The Revenge of John Bogle

I will confess, I do not know what: The Revenge of John Bogle means. But this link explains it to you, those of you of good stock. . .

3 thoughts on “The Revenge of John Bogle”

  1. Ladies & Gentlemen (as well as those who are uncertain)!

    I give you one of ‘Your’ finest, John Clifton (Jack) Bogle; a kind of financial ‘mixed martial arts’ street fighter who was not afraid to tear into ‘the Devils spawn’ that forms and runs the bulk of the financial industry.
    JCB, the Gentleman that fought for the little man whose intelligence was outside of the circle of spin, knowledge and wizardry, that the financial giants used against the little man to grind him into the ground.

    John C. Bogle, the founder and CEO of Vanguard, and the first to offer a Standard & Poors 500 index fund for investors.

    John C. Bogle was a rare individual. An honest man in the ‘world of slime’ that ‘is’ the financial world, who called out his own industry and threw scorn upon it for the exorbitant fees that it charges investors. The same fees that cause investors to do poorly against the market. It doesn’t take much probing to realise that the huge profits financial service firms make are from milking their clients through every fee they can charge. This would be justifiable if these firms actually rendered value for these fees, but they never, if very rarely, do!

    John C. Bogle was the best friend the average investor could have. His wisdom is timeless and works to this day. He knew what he was talking about; his company ‘Vanguard’ carries on the legacy of his wisdom.

    *Some pearls of wisdom from the mouth of John C. Bogle.

    Time is your friend; impulse is your enemy.

    If you have trouble imaging a 20% loss in the stock market, you shouldn’t be in stocks.

    When reward is at its pinnacle, risk is near at hand.

    Time is your friend; impulse is your enemy.

    The most important thing is for investors to have a realistic idea of what future returns they can look forward to in the stock and bond markets, and not in a day or a week or a month, which is idle and futile, but looking ahead to the next decade and seriously considering what rational expectations might be for market returns.

    The stock market’s day-to-day is actually a distraction to the business of investing.

    Don’t assume your retirement provider or money management firm espouses a standard of honesty, full and fair disclosure, or putting its clients’ interests first.

    Don’t try to time your entry.

    Mutual funds can make no claim to superiority over the market averages.

    Indeed, the evidence is compelling that when decade-long real stock returns are inordinately high by historical standards, returns in subsequent decades are likely to tumble; when past returns are exceptionally low, future returns are apt to rise. What it’s all about, it seems, is reversion to the mean.

    The boom and the bust were normal—just two more swings in stock returns over the past century. Reversion to the mean is the iron rule of the financial markets.

    On balance, the financial system subtracts value from society.

    The mutual fund industry has been built, in a sense, on witchcraft.

    As I have earlier noted, the most important things in life and in business can’t be measured. The trite bromide ‘If you can measure it, you can manage it’ has been a hindrance in the building a great real-world organization, just as it has been a hindrance in evaluating the real-world economy. It is character, not numbers, that make the world go ‘round. How can we possibly measure the qualities of human existence that give our lives and careers meaning? How about grace, kindness, and integrity? What value do we put on passion, devotion, and trust? How much do cheerfulness, the lilt of a human voice, and a touch of pride add to our lives? Tell me, please, if you can, how to value friendship, cooperation, dedication, and spirit. Categorically, the firm that ignores the intangible qualities that the human beings who are our colleagues bring to their careers will never build a great workforce or a great organization.

    There’s far too much self-interest. We used to talk about stewardship; now, it’s all about salesmanship. It’s the triumph of marketing over management. Nobody has joined me in this debate because they simply can’t walk the walk. There are billions of dollars at stake. If the industry’s whole reason for being is to rake in more and more fees from investors, it’s pretty hard to say, “I think we should be more responsive to investors.”

    They don’t like my ideas at all. But I maintain that the point of the mutual fund business is to help shareholders capture their fair share of the market’s return.

    If we’ve learned anything from this last decade, it’s that costs are the only predictable thing in investing.

    It’s absurd to think that buy-and-hold is dead. I’ve made this case many times and I’ll make it again. A buy-and-hold group holds 50 percent of every stock in the S&P 500. The other 50 percent is held by those who trade-I call them speculators-who trade among themselves. At the end of a period, the holders will have captured 100 percent of the return while the other group, tossing stocks back and forth, has given away much of the return through fees, fees, and more fees. The simple truth is that long-term investors win as a group and short-term investors lose as a group. It’s pretty black and white. The math is on my side. END*

    I do not apologise to those looking in from the financial sector, in fact I detest those of the same ilk who pry on the financially weak and pretend to be doing them ‘favours’.

    Yours Aye.

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