And that was ten years ago...

Came across this piece during an internet search, from 1999:

"Concern grows over influence of Internet bulletin boards on stock market dealings

It wasn't long ago that if you were a private investor and fancied a gossip about your favourite share, the only avenues available to you might be a chat in your investment club or a discreet word in a City pub.

Now there is a Nineties version of the coffee houses that proved to be the genesis of the London stock exchange in the 17th century.

They are called bulletin boards and these on-line investment discussion groups have both the industry regulators and publicly quoted companies worried."

from The Independent

Now that we're in 2009, when you look at some of the quite blatant ramping that goes on on some bulletin board sites it really isn't surprising that investing in stocks has such a bad name.

For example, earlier today on ADVFN, on one of the Blinkx bulletin board threads, ''montyhedge' (not-so-affectionately known as 'montyplank' to his un-friends) predicted that if things went well for Blinkx it would turn out to be on a PE of 1 and so due some explosive growth.

A quite blatant ramp. Does he seriously expect anyone to believe that Blinkx is going to earn 14p (around the current share price) per share any time soon (which is what it would mean for it to be on a PE of 1)? To suggest so is blatantly delusional - or fraudulent.

Of course the web sites themselves conspire in the ramping. By allowing anonymous posting they invite such fraudulent ramping activity. If they cared about it, and wanted to reduce it, it would be easy enough to achieve - just require that when a user registers to use the site they must supply details for a valid credit card. That would make it child's play to identify, ban (and, if required, prosecute) those who lie and fraudulently deceive investors about the merits of shares. But of course without some users running multiple identities to ramp stocks the site's pages impressions - and therefore advertising revenues - would be decimated... 

Of course investors should always do their own research - but with some companies, particularly small, high-tech start-ups, there isn't always a lot of research to be had.  And in any case it is a simple fact of human nature that people are easily influenced. Politicians have relied on the fact for millenia, as has the media. As so often, with the stock market people should be saved from themselves...