John Bogle on Investing: The First 50 Years [Hardcover]

Paul A. Volcker (Foreword), Paul Volcker (Author)

Book Description

Publication Date: September 13, 2000 | Series: Great Ideas in Finance

This work chronicles John Bogle's - the founder and former senior chairman of the Vanguard Group - 50 years in the financial services industry. His university thesis on the role of an investment company is included, along with speeches made by him over the past 40 years. The themes of investing for the long term, the importance of indexing, the critical effect of costs on investment returns, and the importance of diversification, are all covered.

Editorial Reviews

From Publishers Weekly

The author of two classic books, Bogle on Mutual Funds (1993) and Common Sense on Mutual Funds (1999), Bogle has been a strong voice for sensible, efficient, honest financial management throughout his career. In 1951, for his undergraduate economics thesis at Princeton, he wrote the first comprehensive analysis of the modern mutual fund. He then spent 25 years working in the fund industry before founding Vanguard, and another 25 years running that company. This omnibus begins with the 1951 thesis and includes articles and speeches over the next half-century. Unfortunately, 17 of the 26 chapters are speeches from the two years leading up to publication, which are really the same recycled speech with a few introductory paragraphs tailored to the audience. The older material, especially the thesis and a 1975 speech about the founding of Vanguard, will be extremely interesting only to Bogle's biographer and to Ph.D. students writing about the history of the mutual fund industry. General readers will be impressed with Bogle's consistency, though that is hardly adequate reward for 480 pages of mostly dull reading. (Nov.)
Copyright 2000 Reed Business Information, Inc.

From Booklist

Bogle made news last year when he unsuccessfully challenged the mandatory retirement policy at Vanguard Group, the mutual funds investment company that he founded in 1974 and that he continued to serve as senior chairman. Bogle has always been well regarded by the press and by Vanguard's 14 million shareholders. He pioneered both no-load and index investment funds and he constantly criticized other companies for their high fees and service charges. The inaugural title in McGraw-Hill's Great Ideas in Finance series, this collection is a fitting tribute to Bogle. It consists of 25 speeches that he made throughout his career. These cover investment strategy, the mutual fund industry, and Bogle's view of human values and the philosophy of investing. Five of the speeches were made before general audiences; one is a high-school commencement address; another discusses organ donation (Bogle is the recipient of a heart transplant). The book concludes with the text of the dissertation Bogle submitted for graduation from Princeton University in 1951; it sets out the ideas that led to the formation of Vanguard nearly a quarter century later. David Rouse
Copyright © American Library Association. All rights reserved

See all Editorial Reviews

Product Details

• Hardcover: 455 pages
• Publisher: McGraw-Hill Companies; 1st edition (September 13, 2000)
• Language: English
• ISBN-10: 0071364382
• ISBN-13: 978-0071364386
• Product Dimensions: 9 x 6.1 x 1.6 inches
• Shipping Weight: 2 pounds
• Average Customer Review: 4.9 out of 5 stars  See all reviews (12 customer reviews)
• Amazon Best Sellers Rank: #642,554 in Books (See Top 100 in Books)

More About the Author

John C. Bogle (Bryn Mawr, PA) is Founder of The Vanguard Group, Inc., and President of the Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as Chairman and Chief Executive Officer until 1996 and Senior Chairman until 2000. He had been associated with a predecessor company since 1951, immediately following his graduation from Princeton University, magna cum laude in Economics. The Vanguard Group is one of the two largest mutual fund organizations in the world. Headquartered in Malvern, Pennsylvania, Vanguard comprises more than 100 mutual funds with current assets totaling about $742 billion. Vanguard 500 Index Fund, the largest fund in the group, was founded by Mr. Bogle in 1975. In 2004, TIME magazine named Mr. Bogle as one of the world's 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award. In 1999, FORTUNE designated him as one of the investment industry's four "Giants of the 20th Century." In the same year, he received the Woodrow Wilson Award from Princeton University for distinguished achievement in the nation's service."

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Most Helpful Customer Reviews

82 of 84 people found the following review helpful

5.0 out of 5 stars The Whole Bogle in Bite-Sized Bits November 22, 2000

By Donald Mitchell HALL OF FAMETOP 100 REVIEWERVINE™ VOICE

Format:Hardcover

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 investor

The weaknesses of the mutual fund industry

The experience of Vanguard (the mutual fund firm he founded) in providing good economic returns

Personal 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 a living? Then ask yourself: How can I help make those things happen? Let John Bogle's example illuminate and inspire your journey.

May you compound your success peacefully and constructively, like your indexed investments do! Read more ›

66 of 71 people found the following review helpful

5.0 out of 5 stars Another Bogle Classic September 21, 2000

By A Customer

Format:Hardcover

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.

18 of 18 people found the following review helpful

5.0 out of 5 stars Interesting Perspectives on Markets, Business, and Life May 6, 2001

By Ron A Rhoades

Format:Hardcover

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. Read more ›

5 of 5 people found the following review helpful

5.0 out of 5 stars Bogle Reflects Integrity In A Sea of Financial Doubt November 19, 2003

By bix lang

Format:Hardcover

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." Read more ›