John (Jack) Bogle (1929-2019)
January 16, 2019 11:40 PM   Subscribe

Jack Bogle has died. "If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. In his crusade, he amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing – or, as in our bet, less than nothing – of added value. In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me." -- Warren Buffett, 2016

"He was as disruptive to the investment business as Steve Jobs was to the computer world." -- Rob Arnott

"Jack created more wealth for more people than anyone in the history of investing and probably in its future as well." -- Bill Miller

"He stood for everything good in the business community.” -- Arthur Levitt, former chairman of the Securities and Exchange Commission

Jack Bogle made investing simple, practical and affordable for regular people. He founded the Vanguard Group in 1974; it has grown to become one of the world's largest investment companies, managing about $5 trillion.

He was the first to offer retail investors the ability to invest in an index fund that mirrored the S&P 500 -- an idea that was ridiculed by Wall Street as "settling for mediocrity." Many studies have concluded that, most of the time, most actively managed funds cannot beat passive index funds -- largely due to their low costs.

Bogle was determined to keep costs low. As the company grew and economies of scale reduced costs, the company lowered its fees, eventually producing "the Vanguard effect," effectively compelling competitors to lower their fees in response. In 2016, a Bloomberg analyst estimated that Vanguard had saved average investors one trillion dollars (paywalled, unfortunately).

Bogle preached the value of diversification and long-term investment, not speculation or timing the market. While he appreciated the lower costs of Exchange Traded Funds (ETFs), he disliked that they encouraged frequent trading. In later years, he criticized Wall Street for charging too much and pushing investing fads, earning him the nickname "Saint Jack." (Its meaning was variously sarcastic or sincere.) Morningstar describes him as "a tireless advocate for individual investors and business ethics."

"Vanguard’s simplicity, low cost and transparency on fees made Mr. Bogle a hero to many, who saw him as the champion of the small-time investor." (WashPost) Some fans even refer to themselves as "Bogleheads."

Bogle established his company as a true mutual organization; fund shareholders own the company and share in its success. While Bogle was worth an estimated $80 million, he could have been a lot richer if he had followed conventional Wall Street practice. One of the books he authored is called "Enough: True Measures of Money, Business, and Life."

NYT: "Mr. Bogle regularly gave half his salary to charities. 'My only regret about money,' he said in 2012, 'is that I don’t have more to give away."

Wall Street Reacts

Remembering Jack Bogle
posted by pmurray63 (25 comments total) 34 users marked this as a favorite
 
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While investing surplus money is a luxury and not a substitue for a robust social welfare systen and labor laws, Bogle helped many people avoid feeding "wolf of wall street" broker thieves.

Passive, long term diversified investing of money is a good idea after you have maxed out your contributions to charity and political justice and have decarbonized your lifestyle....
posted by Anchorite_of_Palgrave at 11:59 PM on January 16, 2019 [15 favorites]


But this long run is a misleading guide to current affairs. In the long run we are all dead. --J.M. Keynes
posted by chavenet at 1:44 AM on January 17, 2019


I interviewed Jack Bogle back in my financial-journo days. Down-to-earth, sharp, and dismissive of flashier competitors, he embodied a certain set of Yankee virtues that seems to have been quite rare on Wall Street; he was one of the good guys in that milieu. RIP, sir.

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posted by GrammarMoses at 3:13 AM on January 17, 2019 [15 favorites]


He literally revealed the secret of his field to laypersons.

That always amazed me: he was skilled enough to make a pile selfishly, but instead he shared the key insight with everyone.
posted by wenestvedt at 3:16 AM on January 17, 2019 [10 favorites]


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posted by Gelatin at 4:57 AM on January 17, 2019


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posted by meinvt at 5:09 AM on January 17, 2019


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posted by JoeXIII007 at 5:45 AM on January 17, 2019


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posted by cichlid ceilidh at 6:02 AM on January 17, 2019


Anchorite_of_Palgrave - "Passive, long term diversified investing of money is a good idea after you have maxed out your contributions to charity and political justice and have decarbonized your lifestyle...."

I wonder if more money would go to charity if people didn't donate anything but instead invested wisely throughout their lives then donated everything when they died, or if they donated the max throughout their lives?
posted by Grither at 6:10 AM on January 17, 2019 [3 favorites]


Wait a minute, I don't think there is any "max" contribution to charity. No law against donating it all, no IRS tax treatment designed to stop you.
posted by elizilla at 6:31 AM on January 17, 2019 [1 favorite]


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diehard Boglehead here. Thanks, Jack. I owe you.
posted by Dashy at 6:31 AM on January 17, 2019 [2 favorites]


elizilla, I assume Anchorite_of_Palgrave was referring to the IRS max for charitable contributions to use for deductions, which is something like 50% of adjusted gross income...
posted by Grither at 6:45 AM on January 17, 2019


Bogle was the very rare exception to the rule that someone telling you how to make money in the market must necessarily be trying to make money off of you, else they would just be taking their own advice.

Sometimes I think that humans are just ill-equipped to follow his advice, though; the promise of riches in the casino that is Wall Street, is enough to get many otherwise smart people to ignore where the money to build the casino comes from.
posted by Kadin2048 at 7:04 AM on January 17, 2019 [11 favorites]


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posted by GuyZero at 7:10 AM on January 17, 2019


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I like Vanguard funds very much. Thank you, Jack.
posted by mogget at 7:12 AM on January 17, 2019 [2 favorites]


There certainly is a limit to how much you can donate to charity - the amount of money you have. Jack Bogle had a net worth of $80M. If he really put half of his income to charity, then maybe he gave away $80M in his life.

Had he just done a little bit of cutthroat capitalism and no ongoing donations, he might have accumulated billions of dollars he could have given away at the end.
posted by Hatashran at 7:31 AM on January 17, 2019 [1 favorite]


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posted by Gray Duck at 7:34 AM on January 17, 2019


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posted by skycrashesdown at 7:51 AM on January 17, 2019


Oh... wow. I knew some of this, of course, and I really love my Vanguard fund, but seeing it all laid out like this, seems like we lost a good one.

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posted by sunset in snow country at 8:06 AM on January 17, 2019 [1 favorite]


seeing it all laid out like this, seems like we lost a good one.

We did. But thanks to Jack's evangelism, the approach and the low-cost index funds are here to stay.

He could easily have kept it to himself, or just in his own circle. But he spread it to the point where it's embedded in the financial world. It will outlive him, and that's the best legacy and estate that anyone can hope to leave.
posted by Dashy at 8:29 AM on January 17, 2019 [5 favorites]


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I am immensely grateful that I found John and the Bogleheads when I inherited my small portfolio of investments. Had I listened to the “wealth manager” at the brokerage, it would all be gone by now.

Thank you John.
posted by jabo at 8:30 AM on January 17, 2019 [1 favorite]


Passive, long term diversified investing of money is a good idea after you have maxed out your contributions to charity and political justice and have decarbonized your lifestyle....

Can't decide whether it's awesomely liberating or just sad to assume you'll drop dead the moment you stop working and thus have no need to worry about funding any sort of lifestyle in retirement.

I don't idolize capitalists, but Bogle was the founder of the modern school of Don't Be a Sucker investing. Respect.
posted by praemunire at 8:50 AM on January 17, 2019 [4 favorites]


The Bogleheads forum and wiki (often recommended on Ask Metafilter) is such a great resource.
Rest in power, Mr. Bogle.
Thanks for this post, pmurray63.
posted by cynical pinnacle at 11:11 AM on January 17, 2019 [1 favorite]


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posted by Cash4Lead at 12:51 PM on January 17, 2019


I never tire of recommending Matt Levine's Money Stuff column for its dry wit, and here (in section 2) is his commemoration:
... And then there is the simplest solution, which is Just Buy All of the Stocks and Don’t Worry About It, and amazingly it works really well. ... It puts the findings of modern academic finance to work in the simplest and dumbest-sounding way, and—despite being both so simple and derived from financial academia—it really works.

Anyway here are some obituaries of Bogle from my Bloomberg Opinion colleague Joe Nocera, from the New York Times, and from Vanguard. And here is a Bloomberg article rounding up other investment professionals’ remembrances of Bogle, which seems like the most appropriate way to commemorate a man whose great innovation was finding a way to aggregate the wisdom of the market and make it available to everyone.
posted by RedOrGreen at 8:36 AM on January 18, 2019 [3 favorites]


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