interactive.wsj.com
April 5, 2001
With Wall Street's Decline,
Stock Chat Isn't the Same
By PETER EDMONSTON
WSJ.COM
Susan Anstead Leiby checks her favorite investment-discussion boards
several times a day. But Ms. Leiby, 33 years old, isn't trolling for hot stock
picks.
"I go there for educational reasons," says Ms.
Leiby, a database administrator in
Alexandria, Va. "Not to see what a particular
stock is going to do today."
These days, Ms. Leiby is more interested in broad advice on how best to
merge her financial affairs with those of her new husband. And she isn't
alone in shunning discussions that are largely about hot stocks.
After a bruising slide in the stock market the past year, investors are
increasingly turning to Internet message boards simply to seek general
financial counseling, economic insight or even for some emotional support.
As a result, the culture of the online
stock-discussion community has taken a
dramatic turn away from the fizzy hype of its
early days. It's becoming a quieter, less
exhilarating -- but some would say, nicer --
place.
A year ago, when the Nasdaq Composite Index and the Dow Jones
Industrial Average were at their peaks, the scene was different. The hottest
sites were ones like Raging Bull and Silicon Investor, crammed with people
looking for tips on the next high-flying Internet stock or swapping investing
ideas and sharing tales of triple-digit portfolio gains.
Well, amid Wall Street's downturn, Raging Bull (www.ragingbull.com) has
become as docile as a bear market. And how about Silicon Investor? Well,
its stature on the investing-discussion scene on the Web has crashed --
almost like a once-speeding Internet stock.
Monthly traffic at Raging Bull (www.ragingbull.com), recently sold by
CMGI Inc. to Spanish Web-services company Terra Lycos, fell to 135,000
unique visitors in February from 626,000 a year earlier, according to Internet
tracker Jupiter Media Metrix. Silicon Investor, which is owned by Infospace
Inc. of Bellevue, Wash., saw its traffic plummet to fewer than 80,000 unique
visitors in February from 332,000 in the same month a year ago.
Underscoring the cultural shift by investors away from talk of tomorrow's
hot stocks to more sobering discussions that emphasize the long term, is the
rise of Motley Fool Inc. (www.fool.com), a media company in Alexandria,
Va. It has long championed a hype-free, steady approach to investing.
Motley Fool, whose emphasis on polite discourse and investing for the long
haul seemed out of step in more-exuberant times when stocks moved at
warp speeds, has seen traffic at its message boards balloon over the last 12
months, even as Raging Bull, Silicon Investor and others have lost steam.
Messages at Motley Fool boards hit a record high of about 238,000 in
January, according to a company spokesman. Meanwhile, traffic at Motley
Fool's Web site, which also provides a broad array of financial information,
rose to 2.4 million unique visitors in February, up from 1.8 million a year
earlier, according to Jupiter Media Metrix.
"Unlike some other folks in this space, we resisted positioning our community
around stock tips," says Erik Rydholm, co-founder and chief operating
officer of Motley Fool. "For us, it's always been about support and learning."
Still, Motley Fool hasn't been immune to the financial woes plaguing
advertising-driven Web sites. Last month, the closely held firm laid off 115
employees, or about one-third of its work force, and shut down
Soapbox.com, a site where amateur investors sold homegrown stock
research.
The Fool began as a newsletter in 1993 and has since expanded into books,
radio and public television. Besides message boards, the Fool's site offers
articles and online "seminars" to teach users about investing and personal
finance. This educational slant, plus the Motley Fool's light-hearted approach,
are what attracted Ms. Leiby to the site, she says. "It's good for a beginner
like me," she says.
Ms. Leiby, for one, enjoys visiting "Couples & Cash," a Motley Fool board
devoted to discussions on how partners could most-effectively merge and
manage their finances over the long run. She is among a new breed of
individuals -- more sober investors who are averse to risk or chasing after
the next hot stock -- that are now populating financial discussion sites.
The evolution isn't only being championed by people such as Ms. Leiby, who
she says she is new to the financial chat scene. Others who were part of the
old breed also have become more restrained amid the stock-market slide that
has decimated many people's portfolios.
"It's a lot more fun to talk about stocks when you're up 70, 80, 90 percent,"
says Rob McCarty, a 27-year-old in Grand Rapids, Mich., who has been
visiting the boards at Raging Bull and Silicon Investor for more than three
years. When the market was near its peak, Mr. McCarty says he could
easily have been posting 20 messages each day. But recently, "two posts a
day is a lot," Mr. McCarty says.
Some message-board fans say they are noticing big changes in the temper of
the discussions.
"The level of assertiveness has gone down," says Osvaldo Coelho, 48, a
member of Silicon Investor, writing via e-mail from Prague in the Czech
Republic. "The level of arrogance went south too."
Bob Zumbrunnen, who worked until recently as a message-board monitor
for Silicon Investor until Infospace fired him amid companywide cuts,
agrees. "There really is a lot more civility out there," he says. "And of
course, it's a lot quieter."
As for Mr. Coelho, he says he used to limit himself to boards devoted to
telecommunications stocks, but recently began seeking discussions about
broader economic trends as well. One of his new favorite boards carries this
distinctly bearish title: "The Coming Financial Collapse of 2001."
Others, such as Kathy Knight-McConnell, a 50-year-old former
music-industry executive from New York City, are avoiding their
once-favorite haunts altogether. Ms. Knight-McConnell says she stopped
posting at Raging Bull last September after becoming frustrated at what she
describes as the "hundreds and hundreds of meaningless messages" on that
site. Instead, Ms. Knight-McConnell created her own research-driven Web
site, Investor to Investor (www.investortoinvestor.com), where members
can trade information about a handful of technology stocks.
Other breakaway stock-discussion sites are popping up as well.
TheLion.com (www.thelion.com) was founded early last year by Sam Ko,
who built up a loyal following while picking stocks under the name
"Lion_Master88" on Yahoo! Inc.'s Yahoo Finance discussion boards. Mr.
Ko says his site caters to more-sophisticated traders, many of whom have
recently been discussing techniques for profiting in a falling market.
Jim Peters, a 46-year-old programmer and a message-board poster who
followed Mr. Ko to his new site, says some investors are still dwelling in the
tech-boom nostalgia. "At Raging Bull, I see a lot of wistful investors
reminiscing about the old days."
But the boards that had thrived along with the stock market downplay the
effects of the stock market's slide on their business.
Raging Bull spokeswoman Stacy Finkel says her Web site's message boards
are just as active as a year ago. What has changed, she says, is that Raging
Bull members are "discussing longer-term investing, as opposed to next big
thing."
Steven Stratz, a spokesman for InfoSpace, concedes that the volume of
posts at Silicon Investor has dropped since the high-flying days of 1999 and
early 2000. But he argues this dramatic rise, and the subsequent fall, obscure
Silicon Investor's long-term success. "If you remove that spike, we've
actually grown," Mr. Stratz says.
Write to Peter Edmonston at peter.edmonston@wsj.com
KJC |
