"ENOUGH"

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"ENOUGH"

Postby Taylor Larimore » Fri Oct 31, 2008 5:16 pm

Hi Bogleheads:

"Enough" is Jack Bogle's latest book. Former SEC Chairman Arthur Levitt wrote:
"Enough is must reading for millions of U.S. investors disenchanted by today's culture of greed, accounting distortions, corporate malfeasance and oversight failures."

"Enough" is a worthy addition to our Collection of Investment Gems. These are insightful excerpts:

"At a party give by a billionaire, Kurt Vonnegut informs his pal, Josepth Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, 'Yes, but I have something he will never have...enough."

"Not knowing what enough is, subverts our professional values. It makes salespersons of those who should be fiduciaries of the investments entrusted to them."

"I grew up with the priceless advantage of having to work for what I got."

"On February 21, 1996, I at last received my new heart.--One more reason why I am convinced that I have received more blessings than any other human being on the face of the earth."

"I've developed a profound concern that our society is moving in the wrong direction."

"We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."

"We have more than enough of the fool's gold of marketing and salesmanship and not enough of the real gold of trusteeshiip and stewardship."

"The more the financial system takes, the less the investor makes. The investor feeds at the bottom of what is today the tremendously costly food chain of investing."

"In 2007 alone, the 50 highest-paid hedge fund manager together earned $29 billion (yes, billion). If you didn't make $360 million in that single year, you didn't even crack the top 25."

"I passionately subscribe to these simple principles of balance, diversification, and focus on the long term."

"Today, if fund managers can claim to be wizards at anything, it is in extracting money from investors. In 2007, the direct costs of the mutual fund system totaled more than $100 billion year after year paid by the investors themselves."

"Over the past two centuries, our nation has moved from an agricultural economy to a manufacturing economy, to a service economy, and now to a predominantly financial economy."

"It is essential that we demand that the financial sector function far more effectively in the public interest and in the interest of investors than it does today."

"When I first came into the financial field in 1951, the annual rate of turnover of stocks was running at about 25%. Yet by last year, stock turnover had shot up to 215%."

"In the financial markets, the improbable is, in fact, highly probable."

"While there have been numerous black swans in our short-term-oriented and speculative financial markets, there have been no black swans in the long-term returns generated by U.S. stocks."

"In investing, tortoises tend to win far more often than hares over the turns of the market cycle." (Peter Bernstein, quote)

"Heck, I don't even know anyone who knows anyone who has timed the market with consistent, successful, and replicable results."

"For me, simplicity has always been the key to successful investing."

"Financial institutions have a large incentive to favor the complex and costly over the simple and cheap."

"The notional principal value of all derivatives is almost beyond imagination--some $600 trillion, nearly 10 time the $66 trillion gross domestic product of the entire world."

"Fidelity's remarkable Peter Lynch declared, 'Most investor would be better off in an index fund.' He was right!"

"Wall Street's perennial advice to its clients: 'Don't just stand there. Do something!'"

"During the 25 years ended 2005, the average equity fund reported an annual rate of return of 10%--trailing the 12.3% return of an S&P 500 Index Fund."

"I've been lucky enough to have played a key role in a number of innovations: the stock index fund, the bond index fund, the defined-maturity bond fund, the tax-managed fund, and even the first fund-of-funds."

"Nobel Laureate, economist Paul Samuelson called the first index mutual fund the equivalent of the invention of the wheel and the alphabet."

"ETFs used for investment are perfectly sound, but using them for speculation is apt to end badly for investors."

"As the Oracle of Omaha (Warren Buffett) sometimes expresses it, 'There are three i's in every cycle: first the innovator, then the imitator, and finally the idiot.'"

"My long experience warns that it's all too counterproductive for investors to jump on the bandwagon of superior past performance."

"Mark me down, too, as an index fundamentalist, a passionate believer that the simplicity of the original index fund design--highly diversified portfolio of stocks weighted by their market capitalizations--continues to represent the gold standard for investors."

"Not everything that counts can be counted, and not everything that can be counted counts."

"By worshiping at the altar of numbers and by discounting the immeasurable (trust, wisdom, character, ethical values), we have in effect created a numeric economy that can easily undermine the real one."

"That's the trouble with complex calculations: They can't be trusted to convey simple truths."

"For God's sake, let's always keep Vanguard a place where judgment has at least a fighting chance to triumph over process."

"If you do not have integrity, no one will trust you, nor should they."

"The 2003 failure of Arthur Anderson, and the earlier bankruptcy of its client Enron, was but one dramatic example of the consequences of this conflict-riddled relationship."

"Since 1950, direct ownership of U.S. stocks by individual investors has plummeted from 92% to 26%"

"In 1980 the compensation of the average chief executive officer was 42 time that of the average worker. Since then it has risen to 520 times."

"Until we pay CEOs on the basis of corporate performance rather than on the basis of corporate peers, CEO pay will, almost inevitably, continue on its upward path."

"In 1951, mutual fund assets totaled $2 billion. Today, assets total more than $12 trillion."

"The challenge to investors in picking funds has become almost equivalent to the challenge in picking individual stocks."

"The 10% annual return of the average fund over 25 years was 37% higher than the 7.3% return earned by fund shareholders (who traded)."

"A star system among mutual fund managers has evolved, with all the attendant hoopla, encouraging hyperactivity by fund investors--but most of these stars have turned out to be comets."

"In 1951, the typical mutual fund focused on the wisdom of long-term investing, holding the average stock in its portfolio for about six years. Today the holding period for a stock for actively managed equity funds is just one year."

"My dream is to design a new industry in which we give our investors a fair shake in terms of costs."

"Nearly 2,800 of the 6,126 mutual fund that existed in 2001 are already dead and gone."

"What I'm ultimately looking for is an industry that is focused on stewardship--the prudent handling of other people's money solely in the interest of our investors."

"Both leaders and managers must learn to view those who work with them--from the highest to the humblest--not just as pawns on a corporate chessboard, but as human beings with the same needs and concerns that all of us have."

"As head of Vanguard, I proposed a single overarching but simple rule: 'Do what's right. If you're not sure, ask your boss.'"

"If you want to be trusted, be trustworthy. If you demand hard work, work hard. If you want your colleagues to level with you, level with them. It's not very complicated."

"Of the Fortune 500 largest corporations in 1955, only 71 remain on the list today."

"'We did it ourselves.' Really? When I hear that, I'm bold enough to ask, 'Now just how did you arrange to be born in the United States of America?"

"Wisdom. The kind of wisdom that was rife in the age of this nation's Founding Fathers--is in short supply."

"Benjamin Franklin began each day with the (written) question: 'What Good shall I do this day?' and ended with 'What Good have I done today'".

"Success, in short, can be measured not in what we attain for ourselves, but in what we contribute to our society."

"I was born and raised to save rather than spend. I can't remember a single year during my long career in which I've spent more than I earned."

"I've been able to accumulate wealth despite giving, for about the past 20 years, one-half of my annual income to various philanthropic causes."

"So, in comparison to nearly all, if not all, of my peers in this business, I'm something of a financial failure."

"I do my best to avoid the temptation to peek at the value of my fund holding--a good rule for all of us."

"When John D Rockefeller was asked how much was enough, he answered:, 'just a little bit more.'"

"I hope many moons from now, I will take time to revel in the memories of all the wonderful battles I've fought during my long life."

"If you carry nothing else away from your reading of this book, remember this: The great game of life is not about money; it is about doing your best to join the battle to build anew ourselves, our communities, our nation, and our world."


Thank you, Jack!

Best wishes.
Taylor

Excerpt from other great books in our gem collection:

Investment Gems
Last edited by Taylor Larimore on Sun Jun 06, 2010 9:09 pm, edited 1 time in total.
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Postby Gekko » Fri Oct 31, 2008 5:31 pm

"The man is a miracle. Proof that, despite all the evils, cavils, and horrors humans visit upon this earth and each other, the species can once in a great while redeem itself."

"He was a man, take him for all in all, I shall not look upon his like again." – Hamlet

thanks for posting.
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Thanks Taylor

Postby dharrythomas » Fri Oct 31, 2008 5:50 pm

Jack Bogle is brilliant and the world has been blessed by his efforts. He has been a voice of reason for years and time has proved him right on almost every count.

Money doesn't provide happiness, involvement in a cause bigger than yourself and service to others is what brings true satisfaction.

Harry
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Postby unclemick » Fri Oct 31, 2008 6:01 pm

Amen to all of the above.
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Postby Judsen » Fri Oct 31, 2008 8:21 pm

A special thanks to our moderators, authors, financial professionals and contributors to this forum for taking Jack Bogle's inspiration and using it to extend help and support to so many investors.
You are all terrific!
Jud
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Postby Murray Boyd » Fri Oct 31, 2008 8:48 pm

This book is clearly too political. Moderator, delete this post. :)
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Postby Rob5TCP » Fri Oct 31, 2008 8:55 pm

If we knighted people in this country - he would be
"SIR JACK"
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Bogle was interviewed this am on NPR

Postby cherijoh » Sat Nov 01, 2008 7:31 am

NPR just interviewed John Bogle on Weekend Edition Saturday about his new book. If you wait a few hours, they will have posted the audio to their website http://www.npr.org. Enjoy!

P.S. The Bogleheads got a mention!

C
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Postby Allan » Sat Nov 01, 2008 7:57 am

I just listened to the NPR interview on my morning run, and yes Bogleheads were mentioned by the interviewer. I like his message that we’ve fallen into a trap of counting our material goods too much, and his quote from Einstein that “everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted. Meaning there’s more to life than the assets we’re trying to accumulate.
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Postby sambuca08 » Sat Nov 01, 2008 2:49 pm

My favorite quote from the NPR clip comes at the end, 'The Financial sector of the economy subtracts value ($600B/yr) from society' In this instance, Mr. Bogle is speaking to the immense fees siphoned off, but I can't help but think about the losses in the markets themselves, brought about by the state that the economy is in which is directly a result of the 'financial engineering of numbers' that Bogle takes issue with early in the interview. Great stuff, a great man, but I hope there is a clear mandate about what we can do about the excessive pay as incentive for excessive risk. Ultimately the Boglehead's fate is tied to Wall St. A timely book that we all hope makes a difference to those that need his wisdom most.
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Postby EmergDoc » Sat Nov 01, 2008 2:51 pm

Thanks for posting this Taylor. Now I don't have to read the book!

I also listened to the brief interview with Bogle. I realized I had never actually heard his voice before. He sounds very young for his age.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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Postby CABob » Sun Nov 02, 2008 5:52 pm

Thanks for posting, Taylor.
"ETFs used for investment are perfectly sound, but using them for speculation is apt to end badly for investors."

I'm not a big user of ETFs, but, I am glad to see Jack's clarification of his earlier comments which gave the impression that he was completely opposed to ETFs.
"I've been luck enough to have played a key role in a number of innovations: the stock index fund, the bond index fund, the defined-maturity bond fund, the tax-managed fund, and even the first fund-of-funds."

Can someone tell me what a defined maturity bond fund is?
Bob
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Postby taxman » Sun Nov 02, 2008 6:16 pm

A great collection of the book's excerpts NO DOUBT! , Its funny I've never followed anyone elses books as "gospel" 'so to speak. You figure you read one,. thats great,.. but the next ones better! (i've read BGI/BattleforSoul0fCapitalism, both written by JBogle twice).
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Defined maturity bond fund.

Postby Taylor Larimore » Sun Nov 02, 2008 9:18 pm

Can someone tell me what a defined maturity bond fund is?


I believe that Vanguard mutual fund company was the first to categorize bond funds into short, intermediate or long-term. Mr. Bogle is VERY knowledgeable about bond funds.

Best wishes.
Taylor
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Postby EmergDoc » Sun Nov 02, 2008 9:19 pm

CABob wrote:Can someone tell me what a defined maturity bond fund is?
Bob


Intermediate term. Short term. Long term. etc.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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Postby CABob » Sun Nov 02, 2008 10:39 pm

EmergDoc wrote:
CABob wrote:Can someone tell me what a defined maturity bond fund is?
Bob


Intermediate term. Short term. Long term. etc.

Thank you Taylor and EmergDoc. The answer was much simplier than I anticipated.
Bob
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Postby binarysemaphore » Mon Nov 03, 2008 2:41 am

I just put an hold on the copy of this book at my local library. Though I might have to wait for a while since there are already 5 holds on 2 copies which are yet to be received.

I am looking forward to reading this one. A timely book for current situations.
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Postby VictoriaF » Mon Nov 03, 2008 7:16 am

grayfox wrote:I hope this book gets a lot of attention.


One way to help bringing attention to this book is to post reviews on Amazon.com.

Victoria
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Postby grayfox » Mon Nov 03, 2008 9:08 am

ramsfan wrote:As our country's financial success is linked to our national security in many ways. Not just that our taxes fund the Military, but also that commercial relations with other countries are often used to establish friendly relations, to avoid conflict. As our economy goes in relation to the world, so goes all of this.

So, if a greedy individual or group of individuals destroys wealth for personal gain due to greed, it is not a stretch to think that they are also damaging our country to some extent.


Absolutely! No country will be strong militarily or politically without a strong economy. Look at what happened to the Soviet Union in 1989 when their economy collapsed. They had to pull out of Afghanistan and ceased to be a superpower. Russia's influence was reduced to the point that all their former allies and satellites, like Latvia, Lithuiania, Estonia, Poland, Czech Republic, Slovakia, Hungary, Ukraine, Georgia, etc. all went with the west and are joining the E.U. and Nato. Russia's only ally was Belarus!

We don't want a weak economy. We could find Russia building radar and missile bases in the Carribean and would be powerless to stop it.
Buy TIPS!
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Postby woof755 » Mon Nov 03, 2008 9:10 am

"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." | | --Jason Zweig, quoted in The Bogleheads' Guide to Investing
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Postby Kenster1 » Tue Dec 23, 2008 3:35 pm

"A prince should earnestly endeavor to gain the reputation of kindness, clemency, piety, justice, and fidelity to his engagements. He ought to possess all these good qualities BUT STILL RETAIN SUCH POWER OVER HIMSELF AS TO DISPLAY THEIR OPPOSITES WHENEVER IT MAY BE EXPEDIENT. . . He should make it a rule, above all things, never to utter anything which does not breathe of kindness, justice, good faith, and piety; this last quality it is most important for him to appear to possess as men in general judge more from appearances than from reality. All men have eyes but few have the gift of penetration. Every one sees your exterior, but few can discern what you have in your heart." — Machiavelli — The Prince. Chap. xviii. "
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.
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Postby LynnC » Tue Dec 23, 2008 7:10 pm

Hi Taylor,

My audio copy of "Enough" arrived today. I can't wait to listen to it.

LynnC
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Postby Fear and Loathing » Tue Dec 23, 2008 7:27 pm

Kenster1 wrote:"A prince should earnestly endeavor to gain the reputation of kindness, clemency, piety, justice, and fidelity to his engagements. He ought to possess all these good qualities BUT STILL RETAIN SUCH POWER OVER HIMSELF AS TO DISPLAY THEIR OPPOSITES WHENEVER IT MAY BE EXPEDIENT. . . He should make it a rule, above all things, never to utter anything which does not breathe of kindness, justice, good faith, and piety; this last quality it is most important for him to appear to possess as men in general judge more from appearances than from reality. All men have eyes but few have the gift of penetration. Every one sees your exterior, but few can discern what you have in your heart." — Machiavelli — The Prince. Chap. xviii. "


I love that quote - excellent advice for a manager. "The Prince" is the perfect text for modern management. I personally like the advice regarding assassination (i.e., layoffs).
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