The House that Bogle Built: How John Bogle and Vanguard Reinvented the Mutual Fund Industry
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"One of the best financial books of 2011."
"I highly recommend the book for those interested in Bogle, who became the conscience of the industry and the great company he built."
Larry Swedroe, CBS MoneyWatch
John Bogle's journey from financial-industry pioneer to one of its toughest critics
Arguably the greatest shareholder advocate in the history of Wall Steet, John Bogle not only created the first index mutual fund but has become the primary voice for change in an industry plagued by excess and complacency. Bogle stumbled upon mutual funds by accident in 1949 as a college student at Princeton. In his junior year, he read a Fortune article about the burgeoning fund industry that sparked his interest, and he wrote his now famous senior thesis about it.
What began as an intellectual pursuit would turn into Bogle's life mission. The House That Bogle Built chronicles the years of Bogle's development from college whiz kid into a titan of the mutual fund industry and shareholder advocate--highlighting his creation of the Vanguard Group and the Vanguard 500 Index Fund and his frequent battles to shake up the status quo. It takes you through the two decades he spent running Vanguard, until his forced retirement in 1999, and discloses what he thinks about the fund industry today.
Bogle has always stood out for his extraordinary talents in math, analysis, management, and investing. But his most noteworthy trait is his most basic: his humanism in an industry not exactly famous for placing people over profit. It's Bogle's dedication to clients' interests above all else that has earned him the reputation as the "conscience" of the investing industry.
In his ninth decade of life, Bogle is remarkably candid about the role he plays at Vanguard today--and about his opinion of Jack Brennan, his successor. "How do you keep Vanguard a place where judgment has at least a fighting chance to triumph over process?" he asks. Skeptical but never defeatist, Bogle maintains a retired-but-active status at the company, keeping a close watch over those now at the helm of Vanguard.
The House That Bogle Built reveals one of the investing world's most fascinating and complex figures. A dogged advocate of shareholder democracy, he was a self-confessed "dictator" at Vanguard. A brilliant mathematician, he is more interested in people than numbers. Fiercely competitive, he bemoans the cut-throat approach that drives his industry of choice. Always, though, Bogle places the good of the client before anything else--a practice that has become steadily rarer in his business.
The House That Bogle Built provides an insightful look at the past, present, and future of one of today's largest industries, through the eyes of one of its most influential pioneer.
immune system is always going to fight your [new] heart, because it never sees it as part of you but as foreign tissue,” Brozena says. “So we had to increase his immunosuppression, and whenever you do that, you put people at a higher risk for infection. It’s a double-edged sword.” In 2009, Bogle came down with a terrible infection that nearly killed him. “I got a disease called Listeria,” he recalls. “It’s a blood disease. The fatality rate is 50 percent if you are on anti-rejection drugs, which
unnamed funds—one of which was Wellington Fund—had beaten the Dow Jones Industrial Average for 30 years with less volatility than the market.1 The first indexed account was created by William Fouse and John McQuown at Wells Fargo Bank in 1971. Because at the time the Glass-Steagall Act prohibited banks from managing mutual funds, Wells Fargo could not launch an index fund for individual investors. So instead, Wells Fargo started to run institutional index money in a private $6 million account
underwriter and former World War II paratrooper Taylor Larimore posted in Diehards’ “Conversation #1” on March 19, 1998, and has since made more than 24,000 contributions to the forum. St. Jack, being the ministering spirit hovering over this enterprise, has dubbed Larimore “king of the Bogleheads,” while retired graphic artist and former marine Mel Lindauer, who has posted 23,000 times himself, is “the prince.” Laura Dogu, a State Department foreign service officer with 4,000 posts, is the
shareholders at the expense of fund shareholders by charging as much in fees as the market will bear. Or, as the adage says much more poetically: “No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.” As usual with St. Jack, you can replace the word “God” with “fund shareholders” and “mammon” with “fund management.” To avoid this inherent conflict of interest, Vanguard’s
but the remaining results, as he described them, drove home his point about public ownership of management companies: Joining Vanguard among the top three are DFA and TIAA-CREF, both at +50. (More than coincidentally, all three firms are focused largely on index-like strategies.) At number four is T. Rowe Price (+44), followed by Janus (+38) and American Funds (+26). Honestly, I think most objective observers would agree that over the past decade, at least five of these six firms have been