"Jack Bogle on Warren Buffett, Bill Gross and How to Invest"

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Howard Donnelly
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"Jack Bogle on Warren Buffett, Bill Gross and How to Invest"

Post by Howard Donnelly »

Hot off the press:

"Warren Buffett has become Vanguard's best salesman, Bogle said. Buffett, of Berkshire Hathaway (BRK.A) , (BRK.B) recently announced that his wife will inherit money to be allocated 90% to the Vanguard 500 Index Fund (VFINX) (VFIAX) (VOO). After the announcement, searches on Google for the 500 Index went haywire. Fund inflows in 2013 were $645 million; in 2014 they are $2.86 billion."

"Jack Bogle on Warren Buffett, Bill Gross and How to Invest in a Volatile Market"
http://www.thestreet.com/story/12924762 ... l=dontmiss
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cfs
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by cfs »

From my side of the keyboard.

Thanks Howard for the link, note, this article is about the Bogleheads annual meeting, here is the start:

About 250 avid fans of John Bogle -- Vanguard's founder and retired CEO -- gathered at the Bogleheads' annual meeting outside Philadelphia on Thursday to listen to "Saint Jack" talk about how to invest, what the market's gyrations mean and how to establish their own financial freedom. Bogle seemed delighted to be there, describing his work as "striving to build a better world for investors -- not just Vanguard investors -- who deserve a fair shake." He gave an informal talk and a formal presentation, delivered confidently and met with frequent laughs from his mainly gray-haired fans.

Recommend reading the whole article.
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TheTimeLord
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by TheTimeLord »

Howard Donnelly wrote:Hot off the press:

"Warren Buffett has become Vanguard's best salesman, Bogle said. Buffett, of Berkshire Hathaway (BRK.A) , (BRK.B) recently announced that his wife will inherit money to be allocated 90% to the Vanguard 500 Index Fund (VFINX) (VFIAX) (VOO). After the announcement, searches on Google for the 500 Index went haywire. Fund inflows in 2013 were $645 million; in 2014 they are $2.86 billion."

"Jack Bogle on Warren Buffett, Bill Gross and How to Invest in a Volatile Market"
http://www.thestreet.com/story/12924762 ... l=dontmiss

Doesn't sound like an age allocation of bonds, how dare he. Buffet, Cramer and lots of other individual stock investors almost always say if you don't have the time or ability to evaluate individual issues then invest in a low cost S&P 500 fund. Note not total market.
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Taylor Larimore
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Fund Sizes

Post by Taylor Larimore »

Buffet, Cramer and lots of other individual stock investors almost always say if you don't have the time or ability to evaluate individual issues then invest in a low cost S&P 500 fund. Note not total market.
Vanguard's Total Stock Market Index Fund (VTSMX) is $355.4 Billion; the S&P 500 Index Fund (VFINX) is $182.7 Billion.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
dbr
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by dbr »

I doubt that statements made in sound bite context to the media that one should buy an S&P 500 fund are meant to be statements that one should buy an S&P 500 fund but not a TSM fund. Did we hear Mr. Buffett state that he had instructed his trustees to buy the S&P 500 but at all costs to avoid TSM? The whole thing has gotten a little ridiculous.

Of course, Mr. Buffet may actually think the stocks in the TSM that are not in the S&P 500 should be avoided, but someone we need to hear him say so.
placeholder
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by placeholder »

I'm all for diversification and small caps and all that but in reality the difference between VTSMX and the S&P 500 has been small especially in recent years so if you look at the growth for 10k from inception of the former you get:
VTSMX:75,726.33
S&P 500:75,004.62
No one knows the future and small caps might way outperform (good for me) or underperform (not so good for me) in the coming years but they still are a pretty small component in a cap weighted index.
garlandwhizzer
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by garlandwhizzer »

I never get tired of listening to Jack Bogle. He is and always has been a giant surrounded by numerous noisy self-serving dwarfs in the investing business.

Garland Whizzer
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Meg77
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by Meg77 »

Wow, what a great read. Wish I could have been there!
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IlikeJackB
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by IlikeJackB »

garlandwhizzer wrote:He is and always has been a giant surrounded by numerous noisy self-serving dwarfs in the investing business.

Garland Whizzer
Love it - very well said!
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TheTimeLord
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Re: Fund Sizes

Post by TheTimeLord »

Taylor Larimore wrote:
Buffet, Cramer and lots of other individual stock investors almost always say if you don't have the time or ability to evaluate individual issues then invest in a low cost S&P 500 fund. Note not total market.
Vanguard's Total Stock Market Index Fund (VTSMX) is $355.4 Billion; the S&P 500 Index Fund (VFINX) is $182.7 Billion.

Best wishes.
Taylor
Ok, but not sure how that changes the advice people gave. Also I said low cost not Vanguard. There are a lot of S&P 500 options out there. SPY is $170 billion. My guess is these guys skew towards larger cap because they feel they are safer or more stable in pullbacks. Personally I don't own any S&P 500, although I do consider it the market. I hold total market with both Vanguard and Fidelity.
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Fallible
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by Fallible »

StarbuxInvestor wrote:
Howard Donnelly wrote:Hot off the press:

"Warren Buffett has become Vanguard's best salesman, Bogle said. Buffett, of Berkshire Hathaway (BRK.A) , (BRK.B) recently announced that his wife will inherit money to be allocated 90% to the Vanguard 500 Index Fund (VFINX) (VFIAX) (VOO). After the announcement, searches on Google for the 500 Index went haywire. Fund inflows in 2013 were $645 million; in 2014 they are $2.86 billion."

"Jack Bogle on Warren Buffett, Bill Gross and How to Invest in a Volatile Market"
http://www.thestreet.com/story/12924762 ... l=dontmiss

Doesn't sound like an age allocation of bonds, how dare he. Buffet, Cramer and lots of other individual stock investors almost always say if you don't have the time or ability to evaluate individual issues then invest in a low cost S&P 500 fund. Note not total market.
Do you have direct quotes or comments from Buffett and others you refer to as advising NOT to invest in TSM?
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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TheTimeLord
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by TheTimeLord »

Fallible wrote:
StarbuxInvestor wrote:
Howard Donnelly wrote:Hot off the press:

"Warren Buffett has become Vanguard's best salesman, Bogle said. Buffett, of Berkshire Hathaway (BRK.A) , (BRK.B) recently announced that his wife will inherit money to be allocated 90% to the Vanguard 500 Index Fund (VFINX) (VFIAX) (VOO). After the announcement, searches on Google for the 500 Index went haywire. Fund inflows in 2013 were $645 million; in 2014 they are $2.86 billion."

"Jack Bogle on Warren Buffett, Bill Gross and How to Invest in a Volatile Market"
http://www.thestreet.com/story/12924762 ... l=dontmiss

Doesn't sound like an age allocation of bonds, how dare he. Buffet, Cramer and lots of other individual stock investors almost always say if you don't have the time or ability to evaluate individual issues then invest in a low cost S&P 500 fund. Note not total market.
Do you have direct quotes or comments from Buffett and others you refer to as advising NOT to invest in TSM?
That is not what I said!!! I just put a note on the end for claritry's sake. Lots of big name investors make this recommendation to buy a low cost S&P 500 (I have heard Jim Cramer say it maybe half a dozen times). They don't recommend buying a Total Market Fund. They don't say not to either. Why they choose the S&P 500 could be a larger Cap bias, they consider to be the market, could be everyone has one or maybe they just figure people know what it is. Now in Buffet's case for his wife he specifically picked it probably because he believes it will do better in downturns or generate more dividends but only he knows. So to sum up they tend to recommend an S&P 500 fund but no other funds which means they don't recommend the Total Market Fund but they don't say not to buy it either.
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DVMResident
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by DVMResident »

The use of the S&P 500 is used for historical reasons, but the difference between the TSM and S&P500 are negligible.
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cfs
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by cfs »

From my side of the keyboard.

Here is my take (a big guess) on the recommendations from the so-called market gurus on investing in "an index fund." They are used to the top three indexes in the United States (DOW industrials, NASDAQ composite, and the Standards and Poors 500 Index). They are not used to the large value index, large growth index, midcap value index, midcap growth index, small value index, small growth index, large cap index, total stock market index, etc., and for them the S&P 500 is the king of the indexes and that's "the one they try to beat" every year. On a daily basis they watch the DOW Industrials, the NASDAQ composite, and the S&P 500, and they recommend the index that they are familiar with--the S&P 500 index. That's my take, and of course others may disagree.
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JoMoney
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by JoMoney »

Arguing about the differences between the S&P500 and "Total Stock Market" is almost as irrelevant as arguing about differences between the Wilshire 5000, the Russell 3000, the MSCI U.S. Investable Market 2500 Index, or any of the other broad U.S. Market-Cap weighted index. There are some minor differences, but it's just not enough to really argue about.
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by ruralavalon »

DVMResident wrote:The use of the S&P 500 is used for historical reasons, but the difference between the TSM and S&P500 are negligible.
Worth remembering: (1) the performance of the S&P 500 and TSM funds has been nearly identical; and so (2) never switch from S&P 500 to TSM trying to diversify when there is a tax cost.

Commentators talk about the S&P 500 and S&P 500 funds in discussing trends etc. because they have a longer history.
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stemikger
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by stemikger »

Howard Donnelly wrote:Hot off the press:

"Warren Buffett has become Vanguard's best salesman, Bogle said. Buffett, of Berkshire Hathaway (BRK.A) , (BRK.B) recently announced that his wife will inherit money to be allocated 90% to the Vanguard 500 Index Fund (VFINX) (VFIAX) (VOO). After the announcement, searches on Google for the 500 Index went haywire. Fund inflows in 2013 were $645 million; in 2014 they are $2.86 billion."

"Jack Bogle on Warren Buffett, Bill Gross and How to Invest in a Volatile Market"
http://www.thestreet.com/story/12924762 ... l=dontmiss
Thanks for the article Howard. One of the things I struggled with this year is if I should be so heavy in bonds. This was due to what Warren Buffett said in his 2013 letter to shareholders and at 50 I actually made the move to 100% stocks. I found myself looking at the market daily, not sleeping that great at night and I realized, I'm not cut out for such a risky portfolio. Even if it does better in the long run (which most likely it will), I am back to my 65/35 AA portfolio.

Now, I don't watch the market daily and I'm sleeping better. There is no way I'm saying Warren is wrong, but I think Jack knows more about how the little guy needs to invest in order to Stay the Course.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

Post by Boglegrappler »

Did we hear Mr. Buffett state that he had instructed his trustees to buy the S&P 500 but at all costs to avoid TSM? The whole thing has gotten a little ridiculous.
We didn't hear that, but his recommendation of the S&P 500 index fund is in writing in his letter to shareholders, and qualifies as more than a soundbite.
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