"Enough," written in 2009, is one of my favorite Bogle books. Jack is an example of knowing what is "enough."
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."