|★ APPLICATIONS ★ BUREAUTIQUE ★ MARKET MERLIN|800Plus) ★|
|Market Merlin||Applications Bureautique|
Merlin is a totally different program which is geared to meet the needs of the active investor. It is unique amongst PCW investment analysis software in making definite recommendations as to which shares to buy. This advice does not extend as far as telling you when to sell so you will have to make your own judgement on when to take a profit or limit a loss and also on the shares to watch in the first place.
Merlin runs on the 8256/8512 or 9512 (specify which) and needs no installation. The program runs from a main menu giving access to nine sub menus all of which are easy to follow. Apart from entering or editing data no demands are placed on the user. The manual supplied with the review copy was marred by poor layout and numerous spelling mistakes but Burncastle say a new version is in course of production. Newcomers to share ownership will appreciate the Stock Exchange guide to buying and selling shares which is also included.
The manual's main interest lies in the explanation of how the buy recommendations are arrived at The basis is an analysis of point and figure graphs which are a common form of technical analysis though less widely used than moving averages. Point and figure graphs chart movements of share prices in such a way that an X indicates a rising price and an O a falling one. Unchanged prices do not register. The Point is a unit of movement whose size varies in relation to the price of a share. Cheap shares have points of 1p or 2p whereas more highly priced ones have points of 5p or even 10p You choose the size of the point but Merlin always assumes that a reversal only takes place when the price has moved 3 points.
If share dealing was so simple you would hardly need a computer to help, but there are other factors affecting prices and sentiment which Merlin takes into account. For optimum results you need to keep in touch with the share market by reading press comment, watching for possible bid situations and finding out what your broker thinks of the market and the shares you are interested in. Cover, yield, P/E ratios and the date of the company's results must also be entered. Subjective comments are entered on a scale from -2 to +2.
The program also applies its own weighting factors as it looks for undervalued shares. These come in the form of ten ratings which assess the facts from different angles and are taken into account as the program works out its recommendations. The manual does not explain exactly how these ratings are arrived at, other than to say the approach is cautious. Before investing any money it would be wise to have some practice runs to build confidence in the system.
Fifty shares is a reasonable number to keep track of (there is theoretically no limit) and every time the data is updated Merlin will review its recommended list of buy shares. A short list itemises ail the potentially interesting shares and there is a full recommendation for selected stocks. This includes a summary of all the factual and subjective data together with a section of text explaining the reasons for the recommendation.
Finally a chart shows the range of prices over which purchase is recommended depending on the stockbroker's assessment of overall market sentiment. The old adage that there is no profit until it is taken always applies and you will need a rise of around 10% just to cover dealing costs.