Letters.

The B2B Revolution

To the Editor:

The roundtable entitled "How Will EHubs Transform Your Business?" (CE: August '00) was interesting and timely because B2B trade is evolving very rapidly and causing a "revolution" to take place. At companies like Eastman Chemical, Enron, IBM, and Office Depot, online sales are growing much faster than offline sales and contributing to net income.

Douglas McCracken cited the key issue, which is the impact that B2B will have on supply chain efficiency and effectiveness. To positively affect the company's global business, a review must be made of how this tool can contribute to strengthening relationships with customers and vendors. What will be the added value to the purchasing, operating, and marketing functions of the company? What new strategies will be required in these areas? These issues should receive priority attention from most large and small companies and the software and service of the linkages are better left to capable, experienced outside vendors.

Roy Serpa

Texas Manufacturing Assistance Center 

Houston, TX

Fact or Fiction

To the Editor:

In your roundtable discussion "Are Companies Getting the Share Price They Deserve?" (CE: September '00), was delighted that the question came up whether the outlook in my book Dow 100,000: Fact or Fiction and another book Dow 36,000 might have some impact on the valuation parameters accorded today's companies. In response, Castle Harlan CEO John Castle points out that the thesis underlying Dow 36,000 is that the cost of capital associated with equities will become identical with government bonds, a possibility he characterizes as "a fairy tale." Unfortunately, this characterization was attributed to Dow 100,000, which makes no such claim.

Instead, I argue that historical forces now present are producing the possibility of a great prosperity that could carry the Dow to 100,000 by the year 2020. The end of the Cold War, the political imperative of the baby boomers, the technological revolution, the spread of freedom in the world, and competition coming to governments all point to improved tax, monetary, and trade policies, and the quick correction of errors in these policies when mistakes are made. During periods of falling tax rates, stable prices, and freer trade, the U.S. has experienced above-average economic growth and stock market returns. These are fundamental forces that every CEO should be tracking and anticipating. They are forming the economic and financial market context in which they will be executing their respective strategies to increase the stock price and market values of their firms.

Charles Kadlec

J. & W. Seligman & Co.

New York, NY