Messages: What Members Are Asking On-Line
by CI Staff
In this article
- BeeSoft Still Buzzing Away
- Comments on Technical Analysis Comparison
- Determining the Basis of a Stock Spin-Off
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BeeSoft Still Buzzing Away
In the March/April issue of CI, we reported that BeeSoft, the maker of the ProTA and ProTA Gold technical analysis programs, had apparently gone out of business. The following is part of an E-mail we received from the president of BeeSoft, Jeff Bizon, after we had gone to press:
I just wanted to let you know that BeeSoft (ProTA) is actually still in business and stronger than ever. I presume we were left out of your software article due to our domain expiring in February. Normally that wouldnt be a big issue, but Ive had beesoft.net for over 10 years and all of the contact info with my registrar (Network Solutions) was out of date. It took just about two weeks to prove I was the original owner and to get the domain back. And so, while in that panic mode, the AAII review slipped my mind and I neglected to contact you about the problem.
CI Editor Responds: Thanks for the update, Jeff. Our readers can look forward to a review of these programs in the July/August issue. They can also visit the BeeSoft Web site for information on ProTA and ProTA Gold: www.beesoft.net.
Comments on Technical Analysis Comparison
The March/April 2008 comparison article on technical analysis and charting programs spawned a few reader comments and questions:
Im researching technical analysis and charting programs and noticed that you included VectorVest in the March/April 2004 comparison but not in the one in March/April 2008. What was the reason for this?
CI Editor Responds: For the 2008 comparison, we decided to focus on the pure technical analysis and charting programs. While VectorVest is a popular program among CI readers, it is more of a niche product: Its primary focus is its proprietary trading vectors, while it offers basic charting as an add-on.
Going forward, for all comparisons we are going to focus on quality over quantity so we can offer more details on individual services and more screen shots.
I am a long-term user of TeleChart. When I read your review in the latest CI, I was rather amazed by this statement: If you wish to go beyond the provided indicators, you can program your own. Unfortunately, there is no wizard to walk you through the process and the programs help system provides no useful information on the topic. However, the training CDs that come with the program show you how, so be sure to keep them as a reference.
The TeleChart custom indicators are indeed rather powerful, but confusing in their use. I wrote to Worden Brothers to inquire about getting copies of those CDs. They responded by saying that Wordens most up-to-date training materials are now found within the discussion forum at www.worden.com. The forum is indeed quite helpful and contains many free and useful video lessons that fill in where the help screens leave off.
CI Editor Responds: Thank you for the information!
Determining the Basis of a Stock Spin-Off
We need a formula for determining the cost basis of a stock spin-off, in this case Altrias 2007 spin-off of Kraft.
CI Editor Responds: There are a few pieces of information you need to determine the cost (tax) basis a spin-off: the number of shares of the parent company owned prior to the distribution and the distribution ratio (provided by the parent company); the closing prices of the parent and spin-off company shares the day after the distribution; and your aggregate tax basis of the parent companys shares (how much you paid for the shares, including commissions).
Assuming you owned 100 shares of Altria prior to the Kraft distribution, you would have received 69.2024 shares of Kraft based on the 0.692024 distribution ratio100 × 0.692024. You can use the closing prices of the parent and spin-off company shares on the day after the distribution as the fair market values. On April 2, 2007, Altria common shares closed at $68.22 and Kraft common shares closed at $30.85. Therefore, the fair market value of your Altria shares was $6,822 (100 shares × $68.22) and $2,134.89 for your new Kraft shares (69.2024 shares × $30.85) for a total fair market value of $8,956.89. Altrias percentage of total fair market value was then 76.16% ($6,822 ÷ $8,956.89) and Krafts was 23.84% ($2,134.89 ÷ $8,956.89).
Assuming the aggregate tax basis of your Altria shares was $8,500, you would allocate this based on each stocks proportionate fair market value. Therefore, the allocated tax basis for Altria would be $6,473.60 ($8,500 × 0.7616) and for Kraft it would be $2,026.40 ($8,500 × 0.2384).