Option [S], sell stocks for cash, will allow you to sell shares. Commissions are charged both on the purchase and on the sale of stock and the Market Index. Commissions are set at $.05 per share traded. This commission may be subject to change.

Option [M], margin purchase, does the same thing as a [B], buy stocks for cash, except the program will automatically take half the purchase price from your cash and half the purchase price from a broker loan. The [B] command requests the use of all your cash until it is gone and then initiates a broker loan. Most students find the [B] command the most useful.

It is, however, worth taking the time to consider an important aspect of going on margin. It can be summed up by saying, the rich get richer at an increasing rate. Consider that you doubled your money to $20,000 through moderate risk taking. Compare that to a class mate that took more risk ( buying on margin, or leveraging). Assume that classmate and competitor was successful such that she has $30,000 in net worth.

Now, let's assume a corporation issues a legal announcement that they are going to buy back 50,000 shares of their outstanding stock, odds are, the stock will have an immediate and sharp increase in the next simulation run. Assume both of you intend to buy all the shares you can! You invest all your money and borrow (buy on margin) to your maximum which is equal to your net worth. In this example, you can invest a total of $40,000 ($20,000 yours and $20,000 borrowed). Your classmate can invest $60,000.

Let's say the stock jumps 20%. Your increase in net worth (disregarding interest charges) would be $40,000 X 20% or $8,000. Your portfolio equals $48,000. Subtract the $20,000 broker loan and your net worth equals $28,000.

Your classmate would have a gain of $60,000 X 20% or $12,000. Her net worth would equal $72,000 - $30,000 = a net worth of $42,000.

Before the quarter, your net worth was only $10,000 less than your friend's. Now she is $14,000 ahead even though you both margined and both had the same stock. Next time she can command $42,000 + $42,000 loan = $84,000 in financial power. You can command $28,000 + $28,000 = $56,000 of power. The financial power gap widens.

This is not to say you should recklessly use margin to its full advantage every time. Margin is financial leverage. It also produces risk and it is dangerous. Understand financial leverage and make it work for you within the risk level you can tolerate. If you can't tolerate the maximum risk strategy, at least watch those that routinely engage in such practices.

Of particular interest is watching a fully leveraged person that generally invests in only one stock. If that stock flounders, you will see what goes up at an accelerated rate, also comes down at an accelerated rate.

Option [L], loan payment, allows you to pay off your debts. Sometimes a portion of the debt is paid off automatically when you sell a security. This may occur if the security sold was originally purchased on margin (half your money, half borrowed) or if you are near the maximum margin limit.

Option [T], sell short, and option [C] cover short position, will sell a stock short or cover a previous short sale. This is a very simple procedure but one that goes counter to the "normal" thought processes of the human mind. With this real life opportunity, you can make money on any stock that falls in price. Let's use an example to show you how.

Firm 47 makes a legal announcement that they intend to issue 200,000 shares of stock. This is a tremendous issue and the firm is suddenly a high risk venture. What are they going to use the money for? Do they have a management team that can pull it off? What if competition derails their plans? On this announcement the stock will certainly, well, almost certainly, fall.

Let's assume the share price of Firm 47 is now at $12.50. You expect it to fall by $3.00 down to $9.50.

Get on that computer before the deadline date and sell all the 47 stock you can. You do not have to own it to sell it as long as you do it legally through a short sale. Use the [T] option to sell stock you do not own? Is this great stuff or what? It is all legal and actually done in the real markets.

The $12.50 you get for the stock will now go into your escrow account. It's your money, but you sold something you didn't have. The broker will keep the money in escrow until you deliver the actual shares of stock.

Now, wait for the simulation run. Hope the managers in 47 do not make a data entry error.

After the run, assume the team entered everything correctly and the stock has fallen to $7.50. Not only did they sell all the shares but were also hit hard by a competitor starting a price war. You owe shares to cover your debt to the broker, not money. So, buy the shares of Firm 47 at $7.50 by pressing with great joy, [C], cover short position. As soon as the [T], short sale, is covered using option [C] the $12.50 per share in your escrow account is released to your cash account.

You sold shares of 47 at $12.50 and later bought them at $7.50 after the run to cover (or deliver) the shares you were short. The difference is your profit of $12.50 less $7.50 = $5.00 per share. Outrageous! And, you did it all on borrowed shares. None of it was even your own money!

Yes, but... Someone always has a "Yea, but". What if they forgot to sell the 200,000 shares of stock and the price goes up? If it went to $14.50 you can press "C" to cover. Then, $14.50 per share will come out of cash and the $12.50 will be released from escrow into cash. You lose $2.00 per share. Yea, but... you don't have to cover, just ride it out into next quarter and hope they sell the 200,000 shares.

If the firm made a public statement that they would issue that number of shares and did not do so, they may face a class action law suit. Such a suit would be brought by the game administrators on behalf of angry shareholders. Some settlement might be negotiated prior to actual legal action. In some cases, negotiations could extend over two simulation runs leaving the investors wondering what to do about covering their short sale.

There are limits to how many shares of stock you can sell short. You are borrowing shares of stock to sell and that is viewed as equivalent to borrowing money (going on margin). The value of your short sale and broker loans combined, cannot exceed your net worth.

Option [E], exit this program, allows you to exit the Broker program. On the way out of the program, you will be provided with a visual summary of your balance sheet and the day's transactions.

A margin call is a notice to reduce your loan. If you buy on margin, you must have at least 1/2 of your own money invested at all times. Assume, you are fully leveraged and you lose money during the simulation run. The loss comes entirely out of your half plus interest charges on the loan. You no longer have your money in 1/2 of the investment. You will receive a margin call. This is a public notice by name, not by code. You are required to sell some shares of stock and apply the proceeds to the loan. Keep doing so until the loan is reduced to equal no more than 1/2 of your total net worth.

The margin call warning will appear upon your entry into the program until such time that you have reduced the broker's loan to no more than 1/2 your net worth. Interest charges will apply. Small amounts are exempt to interest charges.

Example: $40,000 invested; 1/2 yours and 1/2 is a broker loan. The $40,000 investment takes a hit and after the run is worth $35,000. The broker loan is still $20,000. Your net worth is now $15,000. You will receive a margin call to repay $5,000. immediately. You must sell $5,000 of stock plus enough to cover commission costs. Remember your net worth will drop by $.05 per share to cover the commission costs and thus you need to repay the $5,000 plus commission costs to bring the loan equal to your after the transaction net worth.

Interest charges on broker loans are charged against your cash account or added to the broker loan each quarter. Dividends paid by firms on shares held at run time are automatically deposited into your cash account.

The following is a quick guide that you may find helpful when entering Broker decisions.
 

Increase TR Fund [I]

When you type in "I", you will see

Buy how many units of TR Fund @ $1000/unit?

Reduce TR Fund [R]

Selecting "I" will produce the following:

Sell how many units of TR Fund @ $1000/unit?

Buy Stock for Cash [B]

When you press [B] the program will lead you through the transaction:

This Transaction involves shares of:
1. one stock
2. the market index fund

Enter Number of Shares Traded (in hundreds)

For the Stock Traded:
Enter the Market Group Number:
Firm Number:

Buy for Cash 100 shares of 23 @ $4.50
Is this correct? (Y N)

Read the order before hitting "Y". The number of shares are actual, not in hundreds. The above purchase is for industry 2 and Firm 3. If you wanted firm 2 in industry 3, that would be written as 32. The market group number is always first, the last digit is always the firm number.

If you make a mistake and wanted 32 instead of 23, choose [S], sell stocks for cash, from the main menu and sell 23, then hit [B] and buy 32. You will have corrected your error. You will, however, be charged a commission for the first buy, the following sell and the correct buy order. Your broker loves you.
 

Sell Stocks for Cash [S]

The program will lead you through the transaction the same as a [B], except the "Buy for Cash" will be replaced by "Sell for Cash". Remember commissions are charged. You must have the stock in your portfolio in order to sell. You must also have at least as many shares as you requested be sold. If you want to sell shares you do not own, that is a short sale. See option [T].
 

Buy on Margin [M]

The program will lead you through the transaction the same as a [B], except the "Buy for Cash" will be replaced by "Buy on Margin". You must have enough cash in your account to cover 1/2 the stock value plus the commission. You must also have enough left in your line of credit to cover the other 1/2 of the transaction.
 

Sell Short [T] or Cover Short Position [C]

The program will lead you through the "Sell Short" transaction. [T] is to execute a "Sell Short" order and [C] is used for a "Cover Short Position". You must have enough line of credit remaining to cover the entire short sale including commission. You cannot use "C" to cover a non-existent short sale. An error message will be printed in that case. Check to make sure you have the market group and firm number in the right order. Check to make sure you entered the correct number of shares. Remember the order always goes in lots of 100. The confirmation on the screen shows the exact number of shares.
 

Loan Payment [L]

When you press [L], the program will guide you through the following transaction:

Enter the amount of your loan payment?
e.g. 2000 for $2,000.00

Please confirm this transaction for quarter 2, 1997
Pay $2,000 on loan.
Is this correct? (Y N)

Note: Sometimes when a loan is repaid, it is not cleared in the main program until you exit the program. If you paid down a loan and then attempt in a following transaction, to buy stock using your full line of credit, you might be rejected. In that case, you will need to exit your account. At that time your credit line is reviewed and restated. When you sign back on, your credit line should be correct.

Some investors attempt to spend every penny and push the limits on share volume per transaction and as well as credit limits.

Remember that you must have enough money and/or credit for each order placed to cover both the share value and the commission on the order.
 

Exit the Program [E]

Typing "E" will give you the following options:

[D] display report on your screen.
[P] print a copy of your report.
[E] exit now.

Which option? (D P or E)