MyStocks :: A new generation of investment Web sites has succeeded the skanky chat rooms of the 1990s. You may find some good ideas there.
A golden glow hits the white sand beach just before sunset on a May evening. In a ballroom inside the Lido Beach Resort in Sarasota, Fla., 180 investors from around the country get ready to spend three days face-to-face with people they interact with all year online. Their motto: "Let's have some fun and make some money together."
This is the fourth annual InvestFest, an in-person gathering of members from online investing community ValueForum.com, and these folks are hardly the Beardstown Ladies. Passing around a crackling wireless microphone, the investing aficionados boast of success in energy and precious metals and count their dividends from mortgage real estate investment trusts and Canadian royalty trusts. Eighteen of the group report being up 40% or more for 2006's first four months, better than the Dow, S&P 500 and Nasdaq.
Some of the more colorful members remind you more of Jimmy Buffett than Warren Buffett. "I've got tin foil inside my hat so y'all don't read my mind," jokes retired Delta Air Lines pilot and Longboat Key resident Robert Craft, 63, a ValueForum member for the past three years. Because of the ideas and research he gets at ValueForum, the sun-tanned Craft says he made up--and then some--for the loss of his pension, resulting from the airline's bankruptcy filing. Fellow site dweller Larry C. Tassinari talks of a fortune he's amassed in gold and coal.
While performance boasts have to be taken with a grain of skepticism, there's little doubt that the ValueForum site can be a valuable tool for trading investing information. The site and others like it are electronic versions of investment clubs, where members swap tips and analysis.
The genesis of these groups is a little funky. They first emerged in the late 1990s as chat rooms that were free-for-alls for CNBC-addicted day traders chasing the latest sizzling tech stock. Also prowling the chat rooms then were disreputable promoters out to pump up their newest positions. Today's incarnations are presumably more responsible because the Web sites vet the members, who may use made-up screen names but are known to site managers. The sites also track what the investors recommend with an eye out for thwarting any skulduggery.
MyStocks :: ValueForum is the brainchild of two young Long Island entrepreneurs, Adam Menzel and Benjamin Nobel. In 1998 a friend of their parents asked them to create a Web platform to help him find and communicate with other investors looking to profit from the wave of mutually owned thrifts converting into public companies. Eventually Menzel and Nobel started ValueForum.com as a broader-based alternative for individual investors interested in value and yield- oriented stocks. "Collaboration leads to better investing," says Menzel, 27.
On the Web site, which charges $220 a year, investors rate one another's message board posts and discuss specific investment topics. They also post their own stock analysis, spreadsheets and portfolios. Members can poll the rest of the community on any topic, from Intel's price trend to Ben S. Bernanke's latest pronouncement. To reduce the risk of touting by pump-and-dumpers, a member is limited to one user name, and all posts are rated by the community.
Each quarter the site holds a stock picking contest, where participants post three positions. At quarter's end the best performer gets a $250 gift certificate to Amazon.com. The current quarterly leader, Jeremy (Wheelie) Guard from West Vancouver, B.C., is up 18% since July 1 on his three positions, the most profitable of which is a short of mortgage banker Accredited Home Lenders. The site's year-to-date winner, a poster named "Alanthill," is ahead 78%, thanks mostly to mining stocks HudBay Minerals and Yamana Gold.
Today there are 1,400 ValueForum members, 1,000 of them visiting the site on a typical day, making ValueForum one of the stickiest communities on the Web. By their own accounts, this gang is rife with genius. Founder Menzel says that not quite three-quarters of his members boast returns in excess of 25% for 2005.