May 20, 2014
To Vanguard Principals and Veterans:
As you all must know by now, I regard recognition of Vanguard in The Economist as among the highest possible accolades. This cover story in the issue of May 3, 2014, entitled “Death of the Fund Manager” is one more testimonial to all the good we do here at Vanguard.
Attached are: (1) the opening editorial, “Cheap is Cheerful,” and (2) the main story, “Briefing: Fund Management. Will Invest for Food.” (Both pieces are informative and insightful. Too bad that the headlines fail to suggest that.)
Despite the accolades for index (“tracker” in the UK) funds, the authors seem unaware of the impact that indexing has already had on Vanguard and the fund industry. Ever irrepressible, I wrote a letter to the editor presenting the data. It’s probably too late and long to be published, but I’m sure you’ll enjoy it (Attachment 3).
We’ve come such a long way since we began in 1974. Thank you for all your help in making it happen.
To: Veterans and Principals
From: John C. Bogle
Date: May 1, 2014
A Remarkable Salute from Investors and CNBC
As many of you have already reported to me, CNBC has ranked me among the top ten people who have had “the most profound impact on business and finance” over the past quarter-century. (CNBC has just begun its second quarter-century.) In this context, I’m sending along two attachments.
1. “Index Mutual Fund Pioneer.” The CNBC profile of my long career is remarkably insightful, particularly in its recognition of the role of “Bogle’s evangelism.” They also identify the often-unrecognized link between Vanguard’s truly mutual structure and that first index fund.
However you may feel about the culture of stock market television, I’m actually deeply touched by being placed high (#9) on the CNBC list of “25 transformative leaders, icons, and rebels of the past quarter-century.”
NOTE: I’ve also included a link to the CNBC video on my career. It’s just three minutes in length, but professionally done and power-packed.
2. “The List: CNBC First 25.” Who are these other icons? Here’s the list, led (deservedly, I think) by #1 Steve Jobs and #2 Bill Gates. Interestingly, Warren Buffett (#6) and I (#9) are the only people from the field of investment management (also, in a limited way, Carl Icahn, #17) on this influential list, which includes at least eight leaders from abroad.
One of our crew members called an amusing point to my attention. I’m sandwiched between #8 Mark Zuckerberg (net worth, $28.5 billion) and #10 Larry Ellison (net worth, $48 billion). Last time I looked, I’m well below average (to say the least!) relative to these successful fellows.
* * *
Our organization structure and our index strategy represent the solid core of the reputation we have earned and the trust we have established with investors . . . and with the world. How good it feels to be recognized on the CNBC list of these 25 men and women who have been “the rebels, icons, and leaders in the vanguard (yes!) of that change,” from yesteryear’s era of business and finance to today’s.
Mr. Bogle spoke at the Community Forum Distinguished Lecture Series at the Bryn Mawr Presbyterian Church on April 28, 2014. Please enjoy the speech!
John C. Bogle will speak at the Bryn Mawr Presbyterian Church on Monday, April 28, at 7:30 p.m. Below is some additional detail about the event from bmpc.org.
Finance Icon John C. Bogle to Speak at Bryn Mawr Presbyterian Church
BRYN MAWR, Pa. (April 10, 2014) – As part of its Community Forum Distinguished Speaker Series, Bryn Mawr Presbyterian Church will host John C. Bogle, founder and former CEO of the Vanguard Group, Inc., on Monday, April 28, at 7:30 p.m. as he speaks on the topic of “Financial Reform: Investment Standards and Ethical Values.”
At Vanguard, Bogle pioneered low-cost index investing and no-load mutual funds. He is the author of ten books, including The Clash of the Cultures: Investment vs. Speculation and The Little Book of Common Sense Investing, and is currently president of Vanguard’s Bogle Financial Market Research Center.
In The Vanguard Experiment: John Bogle’s Quest to Transform the Mutual Fund Industry (1996), biographer Robert Slater describes the life of John Bogle as “evolutionary, iconoclastic and uncompromisingly committed to his founding principles of putting the interests of the investor first and constructively criticizing the fund industry for practices that run counter to low-cost, client-oriented mutual fund investing.” Bogle questions, among other issues, current practices in executive compensation, political donations, and marketing expenditures.
This free event will be held in the church Sanctuary and is open to the public. Reservations are not necessary. For more information, visit www.bmpc.org or call 610–525-2821.
About Bryn Mawr Presbyterian Church
Bryn Mawr Presbyterian Church (BMPC), located at 625 Montgomery Avenue, Bryn Mawr, Pa., was first organized by 16 men and women in 1873, and today serves as a Christian community of more than 2,500 members of all ages. Known for its open-minded and inclusive theology, the church provides opportunities to connect with God’s word in Sunday worship services, Sunday school, adult education classes, youth activities, confirmation class, fine arts or music, interest groups, and community service/outreach activities, and serves as a place to gather, learn, and serve God. For more information about Bryn Mawr Presbyterian Church, please call 610–525-2821 or visit www.bmpc.org.
Donna Barrickman, Communications Director
610–525-2821, ext. 8809
A high-resolution photo of John C. Bogle is available here. (To save the photo, right click and select “Save Image As”)
To: Veterans and Principals
From: John C. Bogle
Date: April 15, 2014
Re: More Recognition for Our Firm, Part II
This follow-up note to my mailing of April 10 includes five more recent articles from the press:
1) “Vanguard Founder Discusses How to Invest.” This interview in Investor’s Business Daily was published on April 2. While several of the quotes are a bit casual (if not mystifying!), the overall tone of the story is highly positive.
2) “Michael Lewis is Wrong About Rigged Markets.” Jonathan Berr’s April 3 story in Moneywatch is yet one more contribution(?) to the huge publicity campaign that kicked-off Flash Boys. While I didn’t have the benefit of knowing the opinion of later commentators, my position is not much different from those of Burton Malkiel, Arthur Levitt, Morningstar’s John Rekenthaler, and other thought leaders.
3) “On Smart Beta, Smart Skeptics.” James Green’s thoughtful story in Investment Advisor magazine (March 31, 2014). Of course, my response is blunt—smart beta is a “marketing gimmick.” Might as well be honest!
4) “Vanguard Beats BlackRock . . .” Christopher Condon’s article in Bloomberg Business Week (April 1, 2014) is one more long, well, “commercial” for our firm, its mission, and the work we all do. It is surely a rare quarter when we capture 90%(!) of all ETF cash flows as we did in the three months ended March 31, 2014, but of course there’s a message there.
5) “The Inevitable Standard.” Investment News, April 7, 2014. The “Inevitable Standard” cited in Mark Schoeff Jr.’s perceptive story is a federal standard of fiduciary duty—something I’ve been seeking for many years. I’m certain that my dream will come true . . . some day.
Keep fighting the good fight!
To: Veterans and Principals
From: John C. Bogle
Date: April 10, 2014
Re: More Recognition for Our Firm
The spate of attention focused on Vanguard that took me three consecutive mailings to send you (on March 4, March 5, and March 6, 2014) subsided. But, surprisingly, it resumed about 10 days ago, although this note requires only two mailings. This is the first such mailing; the second will be circulated on Tuesday, April 15.
1) “The Inspiration for John Bogle’s Great Invention.” On March 5, The Wall Street Journal’s MarketWatch began a series called “Things Written Long Ago That I Wish I Had Read Long Ago.” The first essay in the series was columnist George Sisti’s piece on Paul Samuelson’s essay, “Challenge to Judgment,” published in the very first issue of The Journal of Portfolio Management in 1974. As many of you know, it was this essay that helped inspire the creation of the world’s first index mutual fund. To this day, I remember in considerable detail this remarkable piece, and the credibility that this brilliant Nobel Laureate brought to my forthcoming creation.
2) “You Don’t Know Jack: The Education of Jack Bogle.” On April 4, the Philadelphia Business Journal published this lengthy interview, focused on Vanguard’s history and my long career. Perhaps I was a bit too honest in responding to the final question, but that kind of candor is a small price to pay for the credibility that Vanguard has established with the press and the public.
3) “Bogle: Tilt To Corporates for More Yield.” Olly Ludwig, financial editor of ETF.com (formerly IndexUniverse.com, not, for me, a happy change!) covers a wide range of issues relating to Vanguard and the fund industry. Some of the numbers are a bit garbled, but you’ll get the point. Despite another bit of controversy, stories don’t get much more positive for our firm than this one.
Happy reading! More to come.