The Vanguard Group Founder – John Bogle

Thanks to Rob’s last comment, I received new materials to read and learned of a new individual who is respectable. We always hear about index fund, and people buying funds with Vanguard. Well, John Bogle is the retired CEO of The Vanguard Group and advocate of index fund.

Here is the link to the excellent “Enough” commencement speech by John Bogle, left by the courtesy of Rob.

Here is the book Rob mentioned, Enough: True Measures of Money, Business, and Life (affiliate link), which I will definitely pick up a copy to read.

Besides that, John Bogle also has an informing interview with Bill Moyers. The videos are on YouTube. Here are the links:
John Bogle on Bill Moyers, 9-28-07. I
John Bogle on Bill Moyers, 9-28-07. II
John Bogle on Bill Moyers, 9-28-07. III

But you know the saddest part I found is? It is that these three videos have only about 1000 views each over a year, when someone crying about Britney Spears get hundreds and thousands views in a few days.

Here are some quotes I chose with my side comments on some:

Quotes From Part 1

  • We’re a bottom-line society, and we are measuring the wrong bottom-line.
  • There is no accountability [from business to the public] and it’s wrong. It’s fundamentally a blight to our society.
  • In response to “And we’re talking about some of the most powerful names in the business…. [They’re] Respectable citizens, right?”, I’m not sure about that. (Me: LOL)
  • Greed has a role in a capitalistic society but not the dominant role.
  • You gotta provide good products and services at a fair prices, and that’s the long-term. That’s what businesses do in the long-term.
  • Profession is the service to the client before the service to self. (Me: Some people can no longer call themselves professionals by this definition…)
  • We became a financial economy, which has overwhelmed the productive economy to the detriment of investors, and the detriment, ultimately, of the society.
  • If you didn’t make 129 million dollars last year, you don’t rank among the highest paid 25 hedge fund managers… What is enough here? (Me: A question to ask not just to the hedge fund manager but to all of us.)
  • And of course he compared the current U.S. to Rome: We have our own bread and circuses. And they’re a little different than the bread and circuses they had in Rome. But, we surely have our circuses whether it’s sports teams or casino gambling or the lottery in the states. (Me: REALITY TV!!!)
  • And, the short term focus ultimately betrays the very values that we have come to be used to in this great nation of ours.

Quotes From Part 2

  • It wasn’t that many years ago — maybe a couple of generations ago — that if you wanted something, you saved for it. And when you completed saving for it, you bought it. Imagine that.
  • The productive system adds to the value of our economy. And, by and large, the financial system subtracts. And, yet, it’s growing and growing and growing.
  • [About the dramatically disproportionate distribution of wealth] You can only have so much of an advantage to those at the top of the pyramid, and so much disadvantage that’s at the bottom of the pyramid, before you start to get some very difficult things going on.
  • Ultimately, the system will correct. The bigger the boom, I fear, the bigger the bust. (Me: The way things are going, we’ll probably get a Big-Mac-sized bust.)
  • They’ve [money managers] come from eight percent ownership of American business to 74 percent ownership of American business. It’s staggering, over unbelievable change. (Me: I definitely want to ask “What is enough?” to these people.)
  • In the first 15 years I was in this business, the average mutual fund held the average stock for seven years. Call that long term investing. Now, the average mutual fund holds the average stock for one year.

Quotes From Part 3

  • What we’ve done is have you know, what I call in the book, a pathological mutation of capitalism from that old traditional owners’ capitalism to a new form of capitalism, which is manager’s capitalism. The evidence is quite compelling that today corporations are run in a very important way to maximize the returns of its managers at the expense of its stockholders. It’s the CEOs. (Me: The raise that workers never got, we can only guess where they are.)
  • The ironic part of that is they [the workers who contributed] often get laid off — used to be called downsizing. But, of course, in today’s America, it’s called right sizing. (Me: Damn politically correct terms, or should I say “in denials” or “pretentious”. If you have the gut to fire someone, have the gut to say it.) They get laid off. That reduces expenses. That increases earnings and that means the CEO gets more.
  • I’m perfectly willing to give a high value, for example, to art and poetry and literature. (Me: I love this guy.) They add value to society. It may not be easy to measure it in a society that measures too much of what’s not important. And not enough of what is important. As the sign in Einstein’s office says, “There are some things that count that can’t be counted. And some things that can be counted that don’t count.”

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