John Bogle on Investing: The First 50 Years

John C. Bogle is to the average investor what Carl Sagan was to the lay astrophysicist---an imparter of knowledge blessed with the ability to make the complex and esoteric both comprehensible and intriguing. From his days at Princeton University in the late 1940s and early 1950s Bogle was a man determined to write the proverbial book on mutual funds. In the 1970s, Bogle established the Vanguard family of mutual funds for the common man and woman. Today, Vanguard is second only to Fidelity among mutual funds in assets under management. More importantly, and unlike its elitist rival, Vanguard boasts a family of impressive no-load funds. Chief among them are index funds which mirror the performance of the leading domestic and international stocks and bonds markets. An insightful financial analyst, Bogle long ago realized that despite all the hype and occasional home run on the part of actively-managed mutual funds, over a reasonable time horizon actively-managed mutual funds generally do not out-perform the major financial indices, indeed they comp[are rather unfavorably. Accordingly, and to the dismay of many alleged market gurus, Bogle proceeded to take the mystery (as well as the fees and charges) out of mutual fund investing for those of us who don't own yachts and villas along the Mediterranean. His no-load indexed funds are a prudent approach for the regular guy and gal who hope to retire with financial security and comfort. His story is a worthwhile read as much for its knowledge and wisdom on mutual fund investing as it is for the author's honesty and integrity. "John Bogle on Investing" is particularly welcomed in light of recent criminal charges leveled against many of our largest mutual funds and investment houses. Bogle writes as he speaks, with authority and sincerity. I highly recommend "John Bogle on Investing."

Bogle is brilliant on so many of the investment issues that matter most to individual investors -- investing intelligently, the fallacy of active management, how the investment-management industry screws its customers and gets away with it, etc. But as good as he is as an investment "guru," he is even better as a writer.His writing combines a deft mastery of mathematics with the ability to lay it out on the page so carefully that you'll wonder how you didn't think of the idea. His prose is simple, concise, and often, funny. Bogle is best in speeches and essays, this book combines a very well selected combination of both. I read other investment literature, and I frequently see the articles and speeches in this book cited. Any interested observer of financial markets, investor wanting to keep from losing his shirt, or professional in the investment management industry would benefit from reading this book. I heartily recommend it!

In this 443-page compilation of 25 of his speeches over the last 25 years, John Bogle effectively addresses topics of interest to both investors and those in business. Fans of earlier books, including his Common Sense on Mutual Funds, and devotees of passive stock and bond index strategies, will enjoy this book.It is especially interesting to read John Bogle's speeches delivered from 1-25 years ago and compare his predictions of the future to what has actually occurred. Comparisons to the market of today can then be made.For example, in a speech given a year following the "great stock market crash of October 19, 1987", John Bogle on p.68 related his analysis of why the market downturn occurred, including these two reasons: (1) stock prices too high (p/e ratios hitting 23 for the S & P 500 index in 1987); (2) some deterioration in the economic outlook, with no progress being made to reduce the Federal buget defict and a whiff of inflation. Sound anything like 2000 and 2001?A more recent speech included in the book, from January 2000, predicting that the market's heady optimism will depart and leave stock market returns of 5.2% or so over the next decade. As John Bogle readily admits, however, anything can happen in the stock market.There are many sections which detail the evolution of, and triumph of, passive indexing over active management. Other speeches provide a historical overview of the founding of Vanguard and its rise over the last 25 years.Business leaders will find inspiration from several speeches delivered with a more personal note, in which he provides perspectives on the need for persistence, the need for lifelong learning, and the desire to build meaning into life through devotion to commitments to others. Very moving is his speech following his receipt of a transplanted heart.More recent speeches by John Bogle, which give you a sense of what can be found in this book (but not the added value of looking at speeches from years past and comparing predictions made to what has actually occurred), can be found at the Vanguard website. Look for the Bogle Financial Markets Research Center.This is not the first book a reader interested in investing should tackle. That honor belongs to John Bogle's 2nd book, "Common Sense on Mutual Funds." Other books should follow, including, perhaps, those by Larry Swedroe, Burton Malkiel, and Bruce Temkin.For those who have already read several books on investing, the speeches in this book provide added perspective and reinforcement regarding the role of passive indexing, the folly of trying to outperform the market over the long term, and the philosophical ideal of service to others through truth and fairness. For these readers I wholeheartedly recommend adding this book to your investment library.

John Bogle is one of the investment legends of American finance. While still a student at Princeton University, he recognized the importance of strategic allocation of long-term investments into common stocks and the potential of creating great results by matching the market, rather than trying to exceed it. Depending on the length of time you choose, around 80 percent of professionally managed portfolios will underperform indexes like the Standard and Poor's 500. This volume contains his thesis, written in 1951, to show the original basis of his important insights. Mr. Bogle brings two dimensions to this volume that are well worth your reflection. First, he is an astute thinker about how the individual investor can make the most money with limited risk. Second, he is a man of great principle, and serves as a conscience for an important segment of our financial industry, the one containing mutual funds. The book primarily presents his ideas in the form of 25 speeches he made over the last several decades organized around four themes:Investment strategies for the intelligent investorThe weaknesses of the mutual fund industryThe experience of Vanguard (the mutual fund firm he founded) in providing good economic returnsPersonal perspectives on life.The investment ideas are consistent with what Mr. Bogle has written in his excellent books, such as Bogle on Mutual Funds:Keep it simple (match the market with an index of common stocks constantly owned)Focus on the potential for economic productivity of public companies rather than on the fluctuations in the prices of their shares (and the negative emotions those fluctuations can generate)Get your investing done in low-cost ways that minimize expenses and taxes (index funds do this)Stewardship should be the guiding principle for the mutual fund company (the client's interests come before the company's interests).I enjoyed seeing these ideas expressed as speeches. They are more powerful in this form because they are more concentrated than in a whole book. In addition, Mr. Bogle is a man of passion, and he lets his passion show in the speeches more than he does in the books. To me, however, the best part of the book was the section on personal perspectives. Later in his life, Mr. Bogle had a heart transplant, and these speeches reflect the changed perspectives that experience has had on his life. If you are like me, you will be touched in important ways by these reflections.One of the great potential benefits of reading this book is to see where the bar can be set in how one man can make a large difference through the clarity and consistency of his life. Mr. Bogle's commitment to inexpensive index funds has added tens of billions in wealth for millions of people. In the future, his influence will probably continue to expand. His principles around the idea of economic stewardship will probably live even longer in peoples' minds. Ask yourself: What needs to be done better about what I do for

John Bogle's latest work is, in my opinion, his best. A compilation of his best speeches and essays from his 50+ years in the industry, it includes his senior thesis examining the mutual fund industry. The most striking aspect of the book is how consistent, from his thesis on, his views have been through the years. Anyone remotely familiar with Bogle can surely recite them by heart--low cost, long-term investing using index funds--but it's truly amazing to find this same message in a speech from 1974, or his thesis from 1949. 50 years later, Bogle is still preaching the same message, and the world is slowly awakening to its wisdom, as more and more investors come to see the inherent beauty of simplicity.Aside from the thesis, Bogle fans might be most interested in the fourth section of the book, which covers topics such as his heart transplant and his views on life and the role of business.Exceptionally well-written and thoroughly informative and entertaining, "John Bogle on Investing" is a truly remarkable book from a truly remarkable man.