Taylor Larimore spends 40-plus hours a week working with investors to tweak their long-range investment plans.
But he rarely meets any of them. Instead, he posts online. "Nearly half of my time is spent doing research to make sure my answers are as accurate as possible," said Larimore in an email. "I don't like to give opinions unless I can back them up with facts and figures."
The ex-Chief of the Small Business Administration's finance division in Miami uses much of his retirement time to help build http://www.diehards.org/. It's a volunteer-run, grass-roots investment site that has built a tremendous following among novices and experienced index investors alike.
Besides IU, it's one of my favorite investment sites. It's a free resource that everyone should at least check out. And it's even better these days since breaking away from Morningstar.com's discussion boards, where Diehards first started.
Don't get me wrong, Morningstar is one of the good guys in the investments industry. So I say this with a high degree of reverence: Folks, you really blew it.
Here's the backstory. As a complement to Morningstar's Vanguard Diehards forum, a group of computer-savvy indexers formed http://www.diehards.org/. Besides serving as an archiving system to long-ago discussions, the site provides a superior search engine to Morningstar's paltry and glitch-riddled offering on the original forum.
Last year, Diehards.org expanded in a big way. An all-volunteer army built a new discussion site. (Interestingly enough, they're using the same software we use for ours at IU.) It's called the Bogleheads forum, named after Vanguard founder and occasional poster John Bogle.
To make a long story short, the new forum has far surpassed the old one, raising the question of whether Morningstar's name is really much of a draw to indexers anymore.
Consider that the old Diehards registered some 2,833 posts over 299 conversations in the past month, according to the Diehards.org software. (Those figures were through midweek.)
At the new forum, some 19,003 new posts in 1,885 separate conversations had been logged in that same time frame.
"Since we're indexing all of the Morningstar Diehards posts as well as our own, we can prove these numbers are correct," said Alex Frakt, who serves as the Diehard.org's site administrator. In real life, he manages an immigration law firm in Chicago.
What happened? As we like to say at IU, the numbers speak for themselves.
In its early days some eight years ago, Morningstar's Diehards forum averaged around 57 posts per day. Those steadily increased to 289 and peaked with a 30-day average of 396 in December 2006.
In February 2007, the independent Bogleheads' Forum launched. In its first full month, the new chat area averaged 368 new posts per day. At Vanguard Diehards, traffic dropped to a daily average of 205 per day. In April, it fell to 152 before stagnating at around 125 in the next five months.
"So they sort of stabilized at around 125," Frakt said. "But then they decided to completely redesign its site in September. It was a disaster."
Almost immediately, traffic at Morningstar's Diehards forum plummeted. In November 2007, for example, average daily posts fell to 77. By last December, daily posts were down to a meager 56 on average. Essentially, Morningstar had shot itself in the foot, dropping participation to similar levels as when it first started.
"A lot of people complained that they didn't like Morningstar's software anymore and their site was extremely slow," said Frakt. "Morningstar just didn't keep its forum up-to-date."
This year, the old Diehards site has gained some traction, up to around 94 per day in the past 30 days through Wednesday. "That includes a partial redesign of the original redesign," Frakt said. "It fixed some of the worst problems Morningstar was going through."
Meanwhile, Bogleheads stayed fairly steady around the 345 range in its initial six months. "After the rollout of Morningstar's redesigned Diehards in the fall of 2007, our numbers started immediately going up to around 500 posts on average per day," Frakt said.
Morningstar declined to comment on this story.
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