This article appeared on the GNN site in 1994. GNN is no more, so I put up a copy of the article here. Both the web and my personal work situation have changed dramatically since then, so it's rather dated, but I still assemble the FAQ in the same way. Enjoy.

An Interview with Christopher Lott

by Abbot Chambers
April, 1994

I stumbled across the Investment FAQ soon after I began roving the Internet in search of personal finance information. For those not familiar with the term, a `FAQ' is a collection of answers to Frequently Asked Questions that appear all too regularly in a Usenet newsgroup, in this case the group misc.invest. The idea behind these documents is to improve the signal-to-noise ratio in a newsgroup by reducing the need for readers to post detailed answers each time the same question is asked - the answer is already available in the FAQ. The Investment FAQ is such a remarkably complete and well organized document that I was actually surprised that it was available for free on the net. The subjects covered by the Investment FAQ range from Derivatives to ADRs to Zero-Coupon Bonds. In many cases, I found the information available from the FAQ to be superior to similar material found in basic investment books and magazines.

The compiler of the Investment FAQ is Christopher Lott. Chris presently resides in Kaiserslautern, Germany, where he works as a research assistant at the University of Kaiserslautern [see header; I no longer live in Germany]. The interview that follows, conducted in April 1994, is a testament to the communication made possible by the Internet. The fact that Chris is over 5,000 miles away and usually wrapping up his workday at a time when I'm thinking about a second cup of morning coffee did not have the slightest negative effect on our dialogue. My hat goes off to Chris for taking the time to share his thoughts.

Chris, what would you say to someone who asks where he or she can find "real time" stock quotes on the Internet?

Wait, you missed something - everyone wants them for free! This is the holy grail of the misc.invest.* groups, by far the most frequently asked question. Like the holy grail (WOT is your name? WOT is your favorite color? WOT is the airspeed velocity of an unladen swallow?) everyone is searching and only those willing to part with serious bucks will get it. You can become a Dow Jones News Retrieval subscriber, access DJNR over the net, and get real-time quotes that way. In brief: check the FAQ for a list of data sources.

How did you come to be the compiler of the Investment FAQ?

Here's the rough history, as best as I can reconstruct it. Around 1990 I had enough money to buy a few stocks, and a buddy to discuss stocks with. So we were buying stocks and trying to figure out how not to lose our shirts. About that time I started reading misc.invest in the hopes of gaining additional insight, information, etc. I started collecting the useful articles that from time to time would come across the wire by force of habit; I inherited some pretty strong pack-rat tendencies from my father! By late 1992, not only did I have a pretty good collection of useful articles, I also saw the low signal/noise ratio in misc.invest as a problem and thought that a FAQ might help the group. I had seen how useful FAQs could be in other groups and figured that since no-one else seemed to be volunteering, I would throw together the articles that I had collected and see if it snowballed. Well, it did.

How do you go about assembling the FAQ?

I really rely on the readers to do the thinking work, I just put the thing together. I read the misc.invest, misc.invest.stocks newsgroups and squirrel away the occasional good explanation. In the past I have posted calls for articles on specific topics, but those pleas rarely yield much. People regularly mail me notes to ask for articles about a specific topic. Because I simply don't have the time to do everyone's legwork, I just reply to say that I'm nominating them to post the question, do the research, and write the article, because they are clearly the ones with the interest in the answer. Sometimes it works, more often nothing comes of it, which is disappointing to me, because often the questions are good ones, ones to which I personally would like to know the answer as well.

A point that I feel is important is that I try to compile relevant articles and give the individual contributors credit on each article. I do not try to edit together one long, comprehensive explanation of Life, the Investment Universe, and Everything, and only give credit to the contributors in general. That's why I call myself the compiler, not the editor.

I'm a big fan of the unix utility `make,' so after a few months of compiling articles I hacked together a few shell scripts that put the individual articles together into a few postings. Now all I do is type `make' to create a new release. So of the time I spend on the FAQ, most of it is spent in corresponding with people about their articles.

I know I'm getting long-winded about the FAQ, just one more point about philosophy. I try to stick to factual information, in any case non-copyrighted stuff, about investments. I steer clear of copyrighted lists typed or scanned in, and I also make an effort not to publish articles with specific advice about investments. There are thousands of strategies out there (buy the books in your favorite bookstore), so except for a little advice about beginning investors, the FAQ is advice-free. Readers have to make up their own minds about what to buy and when (likewise for selling). Besides, if I had a sure-fire strategy, do you think I'd be editing a FAQ? Heck no, I'd be down in the south of France somewhere.

Do you think the FAQ has been a success?

We're renewing our acquaintance with Mr. Dave Rhodes and seeing requests for free sources for stock prices so frequently lately that I'm not so sure anymore! I used to think that the FAQ reduced the incidence of the really common questions to some extent. Now in 1994 there seem to be so many people gaining new access to the new who do not even know what a FAQ is, never mind that they should look for one before posting to a new group, that it doesn't seem to be raising the s/n ratio of the group. Still, I think the document has become a useful resource for investment-related information, and I've received quite a few nice notes from people who learned much from the FAQ.

How has misc.invest changed since you first became involved with it?

It has become a lot busier! Today the number of newcomers to the net is noticeable. The same question, usually answered in the FAQ, is asked over and over again. Chain letters keep appearing. People reply far less frequently with a helpful answer, more frequently with flames. I don't want to overdo the analogy, but the transition from a relatively small group (more like a family) to a huge city seems to show typical human reactions; more hostility and less helpfulness.

What benefits do the misc.invest groups offer to investors?

The chance to get flamed within an inch of their lives and to get their pride seriously dumped upon! No seriously, there are some free-ranging discussion across an enormous spectrum of issues. People have the chance to talk to computer science experts about computers, chemists and doctors about pharmaceutical companies, electronic engineers about cellular phone companies, etc. Another main benefit is timely discussion about events in the news. Also the chance to ask direct questions about their own 401(k) plans or whatever and to get answers, usually right, for free, within hours - that beats writing to a newspaper columnist or paying a certified financial planner by a long shot.

What would you say to someone who was planning to buy a stock based on a tip from a misc.invest posting?

Based solely on a tip from misc.invest, I'd have to say the person is a lamb waiting to get fleeced. But I don't want to be too harsh. In general, if all a person knows is the ticker symbol and a few words from a posting, I'd say that the person doesn't belong in the stock market. However, it also depends on the tip. Some people push issues on the Vancouver exchange, where fraud is known to be rampant, share prices are in the pennies, etc. One recurring example, it's like a nightmare, is Wye Resources, some goofy diamond company or something that a few people keep flogging. I think that you can pretty much forget those. Then there's the tips about major issues that have been heavily sold and seem to be priced attractively. For example, Merck, IBM, and Sun Micro have all seen heavy discussion in the recent past, both from people who think they are attractive - or not. I especially enjoy reading analyses of these tips, if you want to call them that, because I think they provide useful insight both into the companies and into how other people analyze companies and price movements.

Do people become wiser investors for reading and/or participating in misc.invest?

They certainly will become wise posters and readers, and I think they can benefit in their investing. I certainly have, but I cannot speak in general. I've learned a bit about how cold calls work (and how to deal with them, although I don't get any cold calls overseas), what a trade should cost with a discount broker (about $30), why I really don't have any business messing with options (too risky, too fast moving), why I probably don't want check-writing privileges on my mutual fund (too many taxable events to report), and such things. Each one is small, but together they are things that I would only have figured out on my own after getting mildly burned. It's always nice to avoid getting burned.

Would your investments suffer if you were "unplugged" from the Internet?

Argh, the withdrawal symptoms, the twitching fingers, the compulsive desire to read news! Seriously, I think my investments would suffer little. I find the newsgroups just another source of information, once in a while quite helpful, all to often not. I would be a lot less in-touch, but I'm not a day trader, so the daily movements aren't that important to me.

The misc.invest.stocks and misc.invest.funds groups were created about four months ago to create a more focused forum for people who wanted to talk about specific types of investments. Do you think they have been successful? What impact have they had on misc.invest?

Don't forget misc.invest.technical. I think that in large part the funds discussion has moved into .funds, the technical into the .technical group. So in that sense, yes, they have been successful. However, I don't read either of those groups, I can barely keep up with the total 4 or 5 groups I read now! The split between misc.invest and misc.invest.stocks is not going as well, and for good reason. The split in topics is not clear in many cases. Many people cross-post to both groups, and discussion often meander along, long after the follow-up-to line should have been changed.

If you were made misc.invest czar, how would you improve the quality and consistency of the misc.invest hierarchy? Would you create more groups? Would you have moderators?

This is a good chance to quote Gene Spafford of Purdue University:

"Usenet is like a herd of performing elephants with diarrhea -- massive, difficult to redirect, awe-inspiring, entertaining and a source of mind-boggling amounts of excrement when you least expect it."

No single person can bring that under control! A quantitative improvement requires participation from the readers, or a thoroughly moderated (and thereby stifled) group. To put it another way, people will get out of misc.invest.* in proportion to what they put in. I don't think moderation is the answer. Moderation raises the s/n ratio dramatically, but it costs time for the articles to flow through the moderator, and the timeliness of the articles in the misc.invest.* groups is important. No-one wants to read about old financial news after it has been in all the papers and on W$W. Also, I think moderation works especially well in technical groups where answers are either right or wrong. There's not much to debate about how to attach a printer to a computer, but there is much to debate about a company and there is no clear right or wrong.

Still, a digest for some of the groups would be excellent - someone could weed out the nonsense and publish the questions and best answers for a week or whatever. Incidentally, that would save me boatloads of time scanning the group for nuggets of wisdom. Perhaps a moderated group misc.invest.digest where these digests could be posted, that would save the trouble of a mailing list and guarantee wide distribution. This is along the structure and idea of rec.humor and rec.humor.funny (although that group has long since ceased to be funny).

A few concrete proposals about groups: delete the misc.invest group; it is just a catch-all. You don't see a comp.sys group out there, do you? Create misc.invest.bonds, misc.invest.derivatives, misc.invest.misc, and a few others as the need arises. That would force people to choose an appropriate group when they post. Of course, this would force me to split up the FAQ, but maybe it's high time for that.

Rick Labs recently proposed a complete reorganization of the hierarchy, one which would result in 24 groups. What did you think of the proposal?

I think he was headed in the right general direction but took it too far - the groups were just too detailed. Many of his groups seemed to be a solution in search of a problem; i.e., he wanted to create the groups and hope that the participants would flock to it. I think the process should work the other way around; first identify the need based on actual traffic, and then create a group for that traffic.

As far as available resources go, how do Internet resources compare to such resources as books, magazines and newspapers, television programs, other on-line systems, etc.?

A lot more timely. But posted articles, what I consider the indigenous Internet resource, are naturally a lot shallower than magazine articles, but like I said, they are highly timely. Also, articles that appear in magazines etc. are copyrighted and so only appear on the net if the information provider gives permission; these are few and far between. Naturally the databases of stock prices is not available anywhere else without paying a bit of money, and Martin Wong's quote server is an especially convenient, electronic, and timely version of the daily paper.

What other Internet investment resources do you find useful (e.g. shareware, LISTSERVs, data archives, newsletters, Holt's Stock Report)?

I like Holt's daily market wrap report very much, although I wish he would quit soliciting for donations for that service. I get Tom Petruno's Market Beat column mailed out a few times a week, I enjoy reading that. But there is astonishingly *little* free software out there related to personal finance. Appears that the commercial software providers have this area pretty well covered, or maybe just that the people who can write the software and would be willing to donate it are not interested in personal finance topics. Maybe they're all too busy with the GNU project.

The academic financial community has started to jump on the net - they have FEN, the Financial Economics Network, run by John Trimble. This is essentially a big mailing list, I think that was easier for those people to get started and push to their members than a bulletin-board news group. I recognize the value of those discussions, but my single micro-economics course and reading of Malkiel's book (Random Walk) didn't prepare me for their discussions of market theories etc.

What investment resources would you like to see available on the Internet that are not presently available? Is there any reason to hope that they will someday become available?

Everybody wants something for nothing and I'm no exception. It would be great to get stock quotes, columns from the WSJ, articles from the various financial magazines, transcripts of Wall $treet Week, etc. on the net. More practically, it would be interesting if some of the paid bulletin board services would port some of their services to the Internet. There are many bulletin boards with extensive data and relatively low subscription rates. If they could use the Internet as their transportation medium instead of phone lines or floppy disks, that would be interesting. This might mean a paid services that would act as mail servers to send out quotes, maybe 15-minute delayed, the end of the day, or the end of the week. A new company called QuoteCom ( is working on this, with a target start-up of mid-May, 1994. Still, I do not think that comprehensive data will ever become available for free.

What do you think about the "commercialization of the Internet" (i.e., advertising, on-line ordering, commercial providers, etc.)? Do you think Usenet will resist commercialization? Or can we expect to see something like "misc.invest.funds... brought to you by Fidelity"?

Not unless Fidelity wants to donate a 1Gb disk to every site that carries their ads! (Can you see Fidelity calling up Fuji or IBM? Hi, we'd like a quote on 200,000 of your best 1Gb disks? No, I didn't say a disk with 200,000 characters of storage, I mean 200 thousand of them puppies. No this isn't a joke. Hello? Hello?) I think commercialization will continue in the vein already established by Clarinet; i.e., entire hierarchies that are devoted to commercial messages and each site can choose to carry it or not to carry it. The free-for-all groups will never die and the self-policing against commercial messages is highly effective. Anarchy lives and flourishes on Usenet.

Also, I don't mean to be too self-serving, but I find GNN's approach to be reasonable - they offer ads, but each reader can choose to see the ads, or choose to ignore them. I wish I had this freedom to choose not to see ads on my television set!

Do you think the World Wide Web will change the way people get investment information from the Internet?

Basically all of the information available on the WWW about investment stuff is plain-text that has been shoehorned into a WWW frame. I think the web can be used to concentrate pointers to a lot of information in a single place, and offer a very convenient, pretty interface to the information. It will make the info accessible to more people, and more easily, than the current hodge-podge of FAQs, mailing lists, etc. It may result in more services being offered because servers like WWW make it easy to do so, and that would be great.