A Forum Chats Up the Markets

By Susan L. Barreto
Senior Financial Correspondent
Friday, March 24, 2006

LOCUST VALLEY, N.Y. (HedgeWorld.com) - Stock chat rooms can often become a crowded place when it comes to picking up investment ideas. One firm is trying to bring the best of online chat to hedge fund managers' desktops through a subscriber-based site called ValueForum.com. Under strict terms of use, chat room addicts can access and rate the usefulness of information from postings without the worry of interlopers pumping up stocks, using multiple aliases or sending spam.

Among the 1,300 subscribers to ValueForum, a number are hedge fund managers focused on value equity, according to Adam Menzel, a founder of the web venture. The ValueForum site began after a hedge fund user of another one of Mr. Menzel's initial chat rooms suggested a site dedicated to value and income investors.

Since the site's launch in 2003, its renewal rate has been 90%, with most users logging at least once a day to check out the discussion boards organized by topic. While Mr. Menzel's company charges subscribers, US$150 per year, the chat room concept is not exactly a profitable venture.

Mr. Menzel also is the chief operating officer of Ticker Technologies, a firm he and his business partner Ben Nobel began in 1998 to offer financial info to corporate web sites. The chat room ventures started out as a hobby with a site dedicated to investors in mutual savings banks and has grown to five sites in all: my.valueforum.com (customizable version of the original site); bdcs.valueforum.com (chat on business development companies); energy.valueforum.com (a discussion forum for energy investors); REITS.valueforum.com (real estate investment trust chat room) and TA.valueforum.com (dedicated to technical analysis).

The goal is to create high-quality content in a format that investors can easily use to glean meaningful market insight. Besides the main chat room page, there is a group polling section and a coffee shop chat area for discussion of non-investment related topics. Posts also are rated by readers to show whether or not they were helpful.

Mr. Menzel said some users have gained notoriety in other financial chat rooms such as Yahoo and use the same name on ValueForum. The site has had its own notables, though, ranked by their stock rating performance in quarterly and annual performance contests.

Also adding to the community feel is a group calendar that lists market and finance events submitted by subscribers. So far the site's growth has been through word of mouth, and the average reader is 55 or older. Mr. Menzel said many of the users are retired or semi-retired professionals who have had careers across several industries and are able to bring a unique prospective to the markets.

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