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From: ckbrandt@netcom.com (Charles K. Brandt)
Subject: FREE NEURALNET INVESTMENT NEWSLETTER
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THE ANALYTIX HIS NEWSLETTER FOR JANUARY 1995

The HIS Newsletter is a new investor's newsletter for growth-minded, but 
cautious investors.  It uses proprietary Hybrid Investment Software (HIS), 
called the Predictive Sorter(TM), to select recommended investment portfolios.
It is a newsletter for growth-minded, but cautious investors.  

In December, 1994, the HIS Newsletter evolved from the previously 
pubished Hedger's Newsletter.  This January 1995 issue is being posted so 
that interested parties can request future issues be emailed to them.  
Although it is currently being distributed to for no charge, at some time in 
the future, a subscription fee will be charged.  Anyone interested in 
receiving a free copy of the Newsletter should send an email request to 
ckb@crl.com.



**********REPRINT OF DECEMBER 1994 NEWSLETTER***********

WHAT IS THE PREDICTIVE SORTER?

The Predictive Sorter is a proprietary software program that includes Neural 
Nets for defining and analyzing trends, Fuzzy Logic for drawing conclusions 
from imprecise data, case-based reasoning for considering general market 
conditions, and resolving potentially conflicting conclusions.  It determines 
relationships between over 100 attributes per stock (e.g., sales, 
profits, previous stock price, trading volume, etc.) for more than 5000 
stocks and selects portfolios of stocks to be purchased and held for 
specified investment periods (month, quarter or year).  Stocks are then 
sorted based on predictions of their percentage increase in value.  Each 
portfolio includes index put options as insurance (a hedge) against 
market downturns. 

The Predictive Sorter is adaptive.  That is, it "learns" from historical 
information about individual stocks and the market in general.  Training 
periods consist of the most recent 12 months.  Each month, data from the 
oldest month is discarded and the newest month's data is included.  

In 1993, we began training the Predictive Sorter using historical stock 
market information from 1985 and developing a theoretical portfolio.  The 
results of that theoretical trading are provided in the historical 
section at the end of this Newsletter.  Actual trading began in September 
of 1993.  Specific algorithms used in the Predictive Sorter are 
constantly being improved through genetic programming "survival-of-
the-fittest."

In December of 1994, we completed our first 12 months of actual 
trading.   As you may know, this was not a great year for the stock market. 
The Standard & Poor's 100 (OEX) closed down by .80%.  By contrast, the HIS 
Newsletter portfolio closed the year up 4.04%, including not including 
the additional 4% we spent on insurance in the form of index puts.  Our 
actual stock picks were up over 9% for the twelve month period.

NOTE 1:  Trading quarters begin on the first trading day of December, 
March, June, and September.  Performance results include the cost of 
buying and selling stocks.  For tax reasons, December begins our trading 
year.




NEW FORMAT

This month our HIS Newsletter embarks on a monthly publishing schedule 
with a new format suggested by its subscribers.  Previously, the 
newsletter was only published quarterly.  Although this December 
newsletter has a bit more explanation than usual, we have NOT abandoned 
our motto of RletUs make money, not dialogue!



INVESTMENT STRATEGY:

For our 1995 portfolio, we plan to invest 33.3% in short term federal 
bonds and notes (for safety), 16.7% in our HIS Income Portfolio (held for 
12 months from December), and 50% in our HIS Growth Portfolio (held for 
three months and protected with index option puts).  The 50% held in our 
HIS Growth Portfolio rotates each month.  In other words, we actually 
invest 16.6% in month one, 16.7% in month two and 16.7% in month three.  
In month four, we sell the portfolio from month one and reinvest its 
proceeds in that months portfolio, etc.  For the purposes of tracking our 
investments, we will assume a fictitious account of $1,000,000 which we 
distribute as follows:  $333,334 in short term federal bonds and notes;  
$166,666 in our HIS Income Portfolio;  and $500,000 in our HIS Growth 
Portfolio.

Note 2:  If you do not wish to trade growth stocks on a monthly or 
quarterly basis, you may purchase and hold only the income stocks or you 
may purchase all or only some of the growth stocks once a quarter.  
However, we do not expect these strategies to produce the same results as 
our balanced portfolio.




HIS INCOME PORTFOLIO FOR 1995

Buy and hold these stocks for twelve months (December 1994-December 1995)


Name 		Sym	# of	Price		Cost		Price	Value
			Shrs 	12/94				12/95
					
Woolworth	Z	2400	14.250	$34,225	
Chevron		CHV	800	42.750	$34,225	
East. Kodak	EK	700	46.500	$32,575	
Minn. Mng	MMM	600	51.750	$31,075	
DuPont		DD	600	54.500	$32,725	

TOTALS (5 stocks):			$164,825




HIS GROWTH PORTFOLOIO FOR DECEMBER 1994 (Q1 1995):

Buy and hold these stocks for three months (December, January, February)

Name 		Sym	# of	Price	Cost		Price	Value
			Shrs 	12/94			3/95	

Rotech Med	ROTC	700	28.500 	19,975		
Lyondell PetrochLYO	700	24.875	$17,438		
Dell Computer	DELL 	400	41.125	$16,475		
Bush Wellman	BW	1200	15.375	$18,475		
Hughes Air Sply	HUG	1000	17.875 	$17,900		
BET PLR (ADR) 	BEP	2900	6.375 	$18,517		
SUN Micro	SUNW	500	32.875	$16,463		
Cordis Corp.	CORD	300	59.750 	$17,950		
Windmere Corp.	WND	1900	9.750	$18,550		
OEX Mar 400 Put OEX.OT	4 	6.250	$2,520		

TOTALS (9 stocks)			$164,262



	

DISCLAIMER:  All advice is provided for personal purposes.  Investment 
management on behalf of others is expressly prohibited.  Past performance 
is not a guarantee of future results.  This information was compiled from 
sources believed to be reliable, but its accuracy cannot be guaranteed.  
Analytix is not affiliated with any of the companies recommended.  
Analytix and its employees and associates will, at times, have positions 
in companies mentioned in the letter.





PERFORMANCE OF HIS PORTFOLIO VS. S&P 100 INDEX:

				1 Year	3 Year	5 Year

HIS Performance			4.04%	110.35%	217.39%
OEX Performance			-0.80%	20.56%	30.31%

Note 3:  The 3 Year and 5 Year performance figures are theoretical 
back-trades that resulted during the training periods of the Predictive 
Sorter.





QUARTERLY PERFORMANCE FOR Q4 OF 1994:

Here are the results of our stock picks for September.  With the poor 
market performance for the quarter, our portfolio showed a relatively 
minor loss of only 1.94% compared to the OEX loss of 2.31%. Annual 
performance is better.  For the year ended December 1, 1994 (our 
first actual trading year), we show a compounded gain of 4.04% compared 
to a loss of 0.80% for the OEX.

Name 		Sym	# of	Price	Cost	Price	Value
				Shrs 	9/94		12/94

CDI Corp.	CDI	3800	12.125	$50,388 17.875	$67,887
VLSI Technology	VLSI	4000	13.625	$49,040	11.875	$47,460
Tandem Comp.	TDM	3200	15.000	$45,632	17.000	$54,368
Bell Industries	BI	2600	17.000	$48,126	21.500	$55,874
Raymond Corp.	RAYM	2400	18.750	$49,825	17.750	$42,575
ABM Industries	ABM	2200	11.000	$49,800	21.000	$46,175
Allwaste Inc.	ALW	7400	6.250 	$49,099	6.000 	$44,326
Ampco Pitts	AP	6400	7.875 	$52,864	6.875 	$43,936
AZTAR Corp.	AZR	7200	10.250	$48,672	6.000 	$43,128
DIME Bancorp	DME	5400	9.500 	$50,679	7.875 	$42,471
OEX Dec 400 Put	OEX.XB	1200	3.750 	$5,141	1.188 	$1,384

TOTALS :				$499,266	$489,584

HIS Profit (Loss):	($9,682)	HIS Performance (% Gain (Loss):  (1.94%)
					OEX Performance (% Gain (Loss):  (2.31%)









NEWSLETTER PERFORMANCE HISTORY

The quarterly performance history of the HIS growth portfolio over the 
training period, 1986 through 1993, and the actual trading period, 
December 1993-September 1994, is as follows:

Trading		OEX	HIS	Trading		OEX	HIS
Quarter		Profit 	Profit	Quarter		Profit	Profit 

Mar 1,1986	9.60%	21.99%	Sep 1,1990	.84%	-4.86%
Jun 1,1986	0.31%	6.07%	Dec 1,1990	13.61%	39.13%
Sep 1,1986	0.70%	-0.97%	Mar 1,1991	2.32%	0.21%
Dec 1,1986	17.78%	25.43%	Jun 1,1991	2.23%	8.17%
Mar 1,1987	2.79%	5.70%	Sep 1,1991	-3.67%	0.05%
Jun 1,1987	8.57%	21.63%	Dec 1,1991	6.74%	24.24%
Sep 1,1987	-30.60%	-2.09%	Mar 1,1992	3.16%	4.25%
Dec 1,1987	16.99%	27.10%	Jun 1,1992	-1.02%	-10.56%
Mar 1,1988	-0.40%	1.16%	Sep 1,1992	1.89%	4.83%
Jun 1,1988	-0.72%	9.07%	Dec 1,1992	4.92%	26.33%
Sep 1,1988	2.64%	12.69%	Mar 1,1993	1.30%	9.29%
Dec 1,1988	7.06%	15.33%	Jun 1,199	32.39%	0.31%
Mar 1,1989	9.86%	18.16%	Sep 1,1993	0.57%	20.21%
Jun 1,1989	8.66%	10.18%	Dec 1,1993	1.17%	8.31%*
Sep 1,1989	-0.58%	-4.86%	Mar 1,1994	-1.25%	-8.19%*
Dec 1,1989	-3.66%	-5.07%	Jun 1,1994	1.64%	6.70%*
Mar 1,1990	9.25%	12.10%	Sep 1,1994	-2.31%	-1.94%*
Jun 1,1990	-11.04%	-1.22%				
				Average		2.34%	8.51%
				Compounded	99%	1335%

The HIS Portfolio averaged approximately 5% per quarter better than the 
S&P 100 Index.  Compounded over the last nine years, the difference is 
more than an order of magnitude!  One hundred dollars invested in the S&P 
Index in 1986 would be worth $199 in December 1994.  However, that same 
$100 invested in the HIS Portfolio would now be worth $1435.

Note:  Performance shown for Dec 1, 1993 through Sep 1, 1994 are actual 
trades which were published in advance by the HIS Newsletter (previously 
called The Hedger's Newsletter) beginning in December, 1993.

********************************END DECEMBER NEWSLETTER******************





GROWTH PORTFOLIO FOR JANUARY 1995:

Buy and hold these stocks for three months (January, February, March)

Name 		Sym	# of	Price	Cost		Price	Value
			Shrs 	01/95			04/95

Newport Corp	NEWP	2400	7.750	$18,625		
Windmere Corp.	WND	2400	7.875	$18,925		
Nova Corp.	NVA	2000	9.375	$18,775		
Bush Wellman	BW	1000	17.500	$17,525		
VLSI Tech	VLSI	1500	12.125	$18,213		
Graphic Ind.	GRPH	1800	10.125	$18,250		
Allwaste Inc.	ALW	3200	5.625	$18,032		
QMS Inc.	AQM	2200	8.500	$18,725		
Armco Inc.	AS	2700	6.625	$17,915		
OEX Apr 400 Put OEX.PB	4 	5.875	$2,370		

TOTALS (9 stocks)			$167,354	

Note:  There will be no quarterly results published in January or 
February because of the change to a monthly format.  We will publish the 
first quarters results beginning in March.

Please send me your comments and requests to receive the newsletter.

Ken Brandt  ckbrandt@netcom.com
Analytix Inc., 3182 Campus Drive, #361, San Mateo, CA 94403
Voice:  415/341-3651








