iExchange Stumbles on the Research Hurdle - 500 Beiträge pro Seite

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iExchange Stumbles on the Research Hurdle
By James J. Cramer

4/2/01 12:55 PM ET






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During the great bull market of the last 1/100 of the twentieth century, we decided that the mob had more wisdom than the professionals. I have always thought that was the thinking behind Motley Fool: a recognition that, if you break away from the institutional restraints placed on brokers, you can get higher quality research.

That was certainly the logic behind Raging Bull, the stock-message board Web site, which seemed to have at its heart the ability to root stocks higher, regardless of the fundamentals. And it was in the charter of iExchange, the site which went belly-up last week, to provide a forum for individuals to write up research on individual companies and possibly sell that research.

Last July I pronounced this site dead, which, in retrospect, was a little premature. Nevertheless, when I think about all of these sites, I come back to the gullibility of the venture capitalists. They really felt that research was easy. They felt that there was nothing to it. What an amazing development. The tragic thing about Wall Street research is not that it is corrupt and that, once separated from banking, it would somehow become good. The tragic thing is that most people can`t pick good stocks unless the market itself is robust.

Now we have a tough market as we have had many other times in the last 100 years. And we now know most people cannot recommend good stocks to save their lives. I can understand that many younger folk first getting started in the market might have bought into the notion of how easy it was to pick stocks. But the venture capitalists had been around. Kleiner Perkins Caulfield & Byers, the biggies behind this iExchange site, had to have known that picking stocks is no picnic. They had to have realized that if the market went bad, picking stocks for most would go bad, too.

When I think about sites like iExchange it reminds me of how far a field we got during this era. We went from thinking that it was next to impossible to make money in the stock market -- a prevalent view up until the `80s -- to thinking that only the corrupt nature of Wall Street kept people from making money. When I last looked at iExchange, nobody was making any money for anybody. Believe me, if people were making money for people, that site would still be knocking the cover off the ball.

I, for one, won`t mourn this site. I want people to realize how hard this game really is so they will lose less money. The demise of iExchange just serves as one more benchmark of how ridiculously easy things had gotten, and how hard they have now long since become.



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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com`s sites and serves as an adviser to the company`s CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]

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