Risk Archive: Preserving a Financial Knowledge Base

The new RiskArchive.com website's header depicts a high-speed skeleton sledder, suggestive of the site's focus on risk management.

The new RiskArchive.com website’s header depicts a high-speed skeleton sledder, suggestive of the site’s focus on risk management.

Who remembers RiskChat.com, a forum on financial risk management that I had the pleasure and honor of hosting from 1996 to 2009? It was the go-to website for financial professionals to discuss risk management, trading, financial engineering and a host of related topics. Over its life, the forum accumulated some 15,000 posts, a valuable knowledge base for anyone who works in banking or institutional finance. Unfortunately, that knowledge base has languished in a broken-down website. Today, I have remedied that by launching a new site, RiskArchive.com, to preserve all that content in an accessible form. If you like, skip the rest of this blog post and start exploring its rich, archived discussions right away:


But if you would like a little history on RiskChat.com, or to learn why it folded, read on as I reminisce.

I launched the forum in mid-December 1996, barely six weeks after launching my primary website, ContingencyAnalysis.com. I was using a web-development software package called FrontPage. It was developed by an entrepreneur, Charles Ferguson, who had just sold it to Microsoft. This is the same Charles Ferguson who went into documentary film making and won a 2011 Academy Award for his movie Inside Job (you can read my movie review).

FrontPage made it easy for people like me, who were only discovering the magic of “hyperlinks” and “Netscape Navigator”, to build websites. It included functionality for adding a forum to a website. I figured “what the heck” and soon RiskChat.com was launched. A friend noticed my budding websites and asked if I could implement one for his retired father, who had a home-based business decorating walking sticks for resale. With FrontPage, it took me a couple weeks, working part time, to implement a campy website suitable for that hobby-turned-business. To show you how early this was in the history of the Internet, I was able to register the domain name WalkingStick.com for their site. Neither my friend nor his father understood the importance of that domain name, but they were delighted when a woman, searching on-line for walking sticks, tried typing “walkingstick.com” into her web browser. It turned into their first on-line sale.

Total postings to the RiskChat.com website by year.

Total postings to the RiskChat.com website by year.

Participation on RiskChat.com grew slowly. Early discussions were of Peter Bernstein’s book Against the Gods, gap analysis and, of course, value-at-risk. The topic “Do former traders make good risk managers?” drew a lively discussion three weeks after the site launched. Four days later, “Historical VaR” attracted an even livelier response. In its first year, the forum had about 34 postings a month. In its second year, 1998, that number grew to 45. At the forum’s height, in 2006, there were about 215 postings a month.

For much of the forum’s life, I took full responsibility for the site’s design. This partly reflected the fact that, at least in its early days, there wasn’t much of a web design industry. Certainly, there were graphic design firms who did such work for large corporations. They tended to be expensive. Freelancers were only starting to develop web design skills, and locating them was difficult. Word of mouth wasn’t much of an option. Most people still hadn’t been on the Internet, and they certainly didn’t know what a web designer did. Today, there are websites where you can post jobs for freelancers to quote on. Nothing like that existed in 1996.

How RiskChat.com appeared soon after it launched in December 1996. The unfortunate design was soon replaced. Note that the website appears on a contemporary Netscape browser.

How RiskChat.com appeared soon after it launched in December 1996. The unfortunate design was soon replaced. Note that the website appears on a contemporary Netscape browser.

RiskChat.com first launched with a rudimentary green and lavender design I had originally implemented for the ContingencyAnalysis.com website. At the time, I was using a logo for my risk management consulting practice that combined an electrocardiogram with the phrase “In case the music stops …” In that first design, I placed an animated GIF image of an electrocardiogram in the left sidebar. The image actually moved across a black screen, as if it were a heart rate monitor in an emergency room — pretty cutting-edge for 1996 web design!

The RiskChat.com website as it appeared from the early to late 2000s. The forum sported designs over its life. No images remain of the second one, which was used from the late 1990s to early 2000s.

The RiskChat.com website as it appeared from the early to late 2000s. The forum sported three designs over its life. No images remain of the second one, which was used from the late 1990s to early 2000s.

RiskChat.com originally had three forums labeled “General”, “Theory” and “Risk Selection”. I intended the third for discussions of trading or portfolio management. “Theory” was for discussions of finance theory or perhaps risk measures such as value-at-risk. Everything else would fall under “General”. Perhaps users didn’t understand these distinctions, or perhaps they didn’t find them useful. Most posted to the “General” forum. With the other two forums languishing, it wasn’t long before I consolidated everything into a single forum.

As part of that consolidation, I implemented a redesign of the website. Pretty much nothing remained from the original design except for the animated electrocardiogram, which I incorporated into a narrow “tower” that replaced the left sidebar. This updated design remained until the early 2000s, when I hired a freelancer to help me once again redesign my websites. Most of the sites − I had six by this time − were given identical designs, distinguished only by differing color schemes. RiskChat.com got the purple color scheme, which remained until the forum folded.

During its life, RiskChat.com attracted a number of competitors, none of which ever really compared. One notable example was a financial risk management forum launched by JP Morgan in the late 1990s. They must have spent a tidy sum on a design firm, because it was quite impressive. It styled itself as a sort of virtual bar in the shadows of Wall Street, where seasoned risk managers could congregate for virtual drinks and conversation after work. To create a mood, there were large cartoon-style images of the bar and its salty clients. One of them welcomed you and gave you the lowdown on some of the other fictional patrons. It was kind of a cross between Cheers and a prohibition-era speakeasy. Somehow this was supposed to facility meaningful discussions between real financial risk managers. I only visited the site once. There weren’t many discussions in progress. I never went back and never heard of it again.

I think RiskChat.com was successful for a few reasons. It was the first forum to serve the financial risk management community. It also attracted a number of committed participants who kept discussions at a high level of sophistication, people like Tjemme van der Meer, William Russell and Mark Taranto, not to mention other committed users who posted anonymously under names like Horseless and Breathtakingly Dishonest. I was the most committed of all. If someone posted an interesting question to the forum but attracted no response, I would try to help them, as limits on my time and expertise would allow.

The forum had no agenda other than to promote meaningful communication. Eventually, I posted some advertising to the site to supplement my income. Otherwise, it  was a forum by finance professionals for finance professionals. Horseless once explained why he preferred RiskChat.com to other forums:

When I started my Bloomberg this morning and went to TOP stories, the last story was about cheerleaders. I started to write this, but went back to get another detail about those cheerleaders, but by that time that story had been replaced by an extremely (and I mean extremely to the point of unprofessional) anti-Hillary Clinton editorial … And if you don’t think that is a good comparison, the website that promotes itself as THE website for quants continuously barrages you with scrolling ads for services, ads for their expensive seminars and classes, ads to sell you books, the forum is trolled by an employee that constantly suggests books related to the discussion topic you should buy from them, and is trolled by another owner constantly trying to sell you his headhunter services, and so on. I just went back to Bloomberg and the Hillary editorial is gone and replaced by something else. It makes no difference to me, I will continue to use my Bloomberg … by comparison to its peers, the politics here [at RiskChat.com] are rather mild and mainstream and the level of professionalism among participants is rather high.

Another advantage to the forum was its openness. Anyone could post without having to reveal their identity or go through some registration process. That openness also lead to the forum’s demise. Here is what happened.

In 2007, participation in the forum was off from its peak in 2006. The subprime crisis was brewing. People were getting laid off or were having to work long hours. They had little time for the forum. At about the same time, comment spam emerged as a serious threat to web-based forums. People had long been accustomed to e-mail spam. Comment spam was similar. Computers, called robots, would troll the Internet looking for open forums. When they found them, they would start automatically posting advertisements to them. At first, the volume of comment spam was modest, maybe a few posts a day. I just got in the habit of deleting the ads as they appeared. Eventually, the volume increased to tens and then hundreds of spam postings a day.

FrontPage was designed years before anyone could even imagine of such a thing as comment spam. Microsoft had released the last version of FrontPage in 2003 and had since stopped developing for or even supporting the software. What had been an innovative product in 1997 was, in 2007, outdated software. It had no functionality for combating comment spam. I played with the software and jury rigged my own solution. Whenever a new robot started posting spam to the site, I would make a copy of the forum that participants could post to while the robot blindly continued to post its ads to the old one. I juggled things so the switch was transparent to users. In the background, the robot posted its spam, but it went to a hidden forum no one ever saw.

My consulting and training business has always been a one-man shop. Years ago, I decided I didn’t want to supervise employees. I just wanted to help organizations manage risk. I have always limited myself to working for a few clients at a time, no more than I could handle single-handedly. This left me little time for battling spammers, and i had no employees to turn to for help. All the while, spammers were getting more sophisticated, constantly tweaking their robots to circumvent the defenses I and other forum sponsors erected. Eventually, the robots were no longer fooled by my duplicate forum trick. When that happened, Riskchat.com started receiving thousands of spam postings a day, and I was helpless to stop it. People gave up posting to the forum. What was the point? No one would ever find their legitimate postings amidst all the ads for viagra, pornography and “Russian brides”. I had no choice but to shut the site down. My plan was to find a new defense against all the spam and relaunch the forum, maybe in a few days. But that didn’t happen. I already had too many demands on my time, and working on the website was going to be a large undertaking. Days turned into weeks, and the forum sat silent. I never turned it on again.

While RiskChat.com may be history, I am pleased it will now live on as RiskArchive.com. I encourage you to use it and tell others about it. It should be a valuable resource for many years to come.

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