-OFF TOPIC- Recently I asked if anyone knew of other forums for non-techs; I didn't get an answer, but came across this today in WSJ Interactive:
interactive.wsj.com
April 5, 1998
Investors Hungry for Stock Talk
Find Sites to Satisfy Every Taste
By NANCY BOYD KENNEDY
Special to THE WALL STREET JOURNAL INTERACTIVE EDITION
Hal Uy of Pittsburgh is a regular at the Shark Tank. He's been going there for a year and a half, not to socialize but to trade information about stocks.
The Shark Tank is, after all, not a trendy nightclub but an on-line investment forum on America Online.
Like Mr. Uy, millions of on-line investors are surfacing at discussion forums as well known as the Motley Fool (www.fool.com) and Silicon Investor (www.techstocks.com) or up-and-comers such as Raging Bull (www.ragingbull.com) and Daytraders (www.daytraders.org). On-line chat enthusiasts are exhilarated by the volume of information at their fingertips, and Web site operators are obliging launching bulletin boards and chat rooms to suit every taste.
"This is one of the greatest celebrations of the on-line community," says David Forrest, head of the Motley Fool's discussion forums. "You attract people from all around the world who are doing their research, and their collective knowledge is much better than what you find on Wall Street."
When he first got started participating in the Shark Tank's bulletin boards and chat rooms, Mr. Uy, who goes by the screen name Cravates, admits he got caught up in the excitement of the fast-paced patter about high flyers.
"I tried five or six times jumping in on recommendations I saw on the boards, and I lost almost every time," Mr. Uy says.
Today, as a full-time day trader, Mr. Uy still frequents the Shark Tank, but he's not as quick to dive in.
"I'd say only 10 or 20 people on the boards post good information," he says. "I listen to them to get ideas, but I do my own research. I use it more as a sounding board, to say 'Hey, this is my hypothesis. What do you think?' "
Like local pubs, each forum seems to have its own identity. Visit the Motley Fool or Yahoo Finance (quote.yahoo.com) for spirited banter about individual stocks. For mutual fund jawboning, Morningstar (www.morningstar.net) offers hundreds of boards, including one just for "Bogleheads," the popular name for diehard Vanguard Group mutual fund fans. If you want to talk technology, Silicon Investor is the place.
"Our mission was to build a site that we wanted to use," says Brad Dryer, co-founder of Silicon Investor with his brother, Jeff. "When we started, we thought we were so smart, but we're humbled now by how incredibly knowledgeable the people who use our boards are."
Mike Kreusch, a Boston accountant, visited several individual stock forums but says he didn't find his home until he found the Motley Fool's Communion of Bears bulletin board.
"The stock boards came across as support groups to me, but I find the level of discussion is reasonably high at the Communion of Bears," Mr. Kreusch says.
Yet, like many investors, Mr. Kreusch is cautious when it comes to using information he gets on the board.
"I get a taste of why someone else owns or is selling a stock, but I wouldn't use their recommendations to pick a portfolio," he says.
Nevertheless, Mr. Kreusch does say that he made some investment choices for his 401(k) plan based the posting of a board regular, a retired woman with a certified financial planner's license who talked up the oil services industry in January. "I've made a little money on that," he says.
Investors are right to be cautious. On-line chat is chockablock with people whose motives are hard to judge and whose information is often suspect.
"The downside is that people lie all the time. They'll hype the little stocks in anonymous posts and create a market," says Raging Bull founder Bill Martin. "I can't believe people fall for it, but they do, so we try to get the blatant stuff off the boards."
Gretchen Maronde of Carmel, Calif., is a regular poster on Silicon Investor's Alfacell thread, one of more than 4,000 discussion threads that make up the boards. But she owned the biotech stock for almost 10 years before Silicon Investor added a thread for the company last year, and she join in on the discussion.
"I'm not interested in investing based on what some stranger in Pennsylvania says," Ms. Maronde says. "I think the purpose of the board is to facilitate the free flow of information. It's been the lifeblood of the company's shareholder base."
While it can be hard to tell from the often gender-neutral on-line names that people adopt, the discussions seem to be dominated by men. Jennifer Rogers Barrie, head of Morningstar's on-line community, estimates its users are more than 85% male.
Rob Shenk, director of programming for AOL's personal-finance channel, believes that whether male or female, people seek out on-line forums for the same reasons.
"Investing is an ego sport," he says. "People with a vested interest are eager to spar with others who have the same interest. But there's a lot of fear involved in investing, and people also want to see what other people are saying, to seek out information that will ease their fears."
But some experts caution that anyone looking to on-line chat for solid financial information is trolling in the wrong seas.
"People resent it if you tell them they're wasting their time when they think they're in the business of beating the market," says Meir Statman, a Santa Clara University professor who specializes in behavioral finance. "But as information, what you get on-line is garbage. The real value of chat is connecting with people, spending your time in a way that is pleasurable for you."
John Hutson of Glendora, Calif., who frequents the Morningstar bulletin boards, says investing is his hobby. But, like many participants, he's not there just to see what he can gain, but what he can contribute. He earned his share of notoriety on the boards with a three-part posting detailing how he had retired early based in part on his success as an investor.
"I like to help people. I spend about an hour a day on the boards, mostly answering questions," says Mr. Hutson.
Terry Odean, a finance professor at the University of California, Davis, who has studied the trading habits of individual investors, believes that on-line discussion may actually jeopardize investment success.
"People run the risk of getting information that they perceive to be more valuable than it really is, which leads them to trade, but the information doesn't have enough value to cover the cost of trading," Prof. Odean says. "My guess would be that as a result, the average person will end up worse off than before."
But Mr. Uy, for one, isn't about ready to concede defeat.
"The market makes you humble, and I have my moments of idiocy," he says. "But we're all searching for a mentor, someone we can learn from, and I think this is the next best thing."
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