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How Does Steve Cohen Do It?

Your article about "Stevie" Cohen was infuriating ("The most powerful trader on Wall Street," Cover Story, July 21). Clearly, the markets are stacked in favor of people like SAC Capital Advisors founder Steven A. Cohen, who (according to your writers) trades on special, nonpublic, material information that is unavailable to the public.

Geoffrey Batrouney

New Rochelle, N.Y.

You note that SAC Capital Advisors pays full commissions and thereby receives analysts' recommendations ahead of the general public. How is this different from one of his traders acting on information from his analyst wife before it is made public?

Ted Levin

Grant, Koehler & Levin Ltd.


Editor's note: The writer is a partner in an investment advisory firm.

"The most powerful trader on Wall Street" did not make it clear just how effective the alleged "three aggressive tactics" have been for SAC Capital Advisors, and you neglected to mention the extent to which SAC uses the legal practice of "front-calling" (not to be confused with the illegal practice of "front-running"). I suspect that such tactics would not add more than a few basis or percentage points to long-term returns, and that most of SAC's returns have been caused by other factors.

Charlie Stromeyer Jr.

Concord, Mass. As a black professional male, I find it insulting and offensive that supporters of affirmative action resort to desperate and dishonest gloom-and-doom pieces about black progress ("Progress without parity," Economics, July 14, and "Black progress: Two ways to look at it," Editorials, July 14).

First, the often-cited wage gap between whites and blacks: The article fails to mention that more blacks live in the South, where wages and costs of living are lower. Nor does it mention that among married couples, blacks are more in parity with whites, in some cases making more than their white counterparts. Wealth and income are not easily correlated because wealth is more about keeping what is earned through income.

If there should be any type of affirmative action, it should be based on need, not race.

J. Perry Fecteau

Fairfield, Conn.

For African-Americans to achieve economic parity, they will have to graduate from high school at the same rate as whites, achieve the same level of academic performance while in school, attend college, take degrees in the same disciplines as whites, and graduate at the same rates as white Americans.

Until the pool of workers is equally qualified, the economic measurements only reflect the underlying causes of economic disparity, and that is the failure of families, grade schools, and high schools to prepare their charges for participation in the working world and society as a whole.

Joe H. Heater

Palatine, Ill.

I teach kindergarten at a predominantly African-American elementary school ("How to narrow the great divide," Economics, July 14). Through a workshop, each child in my class received a newspaper each day. Even though the newspaper is considered middle-school material, I taught my 5-year-old students about the stock market, sports, how to look up the weather report, obituaries, etc. Their parents were excited about getting a free paper every day and were even more excited that their children were able to talk about the different articles.

Shann Comeaux

Scott, La. Option grants were a primary reason many companies went public that never should have -- and most are now in the dung heap where they belong ("Will stock options lose their sex appeal?" News: Analysis & Commentary, July 21, and "Microsoft (MSFT)'s bold new pay plan," Editorials, July 21). Has it ever occurred to people who join startups that they just may have to live off bread and water until the company shows a trend of real earnings to justify a public offering worth its salt? And venture capitalists may just have to wait it out, too. Most of them have no loyalty to the companies they fund early. They just want to game the system and bail out early.

The stock option game is over. Public investors will assure that. I would never buy into a stock if the company does not expense options. Not doing so tells me the managers don't just fudge: They cheat. And if they are duplicitous in this regard, of course they will push the envelope and try to use every accounting trick to pump up their revenues and earnings. It really makes long-term stock selection much easier.

Laurence C. Day

Agora Investment Management

St. Louis Procter & Gamble (PG) is a great company ("The P&G Revolution," Cover Story, July 7), but credit for the first disposable diaper goes to my father's employer, Johnson & Johnson (JNJ) which began developing a product called Chux in the 1930s and introduced it in 1950. My mother told me I made many contributions to the early product tests.

Tom Coates


You list Pert Plus in 1986 as the first shampoo-conditioner combination. Actually, the first combination product, Wash 'n Go, was sold by Noxell (now owned by P&G) in the mid-'70s. It was not successful, but shortly thereafter Revlon (REV) introduced the very successful Milk Plus 6, also a two-in-one product.

David C. Steinberg

Plainsboro, N.J.

Editor's note: P&G acknowledges that Johnson & Johnson as well as two other manufacturers did launch disposable diapers before Pampers but that the products didn't prove long-term successes. A P&G spokesman says: "We were the first to popularize the disposable diaper, successfully bring it to market, and successfully create the category." P&G says it has no knowledge of Noxell's launching a combination shampoo called Wash 'n Go before P&G bought Noxell in 1989. I was very surprised by the statement in "Can Siebel stop its slide?" (Information Technology, June 2) that Deutsche Leasing is unhappy with its Siebel Systems (SEBL) Inc. salesforce-automation system. That's not true. We have over 350 users. We have realized substantial economic benefit from the use of the Siebel CRM (customer relationship management) system. We have been able to increase our sales revenue by 6.8% using Siebel Sales. We have measured our user-acceptance levels with the Siebel system, and they are quite good.

Unlike many CRM projects, ours have been professionally managed and completed within acceptable time and budget constraints. Our project was presented at the CRM-Focus Event in Montreux 2003, and was chosen from the CRM-Expert-Circle in Germany as the one for their 2002 Yearbook.

Friedel Jonker

CRM-Business Director

Deutsche Leasing Bad Homburg, Germany

Editor's note: The story mischaracterized Jonker's opinion. While he mentioned a couple of problems with Siebel Systems software, overall Jonker is a satisfied customer.

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