Some Abandon the Water Cooler for Stock Day Trading on the Internet
By ROBERT D. HERSHEY Jr.
n Florida, a young dentist tracks stocks between patients, sometimes
even between an X-ray and a filling. In Washington State, a
freight-company manager logs on to a financial Web site for four to six
hours of his workday. A designer at a California architectural firm gets so
absorbed in the market that his productivity falls 25 percent.
The long bull market and cascading advances in technology have
combined to drive capitalism's main numbers game into the heart of the
American workplace, with millions of wage earners, managers and
entrepreneurs obsessing about Wall Street. Their obsession, in fact, far
eclipses the speculative 1920's, when elevator operators and bootblacks
were a chief source of what passed for information.
"Two years ago I would have never thought I'd
be into doing this," said the dentist, Norma
Victores, 30, of Hialeah, Fla., who follows the
market on the Internet and has bought part of
her portfolio of 21 stocks and mutual funds on
line. "I used to think it was just for the
big-timers."
While much of the early concern about workday
Internet abuse focused on pornography, the lure
of the stock market has overtaken it, some
specialists said. The Internet is making a lot of
information available to small investors that was
once accessible only to professionals.
"That's where employees are really wasting their
time," said Jonathan Penn, an analyst at Giga
Information Group, a firm that advises
companies on information technology. "I'd
definitely put that first," he added, ahead of
sports, personal E-mail, chat rooms and
pornography.
The flick-of-the-finger ease with which office
workers and others can research, monitor and
trade stocks -- often able to return instantly to
their assigned tasks -- is a growing concern for employers.
Most of the people willing to discuss the issue were self-employed or
worked for small companies where Internet abuses could be dealt with
amicably. Larger corporations, while acknowledging the potential for
abuse, generally denied that employees were using company time to
trade stocks. Some devotees in the workplace said the activity could be
addictive, but most simply found it a practical method for earning extra
income.
So far, the Government has not been able to measure any economic
effect. Michael Harper, the acting associate commissioner for
productivity and technology at the Bureau of Labor Statistics, suggested
that the time spent by workers on the stock market was not unlike
water-cooler discussion of football or movies and might even be a partial
substitute for it.
"We don't know whether they would be working or doing something
else" if there was less absorption in the market, Harper said.
But according to Media Metrix Inc., a New York company that meters
Internet use much the way Nielsen Media Research does television, 22.8
million Americans used Web sites on company time in March. Some 8.2
million people visited Yahoo Finance, CBS Marketwatch, Schwab,
E*Trade and other financial sites at work, up from 6 million just three
months earlier, the company said.
About 25 percent of all corporate Internet traffic, much of it surreptitious,
is considered unrelated to work.
The stock market "is becoming a huge distraction," said Victor
Woodward, a vice president at Content Technologies, which develops
programs to help companies create and enforce policies for Internet use.
He said corporate demand for help in curbing stock-related Web use
had quadrupled in the last year. And companies face growing
competition for the attention of their employees: Internet gateways like
Yahoo, Go and Excite, eager to attract advertisers, use their home pages
to tempt Web browsers to check stock quotes.
On-line trades account for as much as 30 percent of all buying and selling
by individual investors, surveys show.
"I can't imagine that this is not a problem in the workplace," said Jill
Munden, who oversees Silicon Investor Inc., the biggest financial
discussion forum. She said 50 percent of Silicon Investor site visits,
which averaged 20 minutes each, came during regular working hours and
that "you have to believe most people don't divulge trades and research
to their boss or co-workers."
The Web site for Charles Schwab, the broker accounting for more than a
quarter of Internet transactions, now averages 33 million visits a day, up
from 24 million in the fourth quarter of 1998, according to Daniel
Hubbard, a spokesman. And actual transactions, which take only a
couple of minutes, are outnumbered 26 to 1 by typically longer sessions
for researching companies or mutual funds or to review portfolios.
Schwab's busiest periods, Hubbard found, coincide with the opening and
closing hours of the New York Stock Exchange -- from 9:30 to 11:30
A.M. and 3:30 to 4 P.M., which falls during the workday for most
people on the East Coast.
Take the case of Dean Hatfield, 36, the designer, for whom earning
between $5,000 and $15,000 a month from on-line trading for much of
last year began to threaten his day job.
"Instead of billing, say, 37 hours during the week, as I should have, I was
billing perhaps 28," said Hatfield, who works at KRJ Design in
Burlingame, Calif. "It became an issue because the revenue just wasn't
coming in." Hatfield's superiors took away his Internet access, so now if
he wants to go on line he must walk to another terminal, his activities
easily visible. He likens it to "getting your hands caught in the cookie jar."
Now, he says, "I do it on the phone or from home -- but it's not day
trading anymore."
At American Fast Freight, a company in Kent, Wash., that bundles
shipments into bigger units and then arranges for overseas transport, the
official in charge of computers, Jeff LePage, is still struggling to find a
way to "put the kibosh" on a manager who is routinely logged onto a
financial site for most of the day.
"I hadn't really focused on this until it
became chronic," said LePage, who
has noticed a gradual decline in the
unit's performance for which he
blames the employee, a peer he is
reluctant to confront.
LePage has switched off the
employee's financial site, but the
employee appears to be logging on to other people's computers. "The
battle goes on," LePage said.
Then there is John Alexandrou, a 43-year-old salesman in Foster City,
Calif., who said that for the last three years he has spent 30 minutes to an
hour of working time a day on the market. "The adrenaline of trading
options, that's got me completely hooked," Alexandrou said, adding that
the fraternity of on-the-job market devotees is very large, especially in
Silicon Valley. "You're not going to find very many people in this Valley
who are not distracted by the stock market," he said. He insisted,
however, that despite his on-the-job trading, he never failed to make his
business quotas.
On-the-job Internet stock activity has been a particularly visible problem
in the high-technology community on the West Coast, where much of
employees' pay is in stock options and it is common for even those of
low rank to have an equity stake.
None of this necessarily means that investors pay less attention to their
jobs. Ross Brown, vice president of MSI Consulting, a Seattle-based
management and marketing adviser to high-technology companies, says
he often spends less time tending to his portfolio -- worth in the mid-six
figures -- than when he used to phone orders to a broker, a process he
said can mean "you've chewed up an hour of your day."
Still, the market is seen as an increasingly serious time eater by many
employers, who have only recently begun to monitor Internet activity in
earnest. A survey by the Society for Human Resource Management in
Alexandria, Va., found 76 percent of members not bothering to monitor
activity as recently as 1997.
Moreover, employees seem to have little trouble avoiding detection from
casual observation.
"One second I was in E*Trade," said Hatfield, the California designer,
who for a time was making more money trading than in salary. "And the
next second I was doing design in Autocad," a tool of his trade.
"I could hide the day trading quite easily," he said.
|
