Investing

INVESTING

Let's Talk Stocks

by Jim Watson

Last month we discussed the fact that major brokerage houses, such as Schwab and DLJ, have opened up shop on the Internet. Other firms, such as E*Trade, have been started solely as an online trading service. Is there a reason for the brokerage industry's mad dash to the Web? Let's see…maybe it's because that's where the investors are!

It is staggering to think of the amount of money that is invested via the Internet every single day. I'm not just talking about the fraction of dollars that are traded online everyday. Better yet, I am talking about the millions of dollars that are invested today and every day through the Internet, in opportunities presented directly to the investor via a form of e-communiqué. Now we know that far too many of these opportunities stink, and a few may be ripe for potential fraud. But the fact remains that never before in the history of buying and selling public securities has there been a better source (other than your friendly neighborhood stockbroker) to get real-time information, especially on more speculative high-growth investments.

I'm discussing high-growth stocks in this column for two reasons. First, that's my business. My company publishes an Internet newsletter that focuses on small-cap and micro-cap investment opportunities. Second, I believe the Internet will have more of a long-term impact on NASDAQ and OTC growth companies than it will on the "blue chips."

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By a show of hands, how many of you out there have ever visited a chat room or posted a message on a board? I see quite a few. Now how many of you have visited a financial or investors chat room or message board? Ah, still quite a few. Obviously I'm not alone. By my very own unofficial, yet extremely official, count there are hundreds of thousands of chat rooms and message boards operating in cyberspace. Out of that number, I have found that quite a few command the topics of "Stocks" and "Investing." The reason? People in cyberspace have money. Their demographics are some of the more highly desirable in the world. Therefore, the marketing legions are following them onto the information superhighway and setting up a myriad of opportunities for them to spend or, better yet, invest all of that money.

For the most part, investment chat rooms are great. I believe that anything that opens up the lines of communication between investors or potential investors is fantastic. It's also a humorous way to kill a few minutes (or hours) of one's precious time. But from what I've seen, a lot of the information can be cold and stale, having been passed down from generation to generation in cyberspace. Nonetheless, I'm a glutton for punishment and so I visit my favorites, StockChat and Stock Club, on occasion. For me, it's kind of like going to a mall. I really don't expect to see anything interesting, but then again, you never know.

What I do find very interesting and intriguing, however, is the notion of stockchat bulletin boards within the Web sites of publicly traded companies. Although only beginning to be seen, these sites can become very specific places to discuss a particular company from a due diligence standpoint. I have also found that company management can monitor these boards so you can post questions and sometimes get immediate answers online. A company with which I am closely associated, 1st Net Technologies, specializes in helping public companies develop a high-end corporate due diligence Web site. I believe that such sites, located within the company's overall domain, will become a mainstay in the corporate exposure arena in no time.

With the continued development of the Internet, investors will win. The greatest source of power for prospective investors is information. The more the merrier, and the faster the better. When investors win, companies with a solid investment opportunity will win as well, for once investors are armed with the proper knowledge, the investment dollars will follow.

So log onto one of the many chat rooms or bulletin boards on the Internet and start talking stocks. At the very least, you might find it entertaining. The bottom line is participating in your investment decisions. Do research. Search for undervalued opportunities yourself via the Internet and other means of electronic commerce. If you do those things, in the end your investment portfolio will show the fruits of your labor.