February 2019 • Evan Simonoff
In any business, there are people who are innovators and a few who even qualify as visionaries. Then there are a smaller number who transcend their own industries and transform the way people live. Born to an affluent family that lost its wealth in 1929, John Bogle was a child of the Depression, and that experience would shape the rest of his career. His senior thesis at Princeton questioned whether mutual funds could perform as well as their indexes. It caught the attention of Wellington Management, one of the great early mutual fund and institutional investment complexes. Despite his foresight, Bogle was human. In the 1960s, he was seduced by go-go growth stocks and bought Thorndike, Doran, Paine & Lewis, a move that would lead to his departure from Wellington, a lesson that led to the creation of Vanguard. One of my favorite stories was financial journalist Jane Bryant Quinn’s tale of meeting Bogle in 1975. A gifted salesman, Bogle presented her with evidence about how difficult it was to outperform the indexes for an extended period of time. Being a skeptic, Quinn was dubious, reasoning that when something sounds too good to be true, it probably is. Today, however, she is a believer—and a serious advocate of indexing. A man of strong opinions, Bogle spent the last quarter century of his life as a powerful investor advocate, challenging corporate governance beyond the fund industry. The financial crisis provided him with a platform, and many of those who dismissed him as a crank were silenced. Some of his views were controversial and clashed with the company he founded. For years, he argued U.S. investors needed to put only 5% or 10% of their assets in international funds, reasoning that multinationals in the S&P 500 provided them with plenty of global exposure. Early this year, Vanguard recommended that investors increase their international exposure from 30% to 40%. Eventually, he warmed somewhat to ETFs, though their marketing pitch in the early 2000s—trade all day at no cost—left him horrified. I remember hearing him say he couldn’t think of a dumber idea for individuals to destroy their personal capital. But what do you say about a man who had a heart attack at 31 and lived to be 89, and who enjoyed three separate careers, each one dwarfing those of most mortals? John Bogle leaves the world of investing a far better place. Email me at [email protected] with your opinion. First « 1 2 » Next
In any business, there are people who are innovators and a few who even qualify as visionaries. Then there are a smaller number who transcend their own industries and transform the way people live.
Born to an affluent family that lost its wealth in 1929, John Bogle was a child of the Depression, and that experience would shape the rest of his career. His senior thesis at Princeton questioned whether mutual funds could perform as well as their indexes. It caught the attention of Wellington Management, one of the great early mutual fund and institutional investment complexes.
Despite his foresight, Bogle was human. In the 1960s, he was seduced by go-go growth stocks and bought Thorndike, Doran, Paine & Lewis, a move that would lead to his departure from Wellington, a lesson that led to the creation of Vanguard.
One of my favorite stories was financial journalist Jane Bryant Quinn’s tale of meeting Bogle in 1975. A gifted salesman, Bogle presented her with evidence about how difficult it was to outperform the indexes for an extended period of time. Being a skeptic, Quinn was dubious, reasoning that when something sounds too good to be true, it probably is. Today, however, she is a believer—and a serious advocate of indexing.
A man of strong opinions, Bogle spent the last quarter century of his life as a powerful investor advocate, challenging corporate governance beyond the fund industry. The financial crisis provided him with a platform, and many of those who dismissed him as a crank were silenced.
Some of his views were controversial and clashed with the company he founded. For years, he argued U.S. investors needed to put only 5% or 10% of their assets in international funds, reasoning that multinationals in the S&P 500 provided them with plenty of global exposure. Early this year, Vanguard recommended that investors increase their international exposure from 30% to 40%.
Eventually, he warmed somewhat to ETFs, though their marketing pitch in the early 2000s—trade all day at no cost—left him horrified. I remember hearing him say he couldn’t think of a dumber idea for individuals to destroy their personal capital.
But what do you say about a man who had a heart attack at 31 and lived to be 89, and who enjoyed three separate careers, each one dwarfing those of most mortals? John Bogle leaves the world of investing a far better place.
Email me at [email protected] with your opinion.
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