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AUGUST 11 , 2000 VOL. 26 NO. 31 | SEARCH ASIAWEEK Caveat Poster Chatrooms can be helpful sources for stock tips, but they can also be gigantic rumor mills leading the unwary astray By ASSIF SHAMEEN Ten years ago, before the Internet became part of the vernacular, there were electronic bulletin boards that anyone with an acoustic coupler (forerunners of today's modems) could access. What struck me then about those crude public forums was the genuineness of the users. Almost everyone was a geek or aspired to geekhood, so the primary discussion topic was computers. Once in a while someone would post something about the wild swings on Wall Street and most visitors in the chatroom would ignore him as if he had a contagious disease. That was before Nasdaq became hip and investment bankers discovered the nerds could be milked for billions of dollars. Now the Internet bristles with thousands of financial chatrooms where hundreds of thousands of small investors swap stock tips, rumors, investment advice and insults. And a lot of that trustworthy sincerity, that "insider" ambience, that marked the early boards is gone. Today, you have no clue if that anonymous chatter who just trashed your pet company has real knowledge or if he is a short-seller sowing doubt to stampede the novices into dumping their shares. I don't spend much time on financial chat sites anymore. I consider them to be of dubious veracity and therefore of limited utility. They are more of an amusement than a primary source of information. Still, one of my favorite financial websites is clearstation.com. Along with news and investor tools, clearstation has an active forum. Whenever I log in to check the price of my sinking Nokia shares, clearstation.com alerts me to all the new postings on the company since I last visited. With one click, I can make a stock trade through E*Trade, which owns the site. While waiting for clearstation to expand its coverage to Asia, I have lately been cruising some of the Southeast Asian financial chat sites. Singapore has several of them. The granddaddy is the Market Talk forum at POEMS (Phillips Online Electronic Mart System), the Internet platform of Singapore's Phillips Securities. Another is shareinvestor.com. U.S.-based stockhouse.com is testing its Singapore service and expanding throughout the region. Several other U.S. portals are preparing to launch their own Asian financial chatrooms because they draw and keep traffic. But due to the unmoderated nature of the information being posted — it's difficult to hold anonymous posters accountable for the things they say — running chatrooms can be risky business. Recently, Singapore-based Aussino.com, an online retailer of lifestyle goods and lingerie, engaged in a very public spat with shareinvestor.com and one of its members, who alleged in a chatroom that two Aussino directors had received 250,000 free shares in the company. The Aussino chief executive denied the allegation and demanded an apology from shareinvestor.com, as well as the suspension of all discussions about the company on the site. Shareinvestor says its members have the right to express their opinion about any stock listed on any bourse, but they complied by removing Aussino. The e-tailer is threatening to sue anyway. Not that chatrooms are dangerous and sinister places. Most of the sites I've visited seem to be populated by a handful of regulars, mostly middle-aged men who appear to be retired or semi-retired. With money in the bank and time on their hands, they are active retail traders and have plenty of energy to get each other riled up about the prospects of one stock or another. With online monikers such as Thinker, Warrior, Caution and Soros2, you know you are in good company, and many exchange messages like old friends. Everyone is a self-professed expert and each thinks that he knows more about the stock in question than everyone else. Occasionally, however, some of the posters appear to be less than candid. I sometimes get the feeling that participants are being goaded into prolonging discussions (perhaps to increase the site's hits?). Often, there's a little too much cheerleading and not enough legitimate information being exchanged. That's a sign that you should move your cursor elsewhere. "You stay on a discussion site when you are convinced the participants are genuine and are not touting their own stocks or have some other hidden agenda," says veteran journalist Seah Chiang Nee, who spends several hours a day trolling chatrooms for investment tips. The chance of less-than-sincere posters is significant enough that stockhouse.com recently issued an Investor Awareness Report to help identify chatroom scammers. The dotcom suggests users be wary of individuals who excessively post messages on a single stock, who use multiple identities or repeatedly attack other chatroom members. More warning signs, according to stockhouse: watch out for those who nearly always are the first to respond to company developments or who continuously hint at having inside information on upcoming corporate developments or unreleased news. And beware the poster who goes out of his way to find bad news about a company and makes a major case out of it. Remember the words of Gordon Gekko, the fictional corporate raider of the movie Wall Street: "Information, my friend, is the most valuable commodity in the world. Now tell me something I don't know." To that, I add: Make sure it's the truth. Write to Asiaweek at mail@web.asiaweek.com
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