(FORTUNE Magazine) – Don't get me started on the subject of investment message boards. These online financial hootenannies are dangerous at best, and at worst the investment version of poisoned Kool-Aid. Pity the poor suckers (er, neophytes) who scrolled through Yahoo's Boston Market message boards after the restaurant chain's recent bankruptcy filing. With the stock trading at a few pennies per share, someone known only as "elysse1kittycat" posted a message announcing she had "bought 2000 shares of Boston Chicken last week at .47" because she likes the restaurants and the food, and has a gut feeling the company will "emerge from Chapter 11 within a year and will go back to $5-$10."

Never mind that the original stock of nearly every company that has ever filed for bankruptcy has been extinguished. Comments like elysse1kittycat's, aided by unfounded online chatter that Boston Market would be acquired by McDonald's, caused the stock to fly back to $1, much the way a similar spurt of message-board bravado caused the stock of the then-bankrupt Discovery Zone to bounce before it eventually went to zero. That's the way life is on message boards, where everybody's an expert, and nobody's too bullish.

My first introduction to the boards, as I wrote here recently, was back in the highflying days of Iomega, when I was routinely attacked on America Online's Motley Fool for questioning the stock's rapid rise. That was a mere three years ago. Today message boards have flourished with the rise of sites like Silicon Investor, which is devoted to tech stocks, and the all-purpose investment message boards on Yahoo. Message boards play off the interactive nature of the Internet, and in theory, at least, they're a good idea: They're supposed to level the playing field by giving the little guys a place to congregate. Rather than rely on brokers, analysts, and the news media, investors can compare notes and, if all goes well, beat Wall Street at its own game. Some posts can be well written and informative. On small stocks it's not uncommon for them to break news before Dow Jones, Bloomberg, or Reuters. And if you're lucky, corporate insiders (anonymously, of course) will post confidential inside information.

So why am I such a grump? Because in practice, rather than leveling the playing field, the most active message boards generally turn into giant cheerleading sessions that have little tolerance for anybody who dares to suggest that a company might be facing trouble. Because I've seen one too many gullible first-time investors panic and plead, "Will somebody please tell me why this stock is falling?" Because anonymity is a hallmark of the message boards, which means there's no accountability. (Made a bad call? No problem, just post under a different name.) Because even when the posts aren't anonymous, you have to be on the lookout for misinformation. For example, two years ago, when I was writing aggressively about a possible slowdown at heavily hyped C-Cube Microsystems, Connecticut money manager Robert Gintel waged a public campaign against me on the boards in an effort to convince investors that the chipmaker's stock was headed higher. Gintel wrote that I was "a complete investment dilettante with no real investment research acumen or knowledge whatsoever...caring very little about the factual correctness of the information" I passed on. That, of course, was before C-Cube's earnings, and stock, went the route of every other chip company in its space and tumbled.

Then there was the online reaction to my recent column that suggested that Galoob Toys was in talks to be acquired by Hasbro. One reason for the sale, I had written, was that Galoob didn't have the cash to cover future obligations. In response, one influential genius known as "bkinvest" wrote, "Now, I realize that even the most ill informed on this board know more than Greenberg on Galoob. Galoob does not need to sell out to Hasbro because of cash-flow issues." Within days, Galoob announced that it would sell itself to Hasbro.

More recently the online flaming has turned to questions my column has raised regarding Compaq Computer, whose message boards, with their overzealous, passionate postings, are throwbacks to the days of Iomega.

In the past year or two, as investors have grown tired of small-cap stocks, activity on the boards of large companies like Compaq has picked up. I know one money manager who makes a living shorting the stocks touted on the most active boards because they create momentum that takes the stocks well beyond their fundamentals. "On the smaller boards you may have had 50 or 100 active posters who were vehemently opinionated about a company," he says. "When you get to a Compaq, you might have 5,000." I can only imagine what that herd will say about this column.

HERB GREENBERG is senior columnist for The Street.com. His E-mail address is herb@thestreet.com.