Stockbroking on the Internet: Navigating a web of financial knowledge

THE LONDON Stock Exchange began life more than three centuries ago in the coffee shops of the City. Traders and merchants would get together to exchange news and gossip and to do business. Towards the end of the 18th century, the brokers had established their businesses in the coffee houses near the Royal Exchange, notably Garraway's and Jonathan's.

When the latter burnt down, the brokers subscribed to the construction of New Jonathan's and from that coffee house, the London Stock Exchange traces a direct line of descent. The Internet is, in many ways, merely an electronic version of this old coffee shop, where you can exchange news and gossip as well as trade your shares.

Anyone with a passing knowledge of the history of the City in the 18th century will have heard of the South Sea Bubble and of the outrageous share-ramping schemes that ran riot at the time. One of the most celebrated was the offer of "a company for carrying on an undertaking of great advantage but nobody to know what it is". The enterprising fellow behind the scheme sold 1,000 shares in six hours and was never heard of again.

Of course, we are far more sophisticated now, aren't we? Apparently not. There are dozens of websites asking you to put a dollar in an envelope and post it to them. Then there is the story of the man who went a stage further and sent begging e-mails to people with more than a little success. There are plenty of panhandlers on the Internet. Ignore them. But there are places where you may swap gossip and ideas with like-minded investors both on and off the World Wide Web. "Internet" and "Web" are often used interchangeably, but they should not be. The Web is only a part of the Internet.

Let us look at where and how you can exchange ideas on the Web first. Several of the commercial sites such as Global Investor, Hemmington Scott, Interactive Investor, Market Eye and Motley Fool host bulletin or message boards. These are glorified notice boards on which you can stick or "post" your own electronic notice and view those put on by other people. You can also view the comments made by others about what you say and you can leave messages commenting on what is already there.

Browsing these message boards, you may find discussions on your favourite stocks as well as other investing subjects. Some of the websites allow you to view their message boards as a guest as well as a member. But only registered members may write new messages.

Once you have registered, you can customise the way you view the messages on the board. The simplest way of viewing them is "unthreaded". Put simply, this lists messages in chronological order. The more useful way of viewing messages - or "posts" - is "threaded". Threaded discussions are grouped according to a specified subject.

For example, you might start a thread by posting on the subject of ICI's earnings. If I respond to your post, mine will be: "Re: ICI's Earnings" and so forth. All of the replies to your subject will be kept together. This makes it easy to follow each small discussion on a board. So threaded viewing takes the subject into consideration first, and the chronological order second.

Some of these bulletin boards are moderated, some are not. UK Shares, for example, is moderated. Simple rules are applied to the over-advocacy of a particular issue, and several administrators and moderators ensure reasonably orderly conduct without being intrusive. This website is run on a not-for-profit basis.

Some of these message boards are configured so that you do not actually need to go to them to read any responses to your message. The Global Investor Forum on International Investing allows you to receive replies to your posted messages automatically by e-mail. There is an advanced keyword search facility on message archives. You can also keep track of messages posted to the forum by setting up your personal forum monitor. Messages satisfying the keyword criteria you set will be forwarded to you by e- mail.

The Web will supply everything that most people need. But newsgroups on the Internet, known collectively as "Usenet", predate the establishment of the Web; they are the original virtual communities of the Internet. For access to the total of 28,240 newsgroups, you need another piece of software in addition to your Web browser. But only a couple of them are worth a visit for investment news.

The Usenet is the wilder side of the Internet, so use your common sense. Anybody who has a really hot tip about a share price move is also going to be clever enough to keep it to themselves. Treat what you read with a healthy scepticism.

BULLETIN BOARDS ON THE WORLD WIDE WEB

Global Investor Forums www.global-investor.com/forums

Hemmington Scott Information Exchange

www.hemscott.com/infoex/exchange.htm

Interactive Investor Insider www.iii.co.uk/insider

Market Eye eye-to-eye www.market-eye.co.uk

Motley Fool Message Boards boards.fool.co.uk

UK Shares www.ukshares.com