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.