"STAY THE COURSE" by John C. Bogle -- A Gem

[Taylor Larimore]

Bogleheads:

A few days ago Mr. Bogle mailed me his twelfth book (with a valued personal message). It is titled "Stay The Course." It tells the incredible story of Jack's inspiring rise from a table-waiter to founder and CEO of the largest mutual fund company in the world. These are excerpts from this magnificent book:

Forward by Burton Malkiel:
"I served on the Vanguard board for 28 years. I can attest that every policy that came before the board was resolved by applying a simple criterion: Was the policy good or bad for the individual shareholder?"

"Perhaps my favorite testimonial to Jack was written by a group of acolytes, the Bogleheads, devoted to propagating Bogle's investment ideas: "While some mutual fund founders chose to make billions, Jack created Vanguard to make a difference."

Gems by John Bogle:
"For as long as I can remember, I've used the phrase "stay-the-course" to urge investors to invest for the long term and not be diverted by the daily sound and fury of the stock market."

"In 1975, Vanguard's mutual structure and index strategy defied convention."

"No one else who was involved in all of Vanguard's long saga still lives."

"My request to review the corporate minutes of the Vanguard mutual funds during the long period in which I served as chairman was denied by Vanguard."

"Stay the Course represent my own candid and deeply held opinions. They are not necessarily those of Vanguard's present management."

"The new organization would be fire first--and to this day -- the only mutual mutual fund organization run on an "at-cost"basis."

"An ugly fight for control of Wellington Management Company, a fight that cost me my job as CEO, made it appear for a time that my career in the industry I loved was over."

"Mutual fund shareholders ought to be given a fair shake."

Mr. Morgan -- my mentor and the great hero of my long career--was an industry pioneer."

"In the challenges that lay ahead, I would need a guiding star and a motto that encapsulates it. That that motto was, and still is, "Stay the Course."

"The Go-Go era went. It was superseded by something distinctively different, but, as it turned out, even worse: The "Nifty Fifty" craze in which the stock prices of the nation's fastest-growing companies lost all touch with their intrinsic values."

"From its high in early 1973 to its low in early October 1974, the U.S. stock market fell by 50%."

"I realized that a mutual company would never provide me with the personal fortune that so many denizens of Wall Street would earn."

"Even one person can make a difference."

"Incorporated on September 24, 1974, The Vanguard Group was born. We had defied precedent, and we had won the battle for the independence of our mutual funds too operate solely in the interest of our fund owners."

"The index fund was even better: it required no investment adviser, and would pay zero in advisory fees."

"When I decided to start our index fund, I possessed neither the training nor the talent for applied statistics.

"In those early days, the Vanguard funds were "load funds" sold exclusively through brokers."

"A midwest brokerage firm flooded Wall Street with posters, "INDEX FUNDS ARE UN-AMERICAN. HELP STAMP OUT INDEX FUNDS?""
"Indexing is the major force that is reshaping the mutual fund industry."

"We must never underrate the power of compounding investment returns, and always avoid the tyranny of compounding investment costs."

"Investors holding fast to the simple broadly diversified investment with rock-bottom costs -- the S&P 500 index fund -- would be rewarded with truly remarkable returns."

"In those days, investors who purchased share of our mutual funds were assessed front-end sales loads of 7.5% to 8.5%."

"The yield on short-term U.S. treasury bills, which peaked at above 16% in 1981, fell to only a hair above zero from 2008-2015."

"In 2017 alone, we estimate that Vanguard's low costs saved investors $29 billion in fees and expenses."

"We stuck with these two rules: (1) Increased market share is a measure of our success in serving clients, and not an objective; and (2) market share must be earned and not bought."

"On October 19, 1987 -- Black Monday -- stock market investors panicked, and the S&P fell 23% on that single day."

"We created the industry's first Balanced Index Fund (1992), the first Growth Index Fund (1992), the first Value Index Fund (1992) and the first LifeStrategy Funds (1994) precursors to our Target Retirement Funds (2003)."

"Target-date funds have proved to be the most powerful fund-industry-changing concept since the money market mutual fund and the index mutual fund."
"Morningstar bills our Growth and Value Index Funds as the first two "strategic beta" funds."

"In my years as CEO, I had never recommended a single fee increase, only those 200-plus decreases."

"In 1992, we again broke new ground with the creation of Vanguard Total Stock Market Index Fund -- destined to become the world's largest."

"Like my foolish opportunistic move in creating Vanguard Specialized Portfolios in 1985, I was wearing my marketing hat rather than my fiduciary hat when I created the Horizon Funds. I hope that my successors and colleagues will learn from my inexcusable mistakes."

"I can unhesitatingly describe Nathan Most's visionary creation of the ETF as the most successful financial marketing idea so far during the twenty-first century."

"While long-term investing is by definition a winner's game, short-term trading -- yes, let's call it speculation -- is by definition a loser's game."

"ETFs are fine, just so long as you don't trade them."

"The broker managing your account doesn't get a commission for a Vanguard fund. He can get his commission for buying you a Vanguard ETF."

"For active equity funds, performance comes and goes, and the public tends to invest in them after they've done well. -- Investors are often their own worst enemies."

"In early 2018, 48 Vanguard funds boasted Morningstar gold ratings, more than the total of 43 for our next four peers combined."

" In the stock market the past is not prologue."

" I received a heart transplant on February 21, 1990. More than 22 years later, I'm doing fine, thank you."

"Ideas are a dime a dozen. Implementation is everything."

"To a considerable extent, the firm's founding values reflect my own personal values: Respect for each human being -- from the highest to the humblest -- whom we meet along the road of life; fair dealing; commitment to one's colleagues and one's career; trusting and being trusted; personal integrity, passion and energy; and service to our client/owners, our communities, and our societies."

"Our "no perquisite" rule: No leased cars, no reserved parking places, no first-class flying, and no executive dining room."

"My firm-wide standard of conduct, applied universally to officers and crew alike: "Do what's right. If you're not sure, ask your boss.""

"Words can take an idea only so far. Deeds make words tangible."

"I care -- and care deeply -- about the fine human beings who have helped me to build Vanguard."

"My boosters in our shareholder base -- most notably "the Boglehead" of the nation's most popular financial website -- continue to write to me almost daily."

"Vanguard now operates 180 mutual funds in the United States alone."

"Warren Buffett is among the most enthusiastic proponents of the Vanguard 500 Index Fund."

"We were aware that in the ideal, the Total Stock Market Index would be the most pristine means for capturing the market's returns."

"Total Stock Market has been a runaway success. With more than $740 billion in total assets, in mid-2018, it is the largest mutual fund in the world."

"The across-the-board superiority of the indexes reflected in the SPIVA Scorecard is astonishing. The S&P indexes outperformed some 93% (!) of actively managed funds in the U.S."

"The continuation of Vanguard's leadership depends upon our deserving it."

"We know that index funds that are focused on broad diversification in the major market sectors, bought and held for the long term, have proved to be the optimal strategy for investment success."

"Believing that the future will closely resemble the past, and ignoring the inevitable uncertainty of investing -- and of life -- is to forget the lessons of history."

"The average annual compensation of independent directors serving on the boards of the five largest mutual fund companies is more than $400,000."

"Of course, Wall Street doesn't care much for index funds."

"Pascal's Wager: Consequences Must Outweigh Probabilities."

"Yes, institutional money managers must truly act as fiduciaries, placing our clients interest above all else."

"I've been cited for decisiveness, resilience, grit, and self-confidence (which, I pray, does not cross the line and become arrogance)."

"We have an army of sly foxes who survive and prosper by knowing many things about complex markets and sophisticated marketing. The hedgehogs in the field know only one great thing: that investment success is based on simplicity, plain service, and honest stewardship."

"As I complete this memoir, "stay the course" is also a splendid rule for fighting our way through the inevitable ups and downs of the short spans of our existence on the Earth, and for enjoying a productive and honorable life well lived."

Thank you, Mr. Bogle for a productive and honorable life well lived!

Best wishes.
Taylor

MORE INVESTMENT GEMS

[bengal22]

Thanks for sharing, Taylor. Wall Street encourages complexity and Mr. Bogle designed simplicity which opened the market to main street.

[frederickj]

To Jack Bogle and Taylor

Thanks for all the inspiration
My next stop- Amazon- to buy Stay the Course and add it to my Bogle library

Frederickj

[nedsaid]

Two people here that I can think of whose advice will be timeless. John Bogle and Dr. Bill Bernstein. Their philosophy is built on a long term perspective and an accurate view of human nature and not on fads, which come and go. You could take Bogle's Little Book on Investing or Bernstein's Three (edit: Four) Pillars of Investing and they will hold up well in 100 years.

Edit: My post didn't even hold up for 3 hours. See below.

[TravelGeek]

You could take Bogle's Little Book on Investing or Bernsteins Three Pillars of Investing and they will hold up well in 100 years.

What happened to the fourth pillar?

On topic, my copy of “Stay The Course” is in the mail. Looking forward to reading it over the holidays.

[Taylor Larimore]

Bogleheads:

Morningstar is currently featuring an article by Kevin McDevitt, CFA: "Have Investors Stopped Chasing Returns?" The Conclusion:

"For multiple reasons, investors seem to be doing more of what experts having been advocating for years: acknowledging their limitations, embracing low-cost, broadly diversified funds, and not chasing past performance (stay-the-course). It’s an encouraging sign."

Have Investors Stopped Chasing Returns?

Best wishes.
Taylor

[nedsaid]

You could take Bogle's Little Book on Investing or Bernsteins Three Pillars of Investing and they will hold up well in 100 years.

What happened to the fourth pillar?

On topic, my copy of “Stay The Course” is in the mail. Looking forward to reading it over the holidays.

Okay then, the FOUR Pillars of Investing. My mistake. The only good thing about having been shown that I was wrong about something is that sooner or later I will be right about something. Just keep posting and maybe something will be correct.

[Taj_Mahalo]

On topic, my copy of “Stay The Course” is in the mail. Looking forward to reading it over the holidays.

Ditto!

[oldzey]

Thank you for taking the time to organize and post the excerpts, Taylor!

Thank you, Jack!

[2015]

Thanks for sharing, Taylor. Wall Street encourages complexity and Mr. Bogle designed simplicity which opened the market to main street.

I beg to differ. Mouthpieces who peddle the fog of complexity in all its forms extend far and wide beyond just Wall Street.

Mr. Larimore and Mr. Bogle have saved many from becoming their own worst enemy by continually preaching the gospel of simplicity.

[bengal22]

Thanks for sharing, Taylor. Wall Street encourages complexity and Mr. Bogle designed simplicity which opened the market to main street.

I beg to differ. Mouthpieces who peddle the fog of complexity in all its forms extend far and wide beyond just Wall Street.

Mr. Larimore and Mr. Bogle have saved many from becoming their own worst enemy by continually preaching the gospel of simplicity.

Sure sounds like you just repeated what I said.
Not sure what you differ on.

[AtlasShrugged?]

One of the most striking quotes I ever heard Mr. Bogle use: Uneasy lies the head that wears the crown. As I have advanced in my career, that truism comes to the forefront of my mind more and more often. Now I understand it.

As for 'Stay the course' - it is the first thing I see in my IPS whenever I open it up. And the first note I see when I look at my notes on the Fidelity website. This has served me particularly well.

[2015]

Thanks for sharing, Taylor. Wall Street encourages complexity and Mr. Bogle designed simplicity which opened the market to main street.

I beg to differ. Mouthpieces who peddle the fog of complexity in all its forms extend far and wide beyond just Wall Street.

Mr. Larimore and Mr. Bogle have saved many from becoming their own worst enemy by continually preaching the gospel of simplicity.

Sure sounds like you just repeated what I said.
Not sure what you differ on.

You're exactly right. I was just making the point that we like to think of noise as existing in all the familiar places, like Wall Street, or "Cramer" or "Suzie" or MSNBC. I see such noise as existing just about everywhere, but particularly from those who engage in marketing disguised as financial "information". That definition goes far and wide in my book. It's interesting to me that Bogleheads will state "ignore the noise" unless it's their own particular brand of noise they're listening to. Taylor is a shining exception.

[oldzey]

I'll add that there's a great photo of Jack on the back of the dust jacket.

[Jeff Albertson]

Here's an interview with Bogle, promoting the new book.

John Bogle: RIAs Are the Future; Trading Is Investors’ Enemy
The Vanguard founder tells ThinkAdvisor about Vanguard's tech glitches, Fidelity's no-fee funds and what's in his portfolio.

https://www.thinkadvisor.com/2018/11/27 ... 1110095843

[nedsaid]

I guess in the light of Vanguard's website glitch, Vanguard has taken Jack's book title to heart. By golly, our investors are staying the course whether they like it or not!

https://www.thinkadvisor.com/2018/10/10 ... -for-some/

[Taylor Larimore]

[Thread merged into here, see below. --admin LadyGeek]

Stay The Course is Mr. Bogle's twelfth and last book published a few months before his death. It is the story of a remarkable man who repeatedly overcame major setbacks, including a heart transplant, to give ordinary investors "a fair shake." Sixteen pages of personal photographs are included.

Forward by Burton Malkiel:

"Many institutions that call themselves "mutual" are mutual in name only. The Vanguard that Bogle created is truly mutual in practice."

I served on the Vanguard board for 28 years. I can attest that every policy that came before the board was resolved by applying a simple criterion: Was the policy good or bad for the individual shareholder?"

"Jack's own research made clear that fees were the most important determinant of investment performance."

"For me, the index fund is unquestionably the most important financial innovation of our time, and it has unambiguously been of enormous benefit to the individual investor saving and investing to achieve a secure retirement."

"According to Standard & Poor's research, over 90% of actively managed funds underperformed their benchmark indexes over the 15-year period ending in 2017."
------End of Forward-----

"For as long as I can remember, I've used the phrase "stay the course' to urge investors to invest for the long term and be diverted by daily sound and fury of the stock market. As you'll see, "Stay the Course" also has been my motto in building Vanguard."

"My request to review the corporate minutes of the Vanguard mutual funds during the long period in which I served as chairman was denied by Vanguard."

"Nobody in 1974 really could have predicted that an upstart firm, founded at the bottom of a vicious bear market, would overcome all odds and not merely survive, but ultimately dominate the mutual fund industry."

"The new organization would be the first -- and to this day, the only mutual mutual fund organization, run on an "at-cost " basis."

"The concept that fund managers could not add value to their clients' wealth, once considered nearly heretical, is now broadly accepted."

"I entered Blair Academy, thanks to a generous scholarship and demanding jobs, first as a waiter, than as captain of the waiters."

"Whatever was in my mind all those years ago (at Princeton), the thesis clearly put forth the proposition that mutual fund shareholders ought to be given a fair shake."

"I first walked into Wellington's Philadelphia offices on July 9, 1951. There I found the perfect environment for the start for my career -- small, friendly and laden with opportunities for a young college graduate."

"The Go-Go era was superseded by something distinctively different, but, as it turned out, even worse: The "Nifty Fifty" craze, in which the stock prices of the nation's fastest-growing companies lost all touch with their intrinsic values."

"During the decade from 1966 to 1976, the Wellington Fund (Mr. Bogle was chief executive) turned in the worst performance of any balanced fund in the land."

"The guiding star of "stay the course" again proved to be an essential aspect of my ability to surmount challenges; weathering the heartaches and disappointments of the years from 1965 to 1974 depended on my dogged determination the stay the course of my career."

"Great long-term rewards can result from small differences in cost" was my simple thesis in creating that precedent-shattering investment strategy."

"Embarrassingly (I guess!), at that time I was not familiar with either the Modern Portfolio Theory or The Efficient Market Hypothesis."

"A midwest brokerage firm flooded Wall street with posters: INDEX FUNDS ARE UN-AMERICAN. HELP STAMP OUT INDEX FUNDS."

"Our mutual structure, has yet to be copied."

"We must never underrate the power of compounding investment returns, and always avoid the tyranny of compounding investment costs."

"Investors holding fast to the simple, broadly diversified investment fund with rock-bottom costs -- the S&P 500 index fund -- would be rewarded with truly remarkable returns ($15,000 in 1976 became $1,127.704 in 2018)."

"In those days (the 1970s) investors who purchased shares of our mutual funds were assessed front-end sales loads of 7.5% to 8.5%. Like nearly all of our peer fund managers, Vanguard's distribution strategy was inextricably linked to stock brokers."

"The yield on the short-term U.S treasury bills, which peaked at above 16% in 1981, fell to only a hair above zero from 2008 to 2015."

"As Vanguard's asset base has risen to higher and higher levels, these operating costs have fallen from 0.25% of Vanguard assets in 1977 to 0.08% in 2018"

"In 2017 alone, we estimate that Vanguard's low costs saved investors $29 billion in fees and expenses."

"Owned by its mutual funds, which in turn are owned by the shareholders of the funds, Vanguard had placed fund shareholders firmly in the drivers seat."

"On October 19, 1987--Black Monday--stock market investors panicked, and the S&P 500 fell 23% on that single day. I loved answering the phones. On Black Monday I took 104 phone calls."

"In recent years, our leadership in technology has been challenged, and dealing with our rapid growth has not been easy."

"The Admiral Funds were a good beginning, but our ultimate goal was to bring down prices on all of our funds. It was not easy, but we got it done."

"Target-date funds have proved to be the most powerful fund-industry-changing concept since the money market mutual fund and the index mutual fund."

"When I held my first meeting with our management to explain my reasoning for starting the new series of index bond funds, none of our senior executives attended. I cancelled the meeting on the spot. My disgust must have been obvious. At the rescheduled meeting, the entire senior staff showed up."

"Like my foolish opportunistic move in creating Vanguard Specialized Portfolio in 1985, I was wearing my marketing hat rather than my fiduciary hat when I created the Horizon Funds. I hope that my successors and colleagues will learn from my inexcusable mistakes."

"I can unhesitatingly describe Nathan Most's visionary creation of the ETF as the most successful financial marketing idea so far during the twenty-first century. Whether it proves to be the most successful investment idea of the century remains to be seen."

"ETFs are just fine, just so long as you don't trade them."

"The broker managing your account doesn't get a commission for a Vanguard fund. He can get his commission for buying you a Vanguard ETF."

"My philosophical belief that great marketing ideas are rarely great investment ideas is being confirmed in the marketplace."

"It's fair to say that, for better or for worse, Fidelity brought modern marketing techniques into the fund industry."

"Investors are too often their own worst enemies (chasing performance).

"In early 2018, 48 Vanguard funds boasted (Morningstar) gold ratings, more than the total of 43 for our next four peers combined."

"Trees don't grow to the sky, and today's stock valuations are close to record highs, with dividend yields near record lows.-- No one can know what returns the future holds in store for investors, but caution would seem called for."

"Just three index fund managers -- Vanguard, BlackRock, and State Street -- are responsible for 80% of all index mutual fund assets."

"Especially during those times of uncertainty, I encouraged investors to "stay the course." During Vanguard's long history, that advice has worked magnificently."

"But we must take care to avoid complacency and continue to stay the course that we established all those years ago."

"In those two-plus decades since the transplant, I remained active--even hyperactive in my work at Vanguard as president of the Bogle Financial Markets Research Center. There we conduct in finance, largely focused on the mutual fund industry."

"In 2018, Vanguard now owns more than 8% of every public corporation in the United States." To me, our role in corporate governance has always been to insure--as best we can--that corporations are managed with the interests of their shareholders as their highest priority."

"Ideas are a dime a dozen. Implementation is everything."

"I have always been inspired by the great leaders of history: Alexander Hamilton, Abraham Lincoln, Theodore Roosevelt, Winston Churchill and Lord Horatio Nelson. (Vanguard is named after Lord Nelson's flagship.)

Our "no perquisite" rule: no leased cars, no reserved parking places, no first-class flying, and no executive dining room."

My firm-wide standard of conduct applied universally to officers and crew alike: "Do what's right. If you're not sure, ask your boss."

"Words can take an idea only so far. Deeds make words tangible. -- I care, and care deeply, about the fine human being who have helped me to build Vanguard."

"My boosters in our shareholder base -- most notably "the Bogleheads" of the nation's most popular website -- continue to write to me almost daily."

"Vanguard now operates 180 mutual funds in the United States alone."

"Warren Buffett is among the most enthusiastic proponents of the Vanguard 500 Index Fund."

"Since 1930 the returns have been identical -- 9.7% annually for the S&P 500 and 9.7% for the total market."

"The across-the-board superiority of the indexes reflected in the SPIVA (15 year returns) Scorecard is astonishing. The S&P indexes outperformed some 93% (!) of actively managed funds in the U.S.."

"We know that index funds that are focused on broad diversification in the major market sectors, bought and held for the long term, have proved to be the optimal strategy for investment success."

"My bet is that the vast majority of investors, informed by their own experience, will come to favor Traditional Index Funds (TIFs) over ETFs."

"Without a single lawyer on either side or a single word in writing, we made the (Primecap) deal."

"The creation of Vanguard Total Bond Market Index Fund was yet another innovation that would come to dominate the world of fixed income investing."

"Fully 2,300 share classes (!) of actively managed bond funds are available only by the payment of sales commission to brokers and investment advisers."

"Don't be fooled into believing that a manager's past performance is prologue to the future."

"As always, understanding the past can keep us from making similar mistakes in the future."

"Stock valuations today are higher than historical norms, investors who are counting on historical rates of return to repeat are likely bound to be disappointed."

"In Chapter 18, I'll focus on the battle to preserve broad-market S&P 500-like index funds from misguided academics whose work threatens their very existence."

"Stock returns are ultimately created by corporations, and the financial system subtracts value from those returns."

"Wall Street doesn't care much for index funds. -- Index funds undercut the notion that actively managed funds enhance the returns of investors; they don't generate advisory fees; and they typically engender little portfolio turnover."

"Pascal, after all, got it right. Consequences must outweigh probabilities."

"The best advice that I know for dealing with the inevitable ups and downs of life, the best times and the worst times alike: This too shall pass away.

"My family has been an utter blessing, giving me a life that is as complete as it could possibly be. The center of ours is Eve, my wife of 62 years. She is loving, kind, strong, smart, and resilient."

"I've been working since I was nine years old, beginning as a newspaper deliverer, store clerk, postal worker, and waiter. I worked my way through school and college waiting on tables."

"Our task is to live productive lives, to raise our families, to contribute to our communities, and to serve our nation and our global society."

"We must remind ourselves each day that "even one person can make a difference."

"I've usually used the phrase "stay the course" as one of the great rules of investment success. -- "stay the course" is also a splendid rule for fighting our way through the inevitable ups and downs of the short spans of our existence on this Earth, and for enjoying a productive and honorable life well lived."

Thank you, Jack!
Taylor

John C. Bogle died January 16, 2019

While some mutual fund founders chose to make billions, he chose to make a difference.

More Investment Gems

[Ben Mathew]

And all in one book!

Trees don't grow to the sky, and today's stock valuations are close to record highs, with dividend yields near record lows.-- No one can know what returns the future holds in store for investors, but caution would seem called for.

This is a reminder to always keep an eye on valuations and yields, and not rely too much on recent historical returns. Historical returns make price run-ups look attractive, while valuations and yields will sound the warning.

[Bruce]

Taylor

Thanks for yet another in your outstanding series of “Gems”.

This one is a bit more poignant since we now know this is the last book we have been gifted from John Bogle.

Your continuing willingness to devote the time to select some of the very best ideas, quotes and thoughts from a book and share them with the rest of us is greatly appreciated!

Looking forward to reading the entire book.

Best regards

[oldzey]

Thank you, Jack!

Thank you, Taylor!

[2015]

...
"I've usually used the phrase "stay the course" as one of the great rules of investment success. -- "stay the course" is also a splendid rule for fighting our way through the inevitable ups and downs of the short spans of our existence on this Earth, and for enjoying a productive and honorable life well lived."

Thank you, Jack!
Taylor

John C. Bogle died January 16, 2019

While some mutual fund founders chose to make billions, he chose to make a difference.

More Investment Gems

A simple, elegant model for living.

Thank you Taylor for this latest Gem. It was only after reading all of your Gems in the link above that I began to stop doing "stupid stuff" (as Charlie Munger would define it).

[Norris]

Thank you, Taylor. Ironically, I received my copy of Jack's last book the day after his passing. I've read it, along with all the others. He will always be my (our) hero!

Norris

[haban01]

Thank Taylor! I will get a copy ordered! Looking forward to it.

[averagedude]

I will be getting this book in the future. Actually who am i kidding, i will probably get this book from the public library because i am cheap. Any book by John Bogle, Burton Malkail, or Taylor Larimore is worth reading. The 3 best authors when it comes to investing.

[Sage16]

I read mine cover to cover right after I received it. A great book by a great man. Thank you Taylor for posting some key points as a refresher. I always look forward to your posts, perspective and wisdom.

[DB2]

I'll have to pick this up.

On a related note, which one of his books goes into the most detail about the Wellington fund? I'm absolutely fascinated around the history of that fund.

[Taylor Larimore]

I'll have to pick this up.

On a related note, which one of his books goes into the most detail about the Wellington fund? I'm absolutely fascinated around the history of that fund.

DB2:
Stay The Course devotes an entire chapter to the Wellington Fund. This is probably the most complete account of any of Jack's books detailing the history of that fund.

Best wishes
Taylor

[LadyGeek]

I merged Taylor Larimore's thread into the on-going discussion.

[Taylor Larimore]

[Thread merged into here, see below. --admin LadyGeek]

Bogleheads:

"Stay The Course" is Mr. Bogle's last book (out of twelve). In this tell-all book, Mr. Bogle shares the story of Vanguard, the Index Revolution, and his inspiring personal insights. Below are a few of this book's "Financial Gems":

"This book tells the story of how my career began, how it was abruptly cut short, and what followed once I resumed that career."

"As long as I can remember, I've used the phrase "stay the course" to urge investors to invest for the long term and not be diverted by the daily sound and fury of the stock market."

"Vanguard's mutual fund structure and index strategy defied convention; together they drove Vanguard to its place as the largest mutual fund complex in the world."

"My request to review the corporate minutes of the Vanguard mutual funds during the long period in which I served as chairman was denied by Vanguard."

"Since our founding in 1974, Vanguard has been focused on lowering the costs of investing."

"Mutual funds, with one notable exception, are not mutual."

"Mr. Morgan--my mentor and the great hero of my long career--was an industry pioneer."

"In the challenges that lay ahead, I would need a guiding star and a motto that encapsulates it. That motto was, and still is, "Stay the Course.""

"The Go-Go era "went-went." It was superseded by something distinctively different, but as it turned out, even worse: The "Nifty Fifty" craze, in which the stock prices of the nation's fastest-growing companies lost all touch with their intrinsic values."

"In the Battle of the Nile Lord Nelson's fleet sank almost every French fighting ship. -- still the most complete naval victory in history. -- I decided that "Vanguard" (Lord Nelson's flagship) would be the name of the firm I would soon create."

"The guiding star of "stay the course" again proved to be an essential aspect of my ability to surmount challenges; weathering the heartaches and disappointments of the years from 1965 to 1974."

"Great long-term rewards can result from small differences in cost."

"There is no question that First Index Investment Trust (the original name of today's Vanguard 500 Index Fund) was the first index mutual fund."

"In those days, investors who purchased shares of our mutual funds were assessed front-end sales loads of 7.5% to 8.5%."

"Vanguard First Index Investment Trust was not a product of complex algorithms or of Modern Portfolio Theory (MPT) or the Efficient Market Hypothesis (EMH)."

"A Midwest brokerage firm flooded Wall Street with posters. Its headline screamed, "INDEX FUNDS ARE UN-AMERICAN. HELP STAMP OUT INDEX FUNDS!"

"We must never underrate the power of compounding investment returns, and always avoid the tyranny of compounding investment costs."

"Investors holding fast to the simple, broadly diversified investment fund with rock-bottom costs--the S&P 500 index fund--would be rewarded with truly remarkable returns."

"The yiéld on short-term U.S. Treasury bills, which peaked at above 16% in 1981, fell to only a hair above zero from 2008 to 2015."

"Performance comes and goes. Costs go on forever."

"Pascal's Wager: Consequences Must Outweigh Probabilities."

"In 2017 alone, we estimate that Vanguard's low costs saved investors $29 billion in fees and expenses."

"In the past two decades, the share of income accruing to the top 1 percent has doubled since the 1970s, while the share of income going to all workers has fallen by nearly 10 percent. I am deeply concerned about these issues."

"On October 19, 1987 - Black Monday - stock market investors panicked and the S&P fell 23% on that single day."

"Most of the investing mistakes I've made during my long career came on those occasions, happily rare, when I removed my investment hat and put on a marketing hat."

"In my years as CEO, I had never recommended a single fee increase, only those 200-plus decreases."

"Target-date funds have proved to be the most powerful fund-industry-changing concept since the money market mutual fund and the index mutual fund."

"Like my foolish opportunistic move in creating Vanguard Specialized Portfolios in 1985 -- I created the Horizon Funds. I hope that my successors and colleagues will learn from my inexcusable mistakes."

"Early in 2018, we also introduced six actively managed factor funds. I've avoided public comment on them, but the media seems to have guessed how I felt."

"I can unhesitatingly describe Nathan Most's visionary creation of the ETF as the most successful financial marketing idea so far during the twenty-first century. Whether it proves to be the must successful investment idea of the century remains to be seen."

"There are now 2,190 ETFs. Based on the S&P 500, the "SPDR" ETF (SPY) has dominated the ETF marketplace."

"Six-plus decades of investment experience have reinforced my basic tenet: Long-term investing is by definition a winner's game, short-term trading is by definition a loser's game."

"I have often said, "ETFs are fine, just so long as you don't trade them."

"I believe that stock trading is ultimately the investor's enemy."

"Yes, investors are getting the message about low-cost investing and acting accordingly."

"For active equity funds, performance comes and goes, and the public tends to invest in them after they've done well. When they falter, as they inevitable do, expectations are dashed."

"Rather than following the industry's practice of charging mutual fund shareholders high fees and passing the profits along to management company stockholders, our low costs mean essentially that Vanguard returns its potential "profits" to the funds themselves."

"While our index strategy has been widely copied (if not always imitated?), our mutual fund structure, now with 44 years of demonstrated success, has yet to find its first follower."

"Given the 2018 introduction of Fidelity's "zero cost" index funds, fees can hardly fall much further."

"Especially during those times of uncertainty, I encouraged investors to "stay the course." During Vanguard's long history, that advice has worked magnificently."

"In those two-plus decades since the (heart) transplant, I've remained active--even hyperactive--in my work at Vanguard as president of the Bogle Financial Markets Research Center."

"In 2018, Vanguard now owns more than 8% of every public corporation in the United States."

"Ideas are a dime a dozen. Implementation is everything."

"The average annual compensation of independent directors serving on the boards of the five largest mutual fund companies is more than $400,000."

"I have always been inspired by the great leaders of history: America's Founding Father, especially Alexander Hamilton, Abraham Lincoln, Theodore Roosevelt, Winston Churchill."

"Loyalty, after all, is a two-way street. -- Hence our "no perquisite" rule: no leased cars, no reserved parking place, no first-class flying, and no executive dining room."

"Caring. That one word summed up my attitude toward our crew and our clients alike."

"We know that index funds that are focused on broad diversification in the major market sectors, bought and held for the long term, have proved to be the optimal strategy for investment success."

"Believing that the future will closely resemble the past and ignoring the inevitable uncertainty of investing--and of life--is to forget the lessons of history."

"The creation of Vanguard Total Bond Market Index Fund was yet another innovation that would come to dominate the world of fixed income investing."

"My boosters in our shareholder base--most notably "the Bogleheads" of the nations' most popular financial website--continue to write to me almost daily. My 11 books (prior to this one) continue to resonate with enthusiastic readers."

"Once you have found friends, never let them go."

I've been working since I was nine years old, beginning as a newspaper deliverer, store clerk, postal worker, waiter and pin-setter in the bowling alley."

"Each of us human beings must be the best we can be, helping others--especially those less privileged -- along the road of life."

"My confidence remains strong that the firm that I founded all those years ago will carry on and uphold the caring values that I did my best to establish."

Thank you, Jack!

Taylor

Jack Bogle's Words of Wisdom: "Stay the Course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you."

[informal guide]

Nicely done Taylor, you are a gem too!

Thank you for your incredible military service, your service to our government, and for at least 25 years in leading the Bogleheads.

[mimiesg]

Many thanks Taylor. I also really appreciate your work and this opportune post.

I'm a novice (BH style) investor and have been thinking about stay the course and what allows an investor to do that and this is what comes to my mind:

1. Having a good emergency fund
2. Minimal debt and sustainable lifestyle
3. An appropriate asset allocation
4. Automated investments across accounts
5. ??

If not already there, may I suggest that it will be good to have something along this line captured in the wiki / checklist of what to do especially when markets turn sour.

[Taylor Larimore]

Many thanks Taylor. I also really appreciate your work and this opportune post.

I'm a novice (BH style) investor and have been thinking about stay the course and what allows an investor to do that and this is what comes to my mind:

1. Having a good emergency fund
2. Minimal debt and sustainable lifestyle
3. An appropriate asset allocation
4. Automated investments across accounts
5. ?? Simplicity

If not already there, may I suggest that it will be good to have something along this line captured in the wiki / checklist of what to do especially when markets turn sour.

mimiesg:

I completed your #5 in red.

Read my "Simplicity" link, below.

Best wishes.
Taylor

Jack Bogle's Words of Wisdom: "Investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense."

[nedsaid]

Taylor should have been an editor at Readers' Digest. I can save lots of money just by reading the Gems and foregoing the book purchase. Good stuff. Thank you.

[abuss368]

Many thanks Taylor. I also really appreciate your work and this opportune post.

I'm a novice (BH style) investor and have been thinking about stay the course and what allows an investor to do that and this is what comes to my mind:

1. Having a good emergency fund
2. Minimal debt and sustainable lifestyle
3. An appropriate asset allocation
4. Automated investments across accounts
5. ?? Simplicity

If not already there, may I suggest that it will be good to have something along this line captured in the wiki / checklist of what to do especially when markets turn sour.

mimiesg:

I completed your #5 in red.

Read my "Simplicity" link, below.

Best wishes.
Taylor

Jack Bogle's Words of Wisdom: "Investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense."

This post speaks to me and has been our focus BIG TIME over the past few years. We have simplified both financially and non-financially and it is paying dividends now. I have also learned that simplicity is NOT a destination but rather a journey.

[abuss368]

Nicely done Taylor, you are a gem too!

Thank you for your incredible military service, your service to our government, and for at least 25 years in leading the Bogleheads.

I could not have said it better! Taylor truly is a “gem”!

Best.
Tony

[abuss368]

“Stay the course” is one of my favorite books. I finished reading this a few months ago and loved it. Could not put the book down.

Buy this book and learn from one of the best investment authorities out there - Jack Bogle!

Best.
Tony

[firedup]

Thank you, Jack! And thank you Taylor for sharing this wisdom!

[abuss368]

I am hoping more books on Jack Bogle and Vanguard are written! Could you imagine a movie?

[secondopinion]

Long-term investing is by definition a winner's game, short-term trading is by definition a loser's game.

Not by definition but by actual results. Market friction, trading fees, bid-ask, etc. make it hardly worth even considering short-term trading. Long-term trading, maybe it has merit. But best returns seem to go to long-term investing.

[Broken Man 1999]

Just my personal opinion, Stay the Course and Enough are Mr Bogle's best books.

IMHO, Enough should be a required read for any business major. Actually for any major.

I wish more newbies would learn about Mr Bogle from reading his books, speeches, articles, etc., as sometimes he is not represented accurately here in this forum. That is a shame, as his written, and spoken body of work is available in many locations.

Broken Man 1999

[CyclingDuo]

Looks like most Vanguard account households stayed the course...

Senior Vanguard Strategist: These Were the Smartest Moves American Investors Made in 2020
https://www.yahoo.com/finance/news/seni ... 58990.html

“Vanguard investors stayed the course during the volatile first half of 2020,” Tom De Luca, senior investment strategist at Vanguard and research lead for the study told GOBankingRates. “Only 22% of households traded, and, of those who did trade, 62% moved assets into equities. During this time of market volatility, less than 1% of households abandoned equities completely, illustrating the benefits of something we have continued to espouse to clients: time in the markets beats market timing.”

CyclingDuo

[LadyGeek]

I merged Taylor Larimore's thread into the on-going discussion.

[djmbob]

Thank you for resurrecting this post.

One quote in particular caught my attention,

"The Go-Go era went. It was superseded by something distinctively different, but, as it turned out, even worse: The "Nifty Fifty" craze in which the stock prices of the nation's fastest-growing companies lost all touch with their intrinsic values."

Has me thinking... but, of course, then I must end that thought with... "Stay the course!"

Cheers,
Ray