10 Questions for John Bogle

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WishingWealth
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Post by WishingWealth » 06 Nov 2008 00:16

He (Bogle) must be fed up answering all those questions.
At MarketWatch: http://tinyurl.com/67ubhs
Stick to the plan
Commentary: Vanguard founder Bogle urges simple approach to investing
...
As such, he issued a warning:
"If the consequences are that one more drop in the stock market is going to wipe you out, you must get out of the stock market," Bogle said. "I don't recommend it, but if that's what happens and the consequences to you are that dire, what am I supposed to say, 'Stay in and accept my probabilities?' Not me, pal."
But his message to investors was clear: If you didn't have the foresight to see this decline coming, waiting to the point of maximum pain to bail out is simply proving his point that investors need to be ready to commit to the stock market with "no peeking."
Not looking at a portfolio's swings, Bogle said, allows an investor to ignore daily, weekly and monthly fluctuations.
At the time when Bogle changed his asset allocation, his worry wasn't that the stock market would crater -- though it did -- it was that his allocation was inappropriate for his age.
...
WW

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Post by Peculiar_Investor » 07 Jan 2009 23:29

Not sure if this is the most appropriate placing for this, but it is from John Bogle, Six Lessons for Investors, Be diversified and don't assume past performance will continue.
John C. Bogle wrote:There is almost no limit to the ability of investors to ignore the lessons of the past. This cost them dearly last year. Here are six of the most important of these lessons
You'll have to follow the link to be schooled by John, but it is worth the time spent IMHO.
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Post by Serdic » 16 Jan 2009 18:23

Bogle on Minnesota Public Radio: When enough is enough

50 minute Q&A with Bogle.

edit - or I could have read Bylo's webpage 2 days before I posted this. :P
End Transmission.

WishingWealth
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Post by WishingWealth » 04 Feb 2009 18:26

I came across those Bogle articles while looking for something else.

pdf in Financial Analysts Journal

Markets in Crisis
http://tinyurl.com/bc87xu

and

Black Monday and Black Swans
http://www.cfapubs.org/doi/pdf/10.2469/faj.v64.n2.9

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Post by adrian2 » 25 Feb 2009 06:33

Via prefblog, a debatable idea from Bogle:
Bloomberg wrote:John Bogle, founder of fund manager Vanguard Group, echoed Miller in his testimony before the committee, saying, “the 401(k) plan is an idea whose time has come” yet “our existing defined contribution system is failing investors” because of high fees, low levels of saving, excess flexibility that permits cashing out and too much borrowing and inappropriate asset allocation. Bogle recommended a single defined contribution plan with annuities from low-cost providers. The single system would be overseen by an independent Federal Retirement Board to protect the interests of plan participants, Bogle said.

Retirement savings are too exposed to market risk, according to Dean Baker, co-director of the Center for Economic and Policy Research in Washington and another witness at today’s hearing. Baker proposed a government-managed system that would provide a modest rate of return for employees. He said it would build on Social Security and allow workers a voluntary default contribution of at least 3 percent of their salaries.

Employees must work longer to extend retirement savings and Social Security, which “has shined during this crisis,” could be stabilized and supplemented by target-date funds, said Munnell. Target-date funds shift money into more conservative investments as an investor approaches retirement.

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Post by MFlo » 25 Feb 2009 14:49

Bogle is no different than other pundits on the boob tube.

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Post by adrian2 » 25 Feb 2009 16:02

MFlo wrote:Bogle is no different than other pundits on the boob tube.
Sure, Mr. Handler.

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Post by Doug » 26 Feb 2009 10:15

Investing advice from Jack Bogle:

http://www.washingtonpost.com/....03110.html

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Post by Bylo Selhi » 26 Feb 2009 10:28

Doug wrote:Investing advice from Jack Bogle:

http://www.washingtonpost.com/....03110.html
Try this link.

And also from Gus Sauter: Avoid Irrational Exuberance With Alternatives
Gus Sauter is Vanguard Group's chief investment officer. He started at the funds giant in October 1987, two weeks before global markets crashed.

In that environment, Sauter took over as head of Vanguard's quantitative equities group, which at the time consisted of only index mutual funds. Since then, the unit has expanded to include a combination of passive and active quantitative strategies. Six years ago, Sauter assumed the company's CIO duties as well.

On Wednesday, IndexUniverse.com's Managing Editor Murray Coleman caught up with the busy Vanguard executive to discuss current market conditions and trends he's watching such as the upcoming launch of the Vanguard FTSE All-World ex-US Small-Cap Index Fund.
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Post by George$ » 12 Apr 2009 08:00

Gretchen Morgenstern in today's New York Times
He Doesn’t Let Money Managers Off the Hook
EVERY once in a while, if only for sanity’s sake, it is wise to leave our bankrupt era behind and seek out a bit of wisdom from a moral authority. It’s a challenging exercise, given that so many formerly stellar reputations are now shipwrecked and that all those once-smart guys and gals have been reduced to bull-market geniuses.
....
In the face of all this, Mr. Bogle suggests that we force our agents to relearn what being a fiduciary means. A fiduciary, these managers seem to have forgotten, acts for the sole benefit and interest of another. We need to replace the agency society with a fiduciary society, he argues.

And more on Bogle in Business Week
Jack Bogle's Last Crusade?
The mutual fund pioneer is pushing for an overhaul of the retirement-savings system
Bogle's latest mission may be his most ambitious yet: to persuade regulators to overhaul the U.S. retirement-savings system by simplifying account options, clamping down on fees, and making risk more understandable. It also might be his last. Bogle tells BusinessWeek his body has started to reject his 13-year-old transplanted heart. The attack, which began last summer, has landed him in the hospital on four separate occasions. Not that he's looking for sympathy. "I'm not introspective about my health, nor do I live in fear of dying," he says. "Your life expectancy is not enormous when you're 80."
“The search for truth is more precious than its possession.” Albert Einstein

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Post by Taggart » 12 Apr 2009 08:54

George posted a link to Bogle above. There is another link from the same source. In it there's a statement that perplexes me, and has for the last couple of days when I first read the article.

Investment Advice from Jack Bogle

In it he states:

"The past century of data show that American businesses have grown at an annual rate of about 9.5%, with 4.5% from dividend yields and the remaining 5% from earnings growth."

-------------------------------------

What puzzles me is where did he get his data from? It looks like nominal returns, but when I look at long term "real returns" from Arnott and also from Dimson, et al, most of the returns calculated show a majority of their returns come from the dividend yield and the re-investment of dividends, while capital gains play a much smaller role. Anyhow, I'm stumped but I'm still working on it.

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Post by parvus » 12 Apr 2009 20:51

I suspect that he meant "earnings growth" captured by reinvesting the dividends. But it was an abbreviated interview, and so thoughts get abbreviated too.
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Post by bender » 12 Apr 2009 21:07

Is the quote referring to the Gordon equation

return = div + div growth
= div + inflation + real div growth
= 4.5 (historical) + 3 + 2 = 9.5%

Compound away...

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Post by Bylo Selhi » 15 Apr 2009 08:39

Jack Bogle's Last Crusade?
Bogle's latest mission may be his most ambitious yet: to persuade regulators to overhaul the U.S. retirement-savings system by simplifying account options, clamping down on fees, and making risk more understandable. It also might be his last. Bogle tells BusinessWeek his body has started to reject his 13-year-old transplanted heart. The attack, which began last summer, has landed him in the hospital on four separate occasions. Not that he's looking for sympathy. "I'm not introspective about my health, nor do I live in fear of dying," he says. "Your life expectancy is not enormous when you're 80."...
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Post by parvus » 21 Apr 2009 18:44

adrian2 wrote:Via prefblog, a debatable idea from Bogle:
Bloomberg wrote:John Bogle, founder of fund manager Vanguard Group, echoed Miller in his testimony before the committee, saying, “the 401(k) plan is an idea whose time has come” yet “our existing defined contribution system is failing investors” because of high fees, low levels of saving, excess flexibility that permits cashing out and too much borrowing and inappropriate asset allocation. Bogle recommended a single defined contribution plan with annuities from low-cost providers. The single system would be overseen by an independent Federal Retirement Board to protect the interests of plan participants, Bogle said.

Retirement savings are too exposed to market risk, according to Dean Baker, co-director of the Center for Economic and Policy Research in Washington and another witness at today’s hearing. Baker proposed a government-managed system that would provide a modest rate of return for employees. He said it would build on Social Security and allow workers a voluntary default contribution of at least 3 percent of their salaries.

Employees must work longer to extend retirement savings and Social Security, which “has shined during this crisis,” could be stabilized and supplemented by target-date funds, said Munnell. Target-date funds shift money into more conservative investments as an investor approaches retirement.
Arms-length, opt-out, supplementary pension schemes have, over the past year, rather quickly become the consensus default, it seems.

As has another Bogle take on greed:
A Crisis of Ethic Proportions
We must establish a 'fiduciary society.'
Commerce, business and finance have hardly been exempt from this trend. Relying on Adam Smith's "invisible hand," through which our self-interest advances the interests of society, we have depended on the marketplace and competition to create prosperity and well-being.

But self-interest got out of hand. It created a bottom-line society in which success is measured in monetary terms. Dollars became the coin of the new realm. Unchecked market forces overwhelmed traditional standards of professional conduct, developed over centuries.

The result is a shift from moral absolutism to moral relativism. We've moved from a society in which "there are some things that one simply does not do" to one in which "if everyone else is doing it, I can too." Business ethics and professional standards were lost in the shuffle.

The driving force of any profession includes not only the special knowledge, skills and standards that it demands, but the duty to serve responsibly, selflessly and wisely, and to establish an inherently ethical relationship between professionals and society. The old notion of trusting and being trusted -- which once was not only the accepted standard of business conduct but the key to success -- came to be seen as a quaint relic of an era long gone.

The proximate causes of the crisis are usually said to be easy credit, bankers' cavalier attitudes toward risk, "securitization" (which severed the traditional link between borrower and lender), the extraordinary leverage built into the financial system by complex derivatives, and the failure of our regulators to do their job.

But the larger cause was our failure to recognize the sea change in the nature of capitalism that was occurring right before our eyes. That change was the growth of giant business corporations and giant financial institutions controlled not by their owners in the "ownership society" of yore, but by agents of the owners, which created an "agency society."
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Post by Bylo Selhi » 21 Apr 2009 19:27

parvus wrote:
Bloomberg wrote:Bogle recommended a single defined contribution plan with annuities from low-cost providers. The single system would be overseen by an independent Federal Retirement Board to protect the interests of plan participants, Bogle said.
Arms-length, opt-out, supplementary pension schemes have, over the past year, rather quickly become the consensus default, it seems.
I believe Bogle has advocated something like this for many years, largely in reaction to the high fees retail investors otherwise have to pay (except at Vanguard, of course) and their general inability to DIY through thick and thin.
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Post by parvus » 21 Apr 2009 21:42

I listened to a 40-year member of the U.S. actuarial profession this morning talking more about stakeholder conflicts than default 401(k)s. It seems plans offered by large firms are working well enough, but small business and self-employed types don't save enough, so the solution is probably higher payouts from Social Security.

Ah well. Then Ambachtsheer offered his take on a Canada Supplementary Pension Plan.

It amazes me, sometimes, how indecisive some Murricans are. :shock:
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Post by DenisD » 21 Nov 2009 23:49

Taylor Larimore wrote:Hi Bogleheads:

Our mentor, Jack Bogle, has "updated" his original Common Sense on Mutual Funds written 10 years ago. This is really two books in one: The original book and the updated version with add-on's to his many charts, plus Jack's numerous and often lengthy analysis about his earlier advice; how it has, or has not, held up; and the valuable lessons we can learn.

You can read excerpts from his first bookHERE. The excerpts below, are all new:
http://www.bogleheads.org/forum/viewtopic.php?t=46036

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Post by Bylo Selhi » 22 Nov 2009 09:15

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Post by George$ » 22 Nov 2009 10:48

Bylo Selhi wrote:Attention Christmas shoppers ;) Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition
I've received my copy from Amazon - now to find time to read it :(

It looks like a fine printing and publication - unlike many pot boiler el cheapos these days - and at 600+ pages quite a bargain (in my view) at the $22.65C price.
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Re: 10 Questions for John Bogle

Post by Bylo Selhi » 20 Feb 2010 08:59

Original Sin on Wall Street
What makes a study of history and the Classics so important for business? "It involves critical thinking," Bogle explained. "It involves some kind of perspective, it involves some ability to think 'you know, this has happened before and it could be happening again now.' It would certainly shun the argument that this time is different when the stock market goes to an all-time high...

"Yes," answered Bogle. "And there you have it. Original sin in the financial markets." He paused. "Somebody ought to spend a little time thinking," he said, " and this gets back to the classics, about the role of business in society. It should add value. But the financial business does not add value. By definition the financial business subtracts value. In round numbers, it takes something like $600 billion out of the pockets of investors every year.
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Re: 10 Questions for John Bogle

Post by Bylo Selhi » 22 Feb 2010 08:59

Vanguard's Bogle on Bankers, Buffett, Obama
Q: Who makes sense to you on Wall Street? Whom should people be listening to for the next decade?
Bogle: The first two are obvious. Warren Buffett is the pillar of integrity. He does things right. And while he does not index, he believes passionately in indexing and talks about it all the time. And the other is Paul Volcker. Now these are older guys, but they are speaking from positions of total independence and integrity and with no vested interests.

I'm also a great admirer of Bill Gross. He may not always be right, and they tend to take some unusual risks out there. But they have paid off. My hat is off to Bill Gross for the job he's done on fixed-income management.

In the political scene, there is one giant that stands head and shoulders over everyone else and that's our president, Barack Obama. He is trying to rise above the chaotic fray in Washington. We have a stalemate in Washington and not much is going to be done that needs to be done. So can he summon his character, his articulation, his integrity to rise above the political fray in Washington? We will see. But I don't believe he has a rival anywhere who could be president besides him. And I'm a Republican, actually.
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Re: 10 Questions for John Bogle

Post by Peculiar_Investor » 09 Apr 2010 16:28

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Re: 10 Questions for John Bogle

Post by Bylo Selhi » 13 Apr 2010 09:08

The Warrior
Vanguard’s Jack Bogle helped create the American mutual fund industry. Now, in the climactic battle of his life, he’s railing against it — and trying to revolutionize it once and for all.

Jack Bogle could be on a beach somewhere. The 80-year-old founder of mutual fund giant the Vanguard Group could be with his wife, Eve, soaking up the sun at a Caribbean resort and enjoying the fruits of a lifetime of hard work with a frothy drink in one hand and a bottle of sunscreen in the other. In fact, he could own that resort, probably a whole chain of them, and still have enough left over to exceed the annual gross domestic product of many small countries.

Jack Bogle could’ve been a billionaire — but that’s not who Jack Bogle is...
and
Bill Bernstein wrote:The plain fact of the matter is that the very structure of the modern financial system is corrupt to the core, extracting wealth from the nation’s ordinary people and placing it in the hands of a very few, and Jack has spent the better part of his life exposing these inequities. This has not made him a lot of friends in the business.
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Re: 10 Questions for John Bogle

Post by Bylo Selhi » 06 Nov 2010 10:27

[Original FT paywall link: ‘I’m trying to work shorter days’.] Via Google's back door: ‘I’m trying to work shorter days’
What is the secret of your success?

I think life is much more about the journey than the destination, and, to me, success implies that
you’ve reached a destination and that your journey is complete. I’m not one to ever view my journey as complete.

That said, you need to have a bit of determination to get anywhere in life. We have a family motto: “Press on regardless.” By regardless I mean through tough times and easy times. You press on, no matter how things are going.

What is your basic business philosophy?

Two things. Number one, always put your clients first. You are a trustee of their money, and you
serve the client before you serve yourself.

Second, be mathematically correct, because if you have the maths on your side you will win. We all know that if the stock market delivers a 7 per cent gross return on your investment, an investor’s net return will be lower by the amount of the costs they incur. The average investor will lose 2.5 per cent to the Wall Street croupiers, who rake off their commissions, fees and administrative charges.

Over 50 years the impact of that annual fee is enormous. The investor will end up with less than 30 per cent of the market’s cumulative return, even though they put up all of the capital and took all of the risk. The idea is to reduce costs as much as possible. That is how Vanguard works. Our costs are two-tenths of 1 per cent...

What is your advice to investors?

I believe it is prudent to own a balanced index fund, with 60 per cent in the stock market and 40 per cent in the bond market. Then forget it. Don’t worry. Stay the course. An easy way of thinking about asset allocation is to make your bond allocation equal to your age. So, at my age, 81, I have about 80 per cent of my money in bonds and the rest in equities. I am very happy being conservative.
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