This Message Board May Really Light Up

The Value Investors Club is a free Net bulletin board for stock ideas. It's open now, but will be limited to 250 stock-pickers with the best ideas

Here's a tip for you: Your next great investment idea may come from an Internet message board. No kidding. If you're skeptical, check out an unusually promising new site, Value Investors Club (

It's not Sam's Club meets Wall Street. It's a cleverly designed bulletin board for stock ideas, the brainchild of Joel Greenblatt and John Petry of Gotham Capital, a closely held Manhattan investment firm. Launched last June, the free site aims to draw together the best picks from investors keen on cheap "value" stocks and such "special situations" as spin-offs and recapitalizations. "It will end up being the site with the best-quality ideas on the Web," Greenblatt predicts. "Of course, that's not saying much at the moment."

Greenblatt told me this the other day in his bright corner office on the 51st floor of the Citigroup Center. So far, Gotham has invested about $400,000 in the Web site. The potential payback, he said, is profiting from investments in the ideas the site attracts. To work, those ideas will have to be extraordinarily good--far from the junk found at most message boards and chat rooms.

That's why Value Investors Club has imposed strict rules. For one, Gotham plans to cap membership at 250. About half those slots have been filled. Getting in takes an application that makes the case for an investment idea, in 300 to 500 words. If the quality of your research and thinking pass Gotham's muster, you're in. (Naturally, Gotham as easily can boot you out.)

"VERY BAD IDEA." Next, your idea gets posted at the site, under an anonymous screen name, for other members to read and discuss. Finally, to stay in the club, you're expected to post at least two and no more than six ideas per year, a key difference from most unmoderated investment sites. "We're looking only for people's best ideas," Greenblatt said.

The best part of Value Investors Club is that until it reaches capacity, nonmember "guests" may freely tour the site. More than 120 ideas have been posted to date. Many are intriguing. For example, on Feb. 4 a member with the screen name "ad188" posted a bullish note on Barnes & Noble (BKS), which makes a reasonable case why the retailer's intrinsic value may be more than $40 a share. The stock remains near $26, where it was when the club posted the note.

Other picks have jumped more swiftly (table). Avaya (AV), a Lucent Technologies (LU) spin-off, was highlighted in December at $11.13 a share. It recently traded at $16. On Jan. 13, after the stock gained 43%, the member who picked it, "vish6," posted a refreshing warning: "The company may now be fairly valued. There could be plenty of scope for more upside for long-term holders [as the restructuring bears fruit], but the short-term pop that I was betting on may be over."

Members can rate each idea on a scale of 1 ("Very bad idea, do the opposite. How did this person get admitted to the club?") to 10 ("Best idea I've seen in three years."). As with any investment idea, ultimately it's only your own research, verification, and judgment that can improve your odds of success.

As clubmeister, Greenblatt brings deep experience. Besides investing via Gotham, where he had an enviable record from 1985-1994, Greenblatt teaches securities analysis at Columbia University's Graduate School of Business. He also wrote the 1997 book, You Can Be A Stock Market Genius. Gotham seems shrewd enough never to post its own best ideas for others to exploit, yet has already happily profited from at least two club picks. That said, you might find a winning idea there, too.

Questions? Comments? Send an e-mail to or fax (321) 728-1711

By Robert Barker

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