Article of John Bogle

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tolerable2323
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Article of John Bogle

Post by tolerable2323 »

My new years resolution was to read and listen to more dissenting points of view. I saw this Article on Reason.com about John Bogle

https://reason.com/archives/2019/01/21/ ... nguard-fou

Made some interesting points and got me thinking.
retiringwhen
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Re: Article of John Bogle

Post by retiringwhen »

Good article and Ira Stoll addresses one of my complaints about a lot of the discussion about Vanguard's history. The path chosen is integral to why Vanguard is so successful. It it is far form clear that a path to Jack Bogle being a Billionaire would have happened if the twin approach of mutual ownership AND low-fees were not linked.
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ClevrChico
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Re: Article of John Bogle

Post by ClevrChico »

John wrote a book called "Enough". To make this actionable, consider reading it if you haven't.

I find this article poorly researched and poorly timed.
Last edited by ClevrChico on Tue Jan 22, 2019 8:23 pm, edited 1 time in total.
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arcticpineapplecorp.
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Re: Article of John Bogle

Post by arcticpineapplecorp. »

what interesting points?
got you thinking what?

I'll share my thoughts after reading some of the comments (quoted below):
Sorry, but that's nonsense. Had Bogle pursued the conventional, high-fee approach to mutual fund management, it's quite possible he would have ended up not as a billionaire but in obscurity, just another mediocre retired executive from some forgettable fund firm.
First, you can't prove a counterfactual.

Second, to make the assumption that Ned Johnson and Charles Schwab are richer than Jack because they charged low fees misses a few points:

A. Chuck and Ned own their companies (Ned privately and Chuck's company is publicly traded but what percentage ownership does he have?) Certainly more than the percentage of Vanguard that Jack owned, which was 0%.

B. Fidelity and Schwab may be beating Vanguard on many index funds, it's not true with their actively managed funds (which provides more ample opportunities to out earn Jack not by charging lower fees as the author suggests, but higher fees on their active funds.

C. Fidelity and Schwab may be beating Vanguard on many index funds, but this is a recent development. So the owners (Ned and Chuck) had ample opportunity to out earn Jack for a long time by charging higher fees than Vanguard until recently.

The next paragraph (I won't quote) he uses the examples of Jeff Bezos, Ray Croc and Charles Schwab as people who got rich by lowering fees. True, but again they all are owners of their publicly traded businesses. Most of their money probably comes from stock options. This was not true (nor an option) for Jack because Vanguard is owned by the mutual funds.

He finally makes the case that the structure of Vanguard is the reason Jack didn't get as wealthy as the others and this is true for the reasons I stated above. Jack wasn't an owner of the company. The mutual funds were. Jack didn't have stock in the company, because there is none. Unfortunately, the author writes:
Perhaps if Bogle had realized he was giving up $10 billion by adopting a mutual structure when he set up Vanguard, he would have done it differently at the time. Once such a decision is made, it is hard to undo.
Good God, does the author understand nothing? Does he not understand that Jack knew exactly what he was doing setting up the company the way he did. Does the author not understand Jack knew about "Enough" (enough to write a book titled "Enough")?? Jack's own regret of not earning $10 billion "is that I don't have more to give away." source: https://www.google.com/search?client=fi ... xy5d-xqYhM

Not to mention, demutualization can happen; it is not "hard to undo". Ask policy owners of John Hancock, Met LIfe and Prudential and countless other companies that have demutualized.

Too bad the author had to publish such an article on the day Jack was laid to rest. Some people have no class.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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tolerable2323
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Re: Article of John Bogle

Post by tolerable2323 »

When would have it been appropriate time for this writer to write this article? 3 weeks from now? 6 months?, next year? besides the comment of his article being inappropriate you made some valid points.
Greenman72
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Re: Article of John Bogle

Post by Greenman72 »

arcticpineapplecorp. wrote: Tue Jan 22, 2019 8:16 pm
Perhaps if Bogle had realized he was giving up $10 billion by adopting a mutual structure when he set up Vanguard, he would have done it differently at the time. Once such a decision is made, it is hard to undo.
Good God, does the author understand nothing? Does he not understand that Jack knew exactly what he was doing setting up the company the way he did. Does the author not understand Jack knew about "Enough" (enough to write a book titled "Enough")?? Jack's own regret of not earning $10 billion "is that I don't have more to give away."
I actually agree with the author on this (at least on some level).

That is--society is willing to pay $10 billion for what JB had to offer. He settled for $100 million. (I'm guessing at $100 million. Don't know what his net worth actually was.) So he really did give away $9.9b--but he didn't get to choose to whom he gave it.

Had he actually taken the $10b, he could have given it to recipients of his choosing. But instead, he chose to give it to the shareholders of Vanguard or rather, to society in general.

To each his own. But personally, I like to choose my charities.
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Re: Article of John Bogle

Post by Olemiss540 »

I think this is a situation where INTENT matters. There is a reason Jack structures his company as he did, and it had nothing to do with his own profits.

How can you ignore this while still remaining unbiased? He had intent to give money back to the common people that were being taken advantage of. What the heck else was he trying to do? Many articles articulate what could have been but none have articulated the logic being what ACTUALLY happened.....
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
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Phineas J. Whoopee
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Re: Article of John Bogle

Post by Phineas J. Whoopee »

How much champagne can one family drink?

If I had ten billion, the only thing I can think of to do is give most of it away.

If I had eighty million, the only thing I can think of to do is give most of it away.

On the other hand, if enough is good, too much must be better.

PJW
Wakefield1
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Re: Article of John Bogle

Post by Wakefield1 »

I believe Mr. Bogle was every bit as smart as any of those richer execs mentioned,had he competed with them to see how much he could get, he could have been every bit as rich.
Article reinforces my impression that some in the High Finance industry were somewhat resentful of Mr. Bogle.
I believe Mr. Bogle to have been considerably more altruistic than some in the industry.

On further thought I realize that some of those other execs inherited much more than Mr. Bogle.
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arcticpineapplecorp.
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Re: Article of John Bogle

Post by arcticpineapplecorp. »

tolerable2323 wrote: Wed Jan 23, 2019 12:43 am When would have it been appropriate time for this writer to write this article? 3 weeks from now? 6 months?, next year? besides the comment of his article being inappropriate you made some valid points.
multiple choice? I choose "none of the above" or better yet "never" considering the points of the article were easily refuted in my previous post.

I also find it interesting that you found the article "interesting" and got you "thinking", but you never actually shared what your thoughts were.

Regardless, the article misses the entire point. It focuses on whether Jack could have made more money or not. He never considers whether Jack knew he had "Enough". I wonder if the author ever read the Jack Bogle quote (let alone can understand it) from Jack's book "Enough":
Here’s how I recall the wonderful story that sets the theme for my remarks today: At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph 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."

source: https://www.vanguard.com/bogle_site/sp20070518.htm
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
Fallible
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Re: Article of John Bogle

Post by Fallible »

arcticpineapplecorp. wrote: Wed Jan 23, 2019 7:38 pm ...
Regardless, the article misses the entire point. It focuses on whether Jack could have made more money or not. He never considers whether Jack knew he had "Enough". ...
Good point. Even before Jack's death, I was always surprised and a little dismayed to see so many articles written about how much money he could've had if only... I realize this angle has its place, but always thought it said much more about colossal Wall Street Wealth and those impressed by and envious of it than about who Jack Bogle was. Fortunately, most authors of these articles (at least the ones I’ve read) also write about his feelings about millions vs. billions vs. “enough” and then go on to write about the qualities that made him great.
"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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