In 1984, when Morningstar began operations, U.S. stock and bond mutual fund assets had just crossed the $200 billion mark. That figure would double during the next two years, which gave Morningstar a nice boost as a fledgling research company. Fund industry assets would eventually peak at nearly $10 trillion in 2007, before sliding back to about $7 trillion today.

Most of the monies in the early days flowed into so-called "government guaranteed" funds--government bond funds that paid much higher yields than cash, and whose "guaranteed" labels often fooled investors into believing they could not lose money. But lose money they most certainly could--and did in early 1987, when interest rates rose. Shortly after that debacle, the SEC banned the use of the word "guaranteed" in a mutual fund's label.

In October 1987, the stock market shriveled on Black Monday. Ironically, Morningstar benefited somewhat from that misfortune. The market crash dissuaded potential competitors from entering the business, which gave us the next six years to develop largely uncontested. In every dark cloud …