The press reports mentioning Vanguard just keep pouring in! Here are a few that may be of special interest.
WSJ-1: “Give me a B . . .” Monday, October 7, 2013. An impressive piece about the Bogleheads coming to visit to our campus. A capacity crowd of 209 Bogleheads joined us on October 16-18, representing a “fan club” that now includes 37,000(!) members.
WSJ-2: A Nobel for the Random Walk . . . Tuesday, October 15, 2013. This op-ed piece claimed that “one beneficiary of Mr. Fama’s insight [on the ‘Efficient Market Hypothesis’] was John Bogle.” Alas, wrong on two counts: (1) I have never accepted the EMH and don’t today. (2) It was Nobel Laureate Paul Samuelson who was the major inspiration for the creation of the first index fund. So . . .
WSJ-3: Eugene Fama and Efficient Financial Market Theory. Saturday, October 19, 2013. My “no-punches-pulled” response to that op-ed, reaffirming my own CMH (look it up!) and its supremacy. I quickly received an apologetic note from the author of the original piece, reading simply, “I blew it.”
WSJ-4: Should You Invest for the Fun of It? Saturday, October 19, 2013.A long piece of journalism, with numerous quotes from former Vanguard director Burton Malkiel and me. To sum up: “funny money” should amount to no more than 5% of your investments . . .
NYT-1: The Erosive Effect of Expenses . . . Wednesday,October 16, 2013. From a special Times section on WEALTH, some of my comments on why investors must consider not only the drag of fund expense ratios on their long-term investment returns, but also the “hidden” costs of fund portfolio transactions, cash drag, and sales loads and fees for distribution and advice.
M*01: Bogle, Buffett, Dad: Readers’ Top Investment Influences. Sunday,October 6, 2013. From Morningstar’s Christine Benz, yet another poll, this one citing the opinions of investors naming the individuals who’ve had the biggest influence on their investment philosophies. You’ll have to read this short piece to see who it was that edged out the great Buffett for the top spot.
MF-1: Investing Legend . . . Wednesday,October 2, 2013. A nice piece that honors Vanguard’s recent 39th birthday, and provides some welcome perspective on index funds, and on staying the course. “The trick to what I’ve done in investing is I don’t do anything. I look, and watch, and observe, and laugh.”
Whether we should wish it to or not, the spate of positive mentions of our firm and our philosophy seems unlikely to slow down. Phew!
To: Vanguard Veterans and Principals: Happy Birthday to Us!
September 24, 2013 marked the 39th anniversary of the birth of Vanguard, incorporated on September 24, 1974. We were tiny then, with only 28 crew members on board when we began operations in May 1975. The environment was difficult in those early days—we were suffering regular net cash outflows month after month. But we were all excited to be undertaking “The Vanguard Experiment” in a new model of mutual fund governance.
In this industry’s then-half-century of existence, the idea of a mutual mutual fund organization had never been tried before. Our formation was novel, contentious, and politicized, and in truth our continuing existence was in doubt. Few in the finance community noticed the new firm, and those who did belittled it.
But radical changes in finance were on the way. The creation of the world’s first index mutual fund (“Bogle’s Folly”) followed in short order, a direct result of our unique “at-cost” structure. Going “no-load” soon after and eliminating our entire broker-dealer distribution network was without precedent in the industry. The introduction of our novel defined-maturity bond fund strategy followed, changing almost overnight the bond fund landscape of the period. Other departures—less radical—followed in the years ahead.
It seems to me a long time ago when Vanguard began, but I still recall the trials and tribulations, the slings and the arrows, the successes and the profound disappointments, the hopes and fears that punctuated our nearly four-decade history. But it’s a treat to see that in recent weeks our astonishing acceptance in the marketplace continues to be celebrated in the media. I have attached just four recent examples:
1.Motley Fool“Father of the Index Fund,”commemorating Vanguard’s 39th anniversary and generously crediting Vanguard for “creating an entirely new way to invest.”
3.Morningstar Rekenthaler Report describing your founder as one “who entered 2008 as the mutual fund industry’s leading figure, whose position, five years later is that much stronger . . . his legacy, never in much doubt has now been totally cemented.”
4.The Wall Street Journal, September 14-15, 2013 “What We Learned From the Financial Crisis,” emphasizing the importance of “character” in investing. For whatever it may be worth, I was highly complimented to have this major story conclude with a paragraph citing words from a speech I gave almost 15 years ago (!): “To earn the highest returns that are realistically possible, you should invest with simplicity. Rely on the ordinary virtues that intelligent investors have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance. Call them ‘character.’ And in investing, over the long run, character will be rewarded.”
Please revel with me as we mark our 39th birthday and thank you all for your commitment to our long-standing mission of serving investors.
I’m sending along some of the press clippings that you may have missed during the dog days of summer, now rapidly coming to a close:
M/1. Bogle Weighs In On Key Issues. Morningstar’s summary of my extensive interview at the 25th Annual Morningstar Investment Conference. Responding to tough questions, I gave blunt—but, I hope, tactful—answers.
FA/1. Bogle Pressures SEC On Fund Firm Fiduciary Rule. A rare story from Fund Action on the work that I’ve been doing to persuade the SEC to deal with the (almost) industry-wide conflict between the interests of fund managers and the interests of fund shareowners.
HK/1. From Hong Kong, The Ten ___iest People On Wall Street. It may well be that Maria Bartiromo deserves to be ranked #1, but it’s a tad idiotic for me to be #6, especially compared to Tim Geithner (#7) and Jamie Dimon (#8), both of whom are three decades younger than I. (To avoid the possibility of violating company policy, I will not provide translation.)
These are interesting times. Be sure to enjoy them.
There have been so many press articles written about Vanguard, my new book, and my career that I don’t feel comfortable sending all of the stories to you. Instead, I’m attaching to this note six ofthe most prominent articles, and then posting the others on my eblog–In The Press.
2. Main Line Today, October 2012, “You Don’t Know Jack.” (But you will know him-a bit-after you read it.)
3. Inc., October, 2012, “The Finance Industry’s Only Living Saint.” (Over the top!)
4. Philadelphia Inquirer, December 9,2012. “Antidote to Market Mania: ‘Hold Tight.’ ” (Nice preview of Michael Smerconish’s Book Club gathering at Villanova last week. Full house.)
5. Research Magazine, October 2012. “How John Bogle Really Sees ETFs.” (More accurate than most characterizations of my views.)
6. Index Universe, September 28,2012. “The Clash of the Cultures .. . is the latest and perhaps best book by the … founder ofThe Vanguard Group.”
If that’s not, well, Enough for you, I have also posted the following on my eblog: “The Scourge of Speculation” (FIX Global); “Dim View of the Asset-Management Industry” (U S News and World Report); a comprehensive book review (Financial Analysts Journal); “Best Books for an Investing Novice,” (The Wall Street Journal,) selecting The Little Book of Common Sense Investing; “Forget Trading, Start Investing,” (Money-Life Show, Chuck Jaffe); “Fund Directors (Secret) Holdings” and “Bold Commitment and Personal Magic,” (Directors and Boards); “Bogle Walks the Talk,” (Corporate Board Member); “Bogle’s Lament for Investing’s Culture Clash,” (Toronto Globe and Mail); and-finally!-”Long Live Buy and Hold” (Investment Advisor).
You’ll enjoy the surprising Editor’s Note at the end of this final story, a nice way to end this huge compilation. The good news : there’s almost nothing left to be said!
Last Thursday, I was honored to be the recipient of the inaugural Humanitarian Award by the Lown Cardiovascular Research Center. It was a gala evening in Boston, before a packed house.
Dr. Lown, my cardiologist from 1967 through 1987, helped me to survive for two decades between my first heart attack in 1960 and my heart transplant in 1996. He is the inventor of the cardioverter (for shocking failed hearts back to life) as well as a winner of the Nobel Peace Prize in 1985. This citizen of the world, now 91, remains an articulate and passionate phrasemaker, as you’ll see from his remarks at the presentation of the award. I’ve also attached my words of response.
The evening was well supported by numerous mutual fund managers. GMO’s Jeremy Grantham was the keynote speaker and numerous (past and present) officials of Wellington Management, Granaham Management, and other fund advisers were in attendance.
I must repeat my usual disclaimer. I am reluctant (and more than a little embarrassed) to circulate commentaries like these on my long career, but well aware that if I don’t do so myself it won’t get done. But so many of you have expressed appreciation for these notes in the past that I’ll continue the practice. These attachments may help you to better understand the great struggle that was required to build Vanguard.
As one who wrote a book entitled Enough., I’m wondering whether my mission to serve investors hasn’t now gotten “enough” attention in this 60th year of my career.
I raise this (delightful) concern following the “JCB Legacy Day” celebration on Wall Street three weeks ago, for this morning I received a copy of the current issue of Journal of Indexes, devoted almost entirely to my work-”The Bogle Issue.”
It includes comments from a wide range of industry participants about my role in making the financial world-and especially the mutual fund world-a better place for investors. Particularly interesting are the kind comments of our own Gus Sauter and Burt Malkiel, and the analysis of Chris Philips in “The Case for Indexing.” (Thanks, group!)
I’m attaching just a few excerpts from the 64 pages(!) published in JOI, including the crossword puzzle (pretty exciting to have that!).
I’ll get some extra copies of “The Bogle Issue” for those who want to see more of it … though I expect that most of you will find these attachments “enough.”
Yesterday, a star-studded group of our nation’s investment leaders celebrated my 60th anniversary in the financial field. “The John C. Bogle Legacy Forum” took place at the Museum of American Finance on Wall Street, and I must tell you that this recognition delighted my soul (even as I was embarrassed that, despite my good intentions, my pride sometimes peeped out).
I’m pleased to attach a few items that you might enjoy:
You should know that I had to overcome my extreme reluctance to circulate this summary of a true “red-letter” day in my life and career. But there’s no other way to inform the many ofyou who care, and for that I am in your eternal debt.
Next Monday and Tuesday (and possibly Wednesday), CBS Evening News will present excerpts from a group interview yesterday on the problems facing America, our nation’s challenges and our hopes. The interview was conducted by new anchor Scott Pelley (moving over from “60 Minutes”). He did, I thought, a really outstanding job. I was honored to be part of the ten-person panel – a diverse group of citizens of various ages, genders, races, and backgrounds. If you happen to catch any of the shows, I’d be interested in your reaction.
Last Friday, Michael Smerconish wrote a generous column in The Philadelphia Inquirer, discussing my reaction to the “Occupy Wall Street” movement and its many aspects. In case you missed it, a copy is attached. (Not sure about being called a “patrician.”)
Virtually every day, I receive complimentary letters about Vanguard and my long career. I couldn’t possibly circulate all of them, but I just received a very special one. It comes from James Grant, publisher of Grant’s Interest Rate Observer and host of a well-attended and prestigious semi-annual forum for senior money managers. Their reaction to Jim’s interview with me was truly remarkable. He describes it in his lovely letter, also attached.
Thanks to you all for doing the exceptional work you do. Happily, much of it continues to reflect on me.
I’m attaching a copy of my speech to the NMS Investment Management Forum, presented to a packed house of some 400 endowment fund and pension fund officers in Washington, D.C., last Monday, September 12.
It includes a discussion of endowment fund investment policy; a comparison of endowment fund returns with the model index fund portfolio (50 percent stocks, 50 percent bonds) that I recommended 15 years ago in an essay for the Common Fund; and a forecast of future stock and bond returns. It also includes commentary about the risks involved in the greatly expanded use of alternative investments, now the dominant portion of endowment portfolios.
If these subjects interest you, I think you’ll enjoy the talk.
Note 1: On Monday September 19, I’ll be doing a full hour—from 1PM to 2PM—on CNBC’s “Power Lunch,” with Tyler Mathisen. We’ll be talking about current issues, including Vanguard’s growth and industry position, index funds, and today’s financial markets.
Note 2: The endowment fund speech, along with most of my other speeches, interviews, etc. have all been posted on my Bogle eblog—www.johncbogle.com.
I’m attaching a copy of a Wall Street Journal interview with me by Jason Zweig that appeared in the WSJ last Saturday, September 10. I think you’ll enjoy the perspective.
The interview arose from a request by the WSJ for a taped conversation with Jason Zweig for wsj.com. That interview took place last Wednesday and began to run over the weekend on the web.
I’m told it got the second highest number of “hits” (or whatever the right formulation is) in the WSJ website over the weekend. The first tape ran on Saturday and you might enjoy that too (warning: it runs about 20 minutes). If you have time, you might want to give it a glance.