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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: aptus who wrote (12079)	7/15/2000 7:33:40 PM
From: Bernie Goldberg	Respond to of 18928

Hi, Be glad to answer your question. Lets assume 1000 shares of a $10 stock. Price fluctuates causing both buys and sells. Ends up at $20. You have at this point 560 shares. 560*20=11,200 A 2 for 1 split is performed giving you 1120 shares at $10 each. All of this very elementary and very simple as it occurs and there is no question about. Where the confusion occurs is when you say IBM was $10 when you worked there. That information probably came from a split adjusted chart.(Split adjusted for two 2 for 1 splits that occurred years later. If you owned any IBM shares at that time and had sold or purchased them the trade confirmation slip that you would have received at that time would have indicated a price four times greater than the 10 or so that is indicated on the chart. When a history is done with Newport as opposed to Automatic Investor or PCA, when you come to split date you change the number of shares from the pre split to the post split number and you also change the price. These changes show up in the history which can be amended with an explanation of the split. Using IBM as an example. With Bob's initial purchase at we'll say $174 let's say $20,000 he would purchase 115 shares. Using AI or PCA because of the two 2 for 1 stock splits that occurred in recent years he would be shown that he purchased 460 shares in 1990 at a price of 43.50. That's where the confusion comes in a conversation when someon says he paid XX$ for a stock and someone else looks at a split adjusted chart and sees XX$ divided by 4 or any other number for that date. In 1998 Profund OTC had a 1 for 5 reverse split followed by a 1 for 4 regular split(i'm not sure about the sequence or actual numbers. It was all very confusing at the time). For some reason none of the charting sites that I followed picked up on the splits. When you looked at a chart of UOPIX it looked like the price had fallen off a cliff when it had actually increased in value. Bernie P.S. In December of '94 I purchased 300 shares of MRK. Today I own about 800. The increase did not all come from purchases as there was a 2 for 1. AI and PCA would both accurately represent the value of the shares but they would not show the whole picture as to how I got from 300 to 800.