The rise is unusual given it includes no advertising other than word of mouth. And at current levels, it's fair to surmise that Diehards.org is getting much more than just disenchanted Morningstar participants.

Now in its 10^th year, the Diehards forum has built a reputation as one of the best sites on the Internet. You can find some of the most intelligent discussions on everything from debates about individual asset allocation plans to critiques of the latest research and articles pertaining to index mutual funds and exchange-traded funds (ETFs).

Even IU regulars such as Rick Ferri and Larry Swedroe hang out at Diehards.

"The philosophies of IndexUniverse and the Bogleheads site are very similar," said Mel Lindauer, who helps moderate Diehards.org along with Larimore and other veteran investors. "Both focus on low-cost funds and self-education for passive investors."

The mainstream media has even caught on to the site's influence. Magazines ranging from Forbes to Money have written laudatory pieces on Diehards. National dailies such as the Wall Street Journal and USA Today have also featured the group.

In early 2006, Wiley & Sons published The Bogleheads' Guide to Investing. It was co-written by Larimore, Lindauer and Michael LeBoeuf, another long-time Diehard.

"Our problem now is making sure the quality and integrity of the forum remains solid," Lindauer said. "We really strive for accuracy. Anybody can have an opinion, which is fine. But we work hard to point out when posts aren't factually correct."

And that can be quite a task for an open forum with some 5,500 registered members. (Anyone can read content, but you've got to pick a user name and provide an email address to post).

"We don't want a lot of people posting using different aliases," Lindauer said.

The current moderators at the newly independent site don't want to degrade Morningstar. They say the Chicago-based investment researcher gave them a start and the resources to gather a community. And they genuinely appreciate that support.

But in this age of MySpace and Facebook hysteria, it's odd that Morningstar let so many eyeballs go their own way. In the end, it's turned out to be a blessing in disguise for investors. The revamped Diehards.org is better organized, easier to navigate and much more intelligently moderated than the older version.

And it's becoming a true social networking site. There are meet-up groups forming and getting together all the time around the country (something that started over at Morningstar). The Diehards even have their own convention each year, something that IU believes has become a truly major event in the indexing community. 

The grassroots effort that started Diehards will no doubt keep it popular for a long, long time. But one has to wonder about the now publicly traded, ever-expanding Morningstar. Although its chat areas are definitely a noncore part of its business, the Diehards episode should be a wake-up call.

Morningstar fell into the trap of not listening to its customers. As a result, this industry icon has lost a lot of luster with index investors. And that's a real shame.

Murray Coleman is manager editor of IndexUniverse.com and research director for Index Publications. He can be reached at (415) 839-9740 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it via email.

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