Weinberg Center for Corporate Governance Conference at the University of Delaware
Mike - Oct 12, 2016

“How the Financial System Fails Investors and How to Fix It From a Structural and Governance Perspective”

Tuesday, November 1, 2016 at 9:30am to 12:00pm

Center for the Arts, Gore Recital Hall 110 Orchard Road, University of Delaware, Newark, DE 19711, USA

Financial/investing institutions form the bedrock of the U.S. economic system. Without them, the economy can’t grow and our capitalistic system would grind to a halt. However, few believe that our financial/investing institutions work as well as they could. Critics argue that misalignments promote the interests of the financial sector itself above those of society, the real economy and the individual citizen investors whose pensions and savings are entrusted to these institutions. They argue that errant expertise and incentives; gaps in accountability, transparency and governance; poor regulation and a misreading of economics combine to impose a huge stealth tax on individual savings and national economic promise. Further, they say that these structural and governance misalignments create systemic pressure for short-termism in the boardroom and within investing institutions.

Stephen Davis and Jon Lukomnik, two of the three authors of What They Do With Your Money: How the Financial System Fails Us and How to Fix It, will be joined by John Bogle, legendary founder of Vanguard, and Jennifer Taub, Professor of Law, Vermont Law School, for a robust, provocative discussion of how to fix our financial/investing institutions so that they serve individual citizen investors and the real economy.

Among the issues that will be discussed are: How have short-term oriented capital markets, the scores of financial intermediaries, and executive compensation structures both in financial/investing institutions and in our corporations combined to reduce long-term corporate investment in America? What are the consequences of governance gaps in investing institutions? What about the governance structures of pension plans and their plan sponsors? Should there be a shift in the governance paradigm to give individual citizen investors more transparency and more of a voice?

The discussion will also showcase potential solutions that range from the narrow and technical, such as potential revisions to the tax law, to the big and ambitious, such as fresh models of governance and transparency for financial/investing institutions and for pension/savings plans.

Please join us for a fascinating discussion peering behind the curtain of finance to understand why the capital market works the way it does. And how it can potentially change for the better.

A complimentary lunch will follow the program.

Click here for more information and to register for the event.

Vanguard in the News
Mike - Oct 12, 2016

Vanguard’s recognition in the press continues unabated. Here are some more recent press clippings.

Vanguard’s John Bogle: Ready or Not, an Expanded Fiduciary Rule Is Coming,” Investment News, September 15, 2016. I wrote this op-ed for Investment News in support of the Department of Labor’s recent establishment of a fiduciary standard for all advisers and brokers who advise clients on retirement accounts. My conclusion: “It is in the enlightened self-interest of the distributors, advisers, and brokers for mutual funds to place the interests of investors first. But even if an expanded federal fiduciary standard fails to accomplish this goal, our mutual fund shareholder/clients will ultimately compel this outcome.”

How Vanguard’s Decision to Forgo Profit has Paid Off for Investors,” Washington Post, September 15, 2016. Allan Sloan, former senior editor at Fortune, wrote this column about how Vanguard’s unique, client-owned structure has been incredibly successful both for Vanguard and our clients. Allan observed, “The idea that forgoing profit can be good business is an important lesson that we should all take from the recent celebration of the 40th anniversary of the Aug. 31, 1976, launch of what is now known as the Vanguard 500 Index Fund.” He went on to quote me speaking about the earnings generated by corporate America, “It’s a question of allocating those profits to Main Street rather than to Wall Street. [Our] profits go to the funds’ investors, not to the managers.” [1]

Jack Bogle: Admitting a Mistake Makes You Look Better,” CNBC, September 14, 2016. In the wake of the recent scandal at Wells Fargo, Elizabeth MacBride wrote this article about my belief that trying to cover up a mistake to avoid accountability almost always backfires, while being honest and open about it usually improves your credibility and helps you ultimately move beyond the problem. To be clear, I have refrained from commenting on the ghastly mess that Wells Fargo is now facing up to. My interview with Ms. MacBride took place over two years ago, and she found it relevant to the current situation at Wells Fargo.

They All have One Thing in Common,” The Irrelevant Investor, October 4, 2016. Michael Batnick from Ritholtz Wealth Management wrote this blog post that points out one thing I have in common with the acclaimed investors Seth Klarman, Howard Marks, Warren Buffett, and Phil Fisher: “their ability to clearly communicate their philosophy.” Michael generously appraised one of my books: “His most recent book, Clash of the Cultures, which details how companies went from an investment business to a marketing business, is an excellent read.”

“Fund Legend Still Fighting for Investors,” Kiplinger’s, October 2016. In this interview published in Kiplinger’s, I talk about my 65th anniversary in the mutual fund industry, reasonable expectations for stock and bond returns in the coming years, and the DOL fiduciary rule, among other topics.

Crain 100: 100 Innovators, Disruptors and Change-Makers in Business,” October 2016. Crain Communications celebrated their 100th anniversary in the publishing industry with the “Crain 100” supplement, which recognizes 100 leaders in the industries covered by Crain’s various publications. I am honored to appear right next to Warren Buffett, as you’ll see in the attachment.



[1] The photograph in this story was actually taken, not in 1997, but in 1983. The person on the far right is Jerald L. (“Jerry”) Stevens, who served as president of Vanguard during 1982-1984. It’s a long story, ending with Jerry’s death two years ago at age 73.

Bogleheads XV
Mike - Oct 07, 2016

The Bogleheads held their fifteenth annual celebration of Vanguard’s investment principles on September 28-30. Some 250 of Vanguard’s most loyal and enthusiastic clients heard impressive presentations from the likes of Gus Sauter, Bill Bernstein, Chris McIsaac, Greg Davis, Joe Brennan, John Ameriks, Maria Bruno, and Joel Dickson. My own three parts of the program consumed a total of about 6 hours over the course of two days! My remarks included some 56 slides. If you’re interested, you can find the slides on my website. Here is some of the media coverage of the 2016 Bogleheads conference.

“Meet the Ordinary People Vanguard’s Jack Bogle Made Rich”; “Jack Bogle on the Retirement Crisis, Wells Fargo’s Crackup, and ‘Hamilton’”; “The Case Against ETFs”; and “What Will the Market Bring in 2017? Vanguard’s Best Guesses,” The Street. Nora Morrison from Jim Cramer’s The Street website wrote four articles summarizing my comments as well as those from some of the other speakers at the conference.

Jack Bogle Sounds Off: 10 Provocative New Pronouncements from the Legendary Founder of Vanguard,” and “A Retirement Crisis? There Are Actually Three, Says Vanguard Founder Jack Bogle,” Money. Karen Damato, formerly of the Wall Street Journal, was in attendance and wrote these summaries of my comments at the conference. (NOTE: The term “financial buccaneers” applied not to ETFs as a group, but to those “fringe ETFs” that are designed for speculators.)

What Bogle’s 10-Year Stock Forecast Means for Muni Bond Holders,” Financial Planning. Financial advisor and author Allan Roth, who was also one of the speakers at the conference, wrote this piece about the potential impact lower future returns could have on the municipal bond market.




WSJ Weekend Interview
Mike - Sep 06, 2016

Jack was featured in the Wall Street Journal Weekend Interview on September 4, 2016.



The 40th Anniversary of the Index Mutual Fund
Mike - Aug 31, 2016

To: Vanguard Veterans and Principals
From: John C. Bogle
Date: August 31, 2016
Re: 40th Anniversary of the Index Mutual Fund

Hi, All,
Today, as you may well know, is the 40th anniversary of the first index mutual fund—now Vanguard 500 Index Fund. There has been reasonably good press coverage of the event (none of which was solicited by me). I attach four of the major stories about the anniversary that have been published today.

1. “Birth of the Index Mutual Fund: ‘Bogle’s Folly’ Turns 40,” The Wall Street Journal.
2. “Guess Who Just Turned 40 and Is Worth $3.6 Trillion?” Bloomberg.
3. “The First S&P 500 Index Fund Turns 40 Years Old Today,” Benzinga.
4. “A Salute to John Bogle, A Real F—— People’s Hero,” The Concourse.*

I’m enjoying this moment, and I hope you are too.


*Since Vanguard is a family company, I’ve bowdlerized this article.

John Bogle’s 65th Anniversary Speech
Mike - Jul 14, 2016

A speech by John Bogle, marking his 65th anniversary in the mutual fund industry.

A Memo from Jack Bogle
Mike - Jun 17, 2016

To:       Vanguard Veterans and Principals

From:   John C. Bogle

Date:    June 17, 2016

Re:        Vanguard in the News

Hi, All,

Vanguard continues to be mentioned frequently in the news. Here are some recent clippings.

  1. “Index We Trust,” The Economist, June 11-17, 2016. A nice profile of Vanguard in The Economist, highlighting our success in both the marketplace and in bringing down the costs of investing for our clients. An unnamed competitor summarized the situation well by saying, “How are we supposed to compete when there’s a non-profit disrupting the game?” Vanguard is well-positioned to continue disrupting the industry, and I suspect few will truly want to compete with us on costs. (Today, only Fidelity and BlackRock do, and only with their index funds.)
  2. “Vanguard Founder Jack Bogle Talks about Taxes, Investing, and the Election,” Forbes, June 15, 2016. I recently spoke with Forbes about the 2016 presidential election and its implications for the markets. I stand by my claim that this election cycle is “the most chaotic in recent memory.”
  3. “For John Bogle, Wall Street Is the Problem, Not Stocks,” Market Watch, June 16, 2016. Mitch Tuchman picked up on my recent letter to the editor of the Wall Street Journal and my interview with John Waggoner. (You received both pieces in my previous mailing.) Tuchman highlights my emphasis on low costs and transparency, as well as my criticism that much of the activity on Wall Street involves trading securities back and forth—with Wall Street taking a cut of each trade—rather than capital formation, its true raison d’être.
  4. “Bogle Says Prepare for Stocks, Bonds to Miss Historical Returns,” Bloomberg, June 15, 2016. I recently appeared on Bloomberg Radio and reiterated my belief that it is highly likely that returns on stocks and bonds during the coming decade will be significantly less generous than they have been in the past.




Common Cause: 2016 Building a Better Democracy Awards
Mike - Apr 27, 2016

Jack will be honored by Common Cause at the 2016 Building a Better Democracy Awards.


2016 Building a Better Democracy Awards

Date: Tuesday, June 7, 2016

Time: 5:30 PM – 7:30 PM

Location: Pyramid Club

Please join us for a reception honoring two extraordinary individuals — John Bogle, founder of The Vanguard Group, and Terry Mutchler, the first executive director of the PA Office of Open Records.

Bogle created what is now the biggest mutual fund company in the world by promoting transparency and the best interests of his investors. For decades he has been a prominent voice for broad reform in the investment community and across corporate America.

Mutchler’s leadership implementing Pennsylvania’s new public records law has opened up state and local governments to unprecedented public scrutiny, providing citizens more information.


Click Here to Purchase Tickets

Memo to Veterans and Principals
Mike - Dec 08, 2015

To: Veterans and Principals
From: John C. Bogle
Re: Vanguard in the News
Date: December 3, 2015

Hi All,

Favorable press coverage of our firm seems to be growing just as rapidly as our cash flow. (Well, maybe not quite as fast!) I’m attaching five of the more important news stories with this note.

1. “Vanguard’s Gain is Wall Street’s Pain.” Bloomberg Business, December 1, 2015. I urge all of you to read this remarkably perceptive article by veteran journalist Eric Balchunas. It discusses the often taboo subject of our impact on the entire field of investment, estimating that by 2020 we will have reduced Wall Street’s revenues by $40 billion per year. (Actually, that figure is underestimated.)

2. “The George Washington of Investing Wants You For The Revolution.” NPR’s Chris Arnold wrote this story in connection with his radio segment about me for NPR’s Morning Edition, which you can listen to here. Chris wrote a companion piece about asset allocation, with suggestions from David Swensen, me, and Gretchen Tai of Hewlett-Packard.

3. “John Bogle’s legacy: Falling prices everywhere.” On November 19, 2015, Mitch Tuchman of MarketWatch again refers to “the Vanguard Effect”—the impact of our low pricing strategy on our peers. He concludes: “If better, cheaper advice along with falling prices for funds in a race to the bottom, bring it on!”

4. “The best strategy for everyday investors, according to investing legend Jack Bogle.” In Business Insider, on November 3, 2015, Kathleen Elkins concludes: “Set yourself up for financial success by investing in low-cost index funds.”

5. “Cost Always Matter, So Pick This Winning Read.” Financial adviser Nick Train, writing in FT Adviser on October 29, 2015, quotes at length from the recently published “Classic Edition” of John Bogle on Investing—The First 50 Years. (Curiously, he doesn’t get around to mentioning the name of the book.) He shares my view that “picking winners is a loser’s game.”

Please enjoy this continuing stream of affirmation for the work we do—you and I alike—to serve investors with excellence.


Memo to Veterans and Principals
Mike - Dec 08, 2015

To: Veterans and Principals
From: John C. Bogle
Date: November 23, 2015
Re: “Distinguished Service to Humanity”

Last Thursday evening, November 19, I was honored by the National Academy of Social Sciences with their Gold Medal for Distinguished Service to Humanity. (They’ve been awarding these medals for 101 years.)

The award was based (as the attached dinner announcement states) on my “invention of the first index mutual fund.” I prepared my remarks well before the day of the dinner, and edited them to meet the time constraints of such events.

Nonetheless, I’ve had my talk reprinted in its entirety. I’m guessing that many of you will be interested in the creation of Vanguard, which quickly led to the creation of the world’s first index mutual fund.


Happy Thanksgiving to all of you. We at Vanguard have so much to be thankful for!


John C. Bogle’s remarks upon accepting the Gold Medal for Distinguished Service to Humanity from the National Academy of Social Sciences.