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A Precise Way To Hedge The Dow


Readers Report

A PRECISE WAY TO HEDGE THE DOW

If your readers are considering put options that "let you stay in the market with the stocks you like, secure in the knowledge that you can't be wiped out if the Dow Jones industrial average heads south," you gave them the second-best advice ("A safety net for your nest egg," Midyear Investments Outlook, June 15).

If you want to hedge against a DJIA decline, put options on the Dow itself would be the vehicle of choice. Options on the Standard & Poor's 500-stock index, which you recommended, would be better for The McGraw-Hill Companies, publisher of business week and owner of Standard & Poor's but otherwise a less precisely targeted solution.

David E. Moran

President

Dow Jones Indexes

New YorkReturn to top

DON'T OVERLOOK THE TERROR IN TIBET

Your essay, "Don't let Congress shanghai China policy" (Economic Viewpoint, June 15), was troubling. It seemed to suggest that congressional concern about human rights in China was merely a "short-term political current" or an "annual brouhaha" and that Congress should focus only on promoting trade. You implied that, at this juncture in history, anything else is a distraction.

I have just returned from Tibet, where people cannot speak, write, travel, assemble, or practice their religion freely. I do not believe that it is possible for the U.S. to maintain a stable trade policy with a government that can sponsor the brutality China is currently inflicting on Tibet. Most Americans still recognize that there are values more important than greed. It's fundamental to our history and culture: We stand up to bullies. We don't subsidize them.

Edward C. Fargis

New YorkReturn to top

CANADA'S PUBLISHERS JUST NEED A LEVEL PLAYING FIELD

The crux of the matter in "Does Canadian culture need this much protection?" (News: Analysis & Commentary, June 8) is that the measures in place today were instituted to ensure a viable Canadian publishing industry, particularly for publishers of trade and consumer magazines.

Given their average profitability of under 5%, most Canadian publishers would find it impossible to compete against U.S. publishers. Using U.S. editorial content, art, and photography, the Yanks could undercut advertising rates charged by Canadian publishers--the editorial equivalent of dumping.

An erosion of advertising revenue would probably wipe out the industry. Canadian publishers are not seeking protection from competition but want to ensure a level playing field. Without measures to provide for that, Canada would be awash in regurgitated U.S. editorial and have no further basis for a consumer- and trade-magazine publishing industry of its own.

Paul Plesman

President & CEO

Plesman Communications Inc.

TorontoReturn to top

JACK WELCH: ROLE MODEL OR RASCAL?

I disagree with the closing analysis of "How Jack Welch runs GE" (Cover Story, June 8), which leaves the impression that General Electric Co. will not prosper without Welch as Chief Executive Officer. This could hardly be further from the truth.

Jack Welch does not motivate people. People motivate themselves. No single person can take a company from $12 billion to $280 billion by himself. It takes an army--such as the army that Jack has built by creating an environment that attracts and retains the best and the brightest. Jack's legacy will not be his ability to motivate, it will be the environment he has created, one that will prosper beyond his time at the helm.

Mike Higgins Jr.

Prairie Village, Kan.

I was struck by the similarities between Jack Welch and my grandfather, Walter Hoving, chairman of Tiffany & Co. for 25 years. I was also struck by the differences. I wondered what Walter Hoving would have done if he had been told his company was responsible for creating 81 toxic Superfund sites across the U.S. through PCB contamination.

Would he have launched a public-relations campaign downplaying the toxicity of fish tainted with PCBs, a compound banned worldwide? Would he have spent large amounts of shareholder money on a lobbying campaign to amend the federal Superfund law to limit industry liability for the costs of toxic cleanups?

I think not. My grandfather's sense of responsibility to the country he loved included a moral conviction to do what is right. Welch epitomizes the stereotypical corporate leader whose sense of responsibility is driven by the short-term bottom line. The things that inspire many of today's business leaders to greatness are a sad departure from what made business leaders great in my grandfather's time.

John Hoving

Garrison, N.Y.Return to top


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