10 Questions for John Bogle

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Re:

Postby MaxFax » 06 Nov 2010 13:55

Taggart wrote:"... 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?
Using the S&P data from 1922 to 2009 (Ref) you get:
Earnings growth 5.0%
plus Increase in P/E 0.6%
--------------------------
stock capital gains 5.6%
Total returns 10.2%
-----------------------
Difference = 4.6% from dividends.

But you have to realize that dividend yields used to be 6% ... 7% ... even 8%. I don't expect to ever see that in my lifetime.
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Re: Re:

Postby adrian2 » 06 Nov 2010 16:42

MaxFax wrote:But you have to realize that dividend yields used to be 6% ... 7% ... even 8%. I don't expect to ever see that in my lifetime.

For the market as a whole, those yields were never in effect in the past 50 years, maybe significantly longer than that. Feel free to compare it with interest rates from the Merchant of Venice time, I'll stick with more modern periods.
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Re: Re:

Postby adrian2 » 07 Nov 2010 14:35

adrian2 wrote:Feel free to compare it

Wishful thinking to expect a reply or acknowledgment from MF when errors or bad numbers are pointed out in his posts. He did visit the forum and has posted in other threads since I've challenged some of his numbers.

All we get is the never-ending links to his own site, who he refuses to acknowledge as his own baby, plus his monologues, which may contain valid points, but lack credibility as there is no two-way discussion with him (in his own words: "I'm not here to socialize"). WADR, MaxFax, why are you here, besides trying to increase the link count and traffic to your own site?
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Re: 10 Questions for John Bogle

Postby George$ » 04 Dec 2010 18:41

Always interesting Bogle - interview at IndexUniverse
Bogle: Time For A Trading Tax
a snipet
Ludwig: Can you offer any investing insights on the Great Recession and the persistently high unemployment in the U.S.?

Bogle: This is the hardest time I've ever seen to invest. Fixed income is not a very attractive haven. It’s attractive for its relative stability, or at least should be, but not attractive for its returns. Stocks do look significantly more attractive than bonds, barring a great catastrophe.

However, because I think there's more of a chance of real substantial economic problems down the road in America and around the globe, I would lean a little bit towards bonds despite the fact that those yields are not attractive.
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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 04 Dec 2010 20:26

Bogle: because I think there's more of a chance of real substantial economic problems down the road in America and around the globe, I would lean a little bit towards bonds despite the fact that those yields are not attractive.

Sounds consistent with Bill Bernstein's invocation of Pascal's Wager although Bernstein was talking more about keeping your powder dry and your duration short.
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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 04 Mar 2011 11:43

Mutual-funds giant Bogle on money, living well, and Madoff
At 81, Bogle was sharp as ever, displaying no evidence of having just been hospitalized for a touch of the flu. In fact, Bogle recently celebrated the 15th anniversary of his heart transplant yet shows no signs of slowing down or curtailing the messages he has espoused for decades. Why should he? So much of what he has said for years has come true.

Bogle's sense of serendipity extends to things he has preached for decades: ethics and giving value to clients.

He is the antithesis of Michael Douglas' character Gordon Gekko, who famously said that "greed is good" in the movie Wall Street. To the contrary, while extolling the virtues of entrepreneurship, Bogle is quick to point out: "No, greed is not good. Ambition is good." Bogle laments that college finance courses and business schools often assert that the only incentives that move the world are financial.

"Isn't living a worthy life an incentive?" he asked. "Isn't being a good member of the community an incentive?"

"I read a wonderful quote the other day," he added. "It said the great thing about money is that it will buy you all you want of anything in the world that is totally unimportant. It cannot buy you what is important."
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Re: 10 Questions for John Bogle

Postby flywaysuzy » 04 Mar 2011 18:15

That was a nice article, Bylo. I even followed an impulse this morning and bought my first etf. It will be interesting watching it and seeing how it does! Really, spending excess money on management fees is pretty pointless and I have resolved to reconfigure my assets and move some to lower cost investments...I knew there was a reason I bought stocks, it is hard to get lower than those!
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Re: 10 Questions for John Bogle

Postby big easy » 12 Sep 2011 18:19

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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 01 Oct 2011 09:45

Bogle: ETF Trading Has No Social Value
Broadly speaking, we have many, many problems. I think the odds are over 50/50 that we’ll be moving into a double-dip recession. But I think what many people have failed to look at closely is the nature of the boom before the bust that we’re now having... So getting the economy back to a decent balance will require—this isn’t very sexy— time...

I therefore have no trouble with some kind of a transaction tax, or a capital-gains tax on short-term capital gains—a very high tax. And even a capital-gains tax generally on gambling—that is to say trading—as compared to providing capital for new ventures. I don’t see any social value in all this trading.
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Re: 10 Questions for John Bogle

Postby Peculiar_Investor » 02 Oct 2011 08:32

Five Questions: Jack Bogle, Vanguard Index Fund Pioneer - Bloomberg
3. What trend in the fund industry troubles you?
It’s this growing speculative fever that affects even the mutual fund industry. Shareholders are holding their mutual funds for three years on average. That’s absurd. And the funds themselves are holding the average stock for about one year. That’s equally absurd. The fund industry has turned into a marketing business, and the important thing is getting a lot of assets under management. It’s run for the benefit of financial conglomerates that own most of the large mutual fund management companies.

<snip>

The best investment advice I ever got came when I was a runner for a brokerage firm when I was in college. One of the other runners said: “Nobody knows nothing.” And of course that’s true. It’s not given to us to know. The future is not ours to see. You try to make intelligent decisions, have an intelligent plan that balances risk and reward, balances stocks and bonds, and ignore the noise in the market.
(my bold -- excellent advice IMHO).
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Re: 10 Questions for John Bogle

Postby George$ » 23 Oct 2011 12:01

Not sure if this has or has not been posted.

Several interesting interviews with Jack Bogle by Morningstar - at Bogleheads gathering
Last edited by George$ on 23 Oct 2011 12:05, edited 1 time in total.
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Re: 10 Questions for John Bogle

Postby George$ » 25 Oct 2011 14:54

Bogle at Bogleads meeting October 13, 2011
Vanguard Today and more ....
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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 29 Feb 2012 10:34

Journal of Indexes: The Bogle Issue

Image
If one person can be credited with making the existence of this publication possible, it would be John Bogle. Yes, indexes have been around for over a century, but it wasn't until Mr. Bogle launched the Vanguard 500 and kick-started an entire investment phenomenon that they were viewed as anything other than measures of the market. So some 35 years after the advent of the first index fund, it makes sense to pay tribute to the man who started it all.

We open the issue with excerpts from Bogle's 1951 college thesis, "The Economic Role of the Investment Company."...

Next is a roundtable that asks Bogle's friends and colleagues about his impact on them and the investing public. Gus Sauter, Burton Malkiel, William Bernstein, Rob Arnott, Don Phillips and others offer their personal impressions and thoughts...

What follows is a sneak peek at Bogle's upcoming book, "The Clash of the Cultures: Investment vs. Speculation," which will be published this summer...

After that, Standard & Poor's Srikant Dash weighs in with his top 10 takeaways from a decade's worth of SPIVA reports and Persistence Scorecards...

And Christopher Philips offers the latest version of "The Case for Indexing," Vanguard's seminal research paper on why passive investment is the only sound decision...

Rolf Agather of Russell Investments takes a look at the history of indexing and the modern-day blending of passive and active strategies...

Then David Blitzer chimes in with a look back at the original academic arguments underlying the advent of the index fund...

Let's all raise our glasses to the marvelous, brutally honest and passionately sensible Jack Bogle!

:beer: :beer: :beer:
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Re: 10 Questions for John Bogle

Postby AltaRed » 29 Feb 2012 10:52

Hear! Hear! To the one and only
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Re: 10 Questions for John Bogle

Postby dusty2 » 29 Feb 2012 11:44

Bogle says that the best advice he ever got was 'nobody knows nothing' which means someone knows something, since it's a double negative. Now Bogle has to find the person that knows something. The TSX was up 40 points this morning, then Bernankie puts on a news conference and 5 minutes later it's down 20 points. Someone should tell him to keep quiet.
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Re: 10 Questions for John Bogle

Postby 6miths » 29 Feb 2012 20:27

dusty2 wrote:Bogle says that the best advice he ever got was 'nobody knows nothing' which means someone knows something, since it's a double negative.


Literally it may mean that but it doesn't really. And even if 'someone knows something', the market knows what everyone knows pretty quickly so it is very hard to find and exploit any inefficiencies. Thus, indexing wins most of the time.

Thank you Mr Bogle.
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Re: 10 Questions for John Bogle

Postby George$ » 15 Mar 2012 06:56

Jack Bogle is speaking at the upcoming IndexUniverse conference next Monday in Philadelphia. I plan to be there. Any suggestions for good questions to ask Jack would be welcome. :D

Designed for Pension Plans, Endowments & Foundations

IndexUniverse is excited to announce the launching of our new national conference aimed at the institutional index investing community, including: Public and private pension plans
Endowments
Foundations
Hedge funds and traditional funds
Family offices
Other institutional investors

Spearheaded by our Journal of Indexes editorial staff, the book of record for the indexing industry for more than decade, the conference will address such topics as:
Trading issues
Transition and liquidity management
Rebalancing strategies
Securities lending
Index portfolio manager evaluation
Index construction methodologies
Alternative investment categories
ETFs in the institutional setting
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Re: 10 Questions for John Bogle

Postby Taggart » 21 Jun 2012 16:47

Bogle interviewed at the end of today's down market trading session.
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Re: 10 Questions for John Bogle

Postby ghariton » 21 Jun 2012 20:59

Taggart wrote:Bogle interviewed at the end of today's down market trading session.

Good stuff

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Re: 10 Questions for John Bogle

Postby Taggart » 06 Aug 2012 13:32

Jack Bogle was interviewed earlier today on CNBC. The video runs just over ten minutes.

Bogle: We've Created a 'Frankenstein' of Trading
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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 06 Aug 2012 13:54

Bogle's new book is out: The Clash of the Cultures: Investment vs. Speculation • $20 tax-exempt and shipped to Canada from Book Depository. (As opposed to buying from their owners for CA$22.53 plus tax plus shipping.)

I placed my order earlier today.
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Re: 10 Questions for John Bogle

Postby zinfit » 07 Aug 2012 17:24

In Canada it was my understanding that gains resulting from frequent trading are treated as income?
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Re: 10 Questions for John Bogle

Postby newguy » 07 Aug 2012 19:24

zinfit wrote:In Canada it was my understanding that gains resulting from frequent trading are treated as income?
Not really, it's much more complicated than that here. Maybe you're thinking of the short term capital gains tax rate for US federal taxes.

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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 12 Aug 2012 08:55

A nice profile of Bogle in the NYTimes plus a reference to it and comment about his wealth relative to other fundco founders:

John Bogle, Vanguard’s Founder, Is Too Worried to Rest - NYTimes.com
“It’s urgent that people wake up,” he says. Why? This is the worst time for investors that he has ever seen — and after more than 60 years in the business, that’s saying a lot.

Start with the economy, the ultimate source of long-term stock market returns. “The economy has clouds hovering over it,” Mr. Bogle says. “And the financial system has been damaged. The risk of a black-swan event — of something unlikely but apocalyptic — is small, but it’s real.”

Even so, he says, long-term investors must hold stocks, because risky as the market may be, it is still likely to produce better returns than the alternatives. “Wise investors won’t try to outsmart the market,” he says. “They’ll buy index funds for the long term, and they’ll diversify. But diversify into what? They need alternatives, bonds, for the most part. What’s so frightening right now is that the alternatives to equities are so poor.”

In the financial crises of the last several years, he says, investors have flocked to seemingly safe government bonds, driving up prices and driving down yields. The Federal Reserve and other central banks have been pushing down interest rates, too. But low yields today predict low returns later, he says, and “the outlook for bonds over the next decade is really terrible.”

Dark as this outlook may be, he says, people need to “stay the course” if they are to have hope of buying homes or putting children through college or retiring in comfort.


Jack Bogle Isn't As Filthy Stinking Rich As Most Mutual Fund Giants
Players in the mutual fund business can earn tons of money and accumulate immense amounts of wealth. In a profile two weeks ago, the New York Times told us that Mohamed El-Erian of bond fund PIMCO "was paid about $100 million last year."  Billionaire Bill Gross made twice that amount.

Members of the Johnson family, who are behind mutual fund giant Fidelity, regularly show up near the top of Forbes' list of billionaires.

But Jack Bogle, who is perhaps the most recognized name in the mutual fund industry, isn't nearly as wealthy as his peers.

So where did Bogle's $billions go? Straight into the pockets of those of us who invested in his low-cost mutual funds and ETFs.
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Re: 10 Questions for John Bogle

Postby Bylo Selhi » 20 Aug 2012 10:05

John Bogle's 10 rules of investing
1. Remember reversion to the mean. What's hot today isn't likely to be hot tomorrow. The stock market reverts to fundamental returns over the long run. Don't follow the herd.
2. Time is your friend, impulse is your enemy. Take advantage of compound interest and don't be captivated by the siren song of the market. That only seduces you into buying after stocks have soared and selling after they plunge.
3. Buy right and hold tight. Once you set your asset allocation, stick to it no matter how greedy or scared you become.
4. Have realistic expectations. You are unlikely to get rich quickly. Bogle thinks a 7.5 percent annual return for stocks and a 3.5 percent annual return for bonds is reasonable in the long-run.
5. Forget the needle, buy the haystack. Buy the whole market and you can eliminate stock risk, style risk, and manager risk. Your odds of finding the next Apple (AAPL) are low.
6. Minimize the "croupier's" take. Beating the stock market and the casino are both zero-sum games, before costs. You get what you don't pay for.
7. There's no escaping risk. I've long searched for high returns without risk; despite the many claims that such investments exist, however, I haven't found it. And a money market may be the ultimate risk because it will likely lag inflation.
8. Beware of fighting the last war. What worked in the recent past is not likely to work going forward. Investments that worked well in the first market plunge of the century failed miserably in the second plunge.
9. Hedgehog beats the fox. Foxes represent the financial institutions that charge far too much for their artful, complicated advice. The hedgehog, which when threatened simply curls up into an impregnable spiny ball, represents the index fund with its "price-less" concept.
10. Stay the course.
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