I read your editorial "New Ways to Invest" (June 2001, p. 8) with much interest. I must say that at first glance, the data and conclusions that you cite were very impressive. However, after a little investigation, I realized that most of the hypothetical investment gain came from two stocks--Solectron and Artesyn. Both were 1991 Baldrige winners. The other winners, at least those that are publicly traded in some form, have generated a combined return of 67% over 10 years, significantly worse than the 163% return for the S&P 500. In fact, since 1991, Baldrige winners have been downright dogs in regard to stock price performance compared to the S&P 500.

I think that you are obligated to tell the other half of the story for your readers before people actually start investing their hard earned dollars in companies that try to win awards instead of focusing on their business.

Joe Bethoney

Editorial Reply:
It's true that Solectron and Artesyn were top performers in the fictional "Baldrige Index." However, according to data on the NIST Web site, four other companies in the Index also outperformed the S&P 500 during the study period: Federal Express, IBM, CitiGroup and Corning. Other companies didn't do so well. But as with any real world index or mutual fund, some stocks perform better than others. And the fact remains that an investment in all of the Baldrige Index companies in this study would have produced the indicated results. Readers can find the details of the Baldrige Index study for 2000 and the preceding years at www.quality.nist.gov/crit2.htm.