jack bogle thesis pdf

John Bogle on Investing

Description.

John Bogle on Investing is the first comprehensive review of the career and contributions of this dynamic investing icon. From Jack Bogle's never-before-published 1951 Princeton thesis to more than two dozen essays covering five decades of investing, it is a 50-year compendium of the work and wisdom of one of the world's most important financial figures.

Investors at all levels will profit from insights including:

• Recommendations for ensuring 100% of market returns
• Thoughts on indexing­­from the "Father of the Index Fund"
• Ways to keep today's turbulent markets in perspective

Praise for the International Bestseller Bogle on Mutual Funds :

"Any investor who owns or is thinking of owning shares in a fund should read this book cover to cover." ­­Warren Buffett, Chairman, Berkshire Hathaway Inc.

"This book sets the ultimate benchmark for all how-to-invest books." ­­Peter L. Bernstein, Economic Consultant, Author, Against the Gods

"A long-time student of the mutual fund industry, Bogle is both its harshest critic and its greatest friend. He is, in effect, the conscience of the industry..." ­­Don Phillips, CEO, Morningstar

Kindle Book

• Release date: September 13, 2000

OverDrive Read

• ISBN: 9780071374514
• File size: 1422 KB

Kindle Book OverDrive Read PDF ebook Kindle restrictions

Business Finance Nonfiction

Publisher: McGraw Hill LLC

Kindle Book Release date: September 13, 2000

OverDrive Read ISBN: 9780071374514 Release date: September 13, 2000

PDF ebook ISBN: 9780071374514 File size: 1422 KB Release date: September 13, 2000

• John C. Bogle - Author
• Formats Kindle Book OverDrive Read PDF ebook Kindle restrictions
• Languages English

Why is availability limited?

Availability can change throughout the month based on the library's budget. You can still place a hold on the title, and your hold will be automatically filled as soon as the title is available again.

The Kindle Book format for this title is not supported on:

• - Kindle DX
• - Kindle Keyboard
• - Kindle Paperwhite
• - Kindle Touch
• - Kindle Voyage

Read-along ebook

The OverDrive Read format of this ebook has professional narration that plays while you read in your browser. Learn more here.

Recommendation limit reached

You've reached the maximum number of titles you can currently recommend for purchase.

Session expired

Your session has expired. Please sign in again so you can continue to borrow titles and access your Loans, Wish list, and Holds pages.

If you're still having trouble, follow these steps to sign in.

Add a library card to your account to borrow titles, place holds, and add titles to your wish list.

Have a card? Add it now to start borrowing from the collection.

The library card you previously added can't be used to complete this action. Please add your card again, or add a different card. If you receive an error message, please contact your library for help.

John Bogle on Investing: The First 50 Years by

Get full access to John Bogle on Investing: The First 50 Years and 60K+ other titles, with a free 10-day trial of O'Reilly.

There are also live events, courses curated by job role, and more.

T HE P RINCETON T HESIS

A S I RE-READ MY thesis “The Economic Role of the Investment Company,” from cover to cover, three things struck me. First, it wasn't too bad! While the quality of the writing was hardly first-rate, it seemed quite serviceable and comprehensible, especially considering that I was a not-particularly-mature young man but 21 years of age, and that it was my first major writing project. The organization seemed about right too, and the research—in a field where data were scarce—remarkably complete. * I'm not sure that I would place the thesis in the high honors category, but I surely reveled in that outcome all those years ago.

In retrospect, I wish that I had done more research on the extent of the mutual fund industry's success in serving investors, and, in particular, that I had evaluated fund investment performance more comprehensively. First, I accepted at face value the industry's claim that, as cited in my thesis, “the attainment of objectives is proof of good management,” and ignored the perhaps inevitable vagueness of most funds’ goals. (It's difficult to refute a claim, as made by one fund that I cited in the thesis, of having provided “reasonable dividends, profits without undue speculation, and conservation of capital,” worthy as those objectives are.) But the kind of comparative data we take for granted today were then almost three decades away. ...

Get John Bogle on Investing: The First 50 Years now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Don’t leave empty-handed

Get Mark Richards’s Software Architecture Patterns ebook to better understand how to design components—and how they should interact.

It’s yours, free.

Check it out now on O’Reilly

Dive in for free with a 10-day trial of the O’Reilly learning platform—then explore all the other resources our members count on to build skills and solve problems every day.

• Get 7 Days Free

Was Bogle’s Princeton Thesis Eerily Prescient?

Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, describes the Bogle Effect and the serendipitous shaping of the Vanguard founder’s career.

On this episode of The Long View , Eric Balchunas joins us to discuss the beginning of Vanguard and his latest book, The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions. Here are a few excerpts on the Bogle Effect and the storied history of Vanguard and Bogle's career from Balchunas' conversation with Morningstar's Christine Benz and Jeff Ptak:

The Bogle Effect

Benz: So, Jeff referenced that your book is called The Bogle Effect, and you've referenced this in your remarks so far. But what is the Bogle Effect, in your opinion? Balchunas: I used to use the phrase where I think—I still do—the Vanguard Effect. When you see Schwab lower their fees and then BlackRock and Fidelity, it's sort of all a byproduct of Vanguard and having to compete with them. So, we used to call that the Vanguard Effect. And as I explored this book, I had a few different titles in mind. But I wanted to put his name first and foremost, because I felt like without this guy himself none of this would have happened. And then, obviously, with the Vanguard ownership structure was very unique. So, those two things I thought were the core catalysts to all the change we see. Index funds merely a byproduct of that initial core. And the effect is just generally the ripple effects across all of the industry. And as I just mentioned before, it's well beyond index funds. Obviously, Vanguard has active funds. The passive funds are actually changing the way other active funds behave. It's getting more concentrated so they can complement Vanguard. Vanguard is getting into wealth management. Wealth management has them getting into private equity. So, you go on and on, and you realize that this is going to be a big deal for a long time. It's not just a passive thing or an index fund thing. And so, I really wanted to put the spotlight on Bogle's character and uniqueness and the structure's uniqueness and build from there and give that the credit for the explosion that is going to continue to ripple out through the whole enchilada.

Pivotal Moments in Bogle’s Past

Ptak: In the book you trace Bogle's life career and long arc. So, I wanted to focus for a moment on the early stages of his life and career. Bogle, he came from what had been a wealthy family, but he didn't lead a life of privilege as a young person. How do you think those early life experiences set him on his future course? Balchunas: I think they were pivotal. I think a couple of things maybe later were equally as pivotal. But obviously, your childhood is major. First of all, he was always working. He was a scholarship kid. He had a taste or a sniff of the Great Depression. I always tell people, like especially my mom and my family, I would say, "Visiting Jack Bogle was like hanging out with my grandfather, not my father." He was not a boomer. He was a World War II-type guy. He had the same sense of humor. The office had like pictures of warships and stuff, just like my grandfather. And that generation was very thrifty generally. They had just seen things that the rest of us haven't. And I think he had enough of that that was a nice core for him. And obviously, working off of scholarships, he had to work, doing all kinds of jobs, including setting bowling pins. And in my life, as I've met people who had to work through college, they tend to be the most successful people. That's a really good ethic to begin with. So, I think thriftiness was important. Obviously, that paid dividends later. And in fact, I do think there was some genetics at work though. His great grandfather was a populist fighter of insurance companies. And Bogle lists some of his great grandfather's speeches in one of his books. And it's fascinating how similar their language is. His great grandfather was the one who said, "Gentlemen, cut your costs." He just copied it. So, there was some genetics at play, I believe, and of course, obviously, the environmental aspects that I said as well. And I think his father was not a great achiever; he didn't achieve a lot and had trouble holding down a job. And I think that also probably sparked Bogle to want to make something of himself.

Bogle’s Princeton Thesis

Benz: The academic thesis that Bogle wrote when he was a Princeton undergraduate was eerily prescient. Can you talk about the main thrust of the argument he made in that thesis? Balchunas: It really is something how the seeds of Vanguard are in there. Basically, he wrote this thesis that says something along the lines of future growth can be maximized by reducing sales charges and management fees. Funds can make no claim to superiority over the market averages. And the principal role of the investment company should be to serve its shareholders. That's pretty good. That definitely gives some credence to the way Bogle wrote the rest of his life, because circumstance definitely played a big part, but Bogle would put himself as the hero. And some people will push back against that, and there's definitely some truth there. But those core statements are pretty much the foundation of Vanguard. A lot of things had to happen first, but they're right there. And one interesting tidbit about the Princeton thesis—two of them. One is, he was looking for an idea for the thesis in the library at Princeton. He didn't know what he was going to write about. And he picked up Fortune. And there was an article on mutual funds in that magazine. And it was deep in the magazine, and it wasn't on the cover. You had to be curious to get it. I think his curiosity and reading a lot helped him a lot in his life. In addition, I looked at what was on the cover of other magazines at the same time and Time magazine at the time had Conrad Hilton on the cover. So, I do imagine what if he picked up Time instead? It's interesting how two different paths—he maybe had been a low-cost hotel guy. But the other thing that's interesting is Michael Lewis—I interviewed him for the book—and Michael Lewis has a binder he keeps. And when I told him this, he goes, "Wow. I got to print that out because I have a binder that I keep of Princeton thesis that have changed the world." I'm not sure if he is planning to write a book about it. But the atom bomb was first devised in a Princeton thesis; Teach for America. And there's this history of Princeton thesis having a lot of things that were seeded right there that became actual major accomplishments or events or ideas that formed.

The Serendipitous Start of Bogle’s Career

That's fascinating. You mentioned serendipity and the role that it played in his choice of thesis. I wanted to talk about another somewhat odd confluence of events. This one took place when Bogle was working for his first employer, which was Wellington Management Company. Can you talk about what happened when Bogle was working there and how that, in essence, brought Vanguard into being?

I'll try to keep this as short as possible because it is a long story literally. And part of the challenge of writing this book was to condense this so I didn't bore the non-nerd people. And I kept rewriting this section, so my mom understood it. Because you can get lost in the weeds here with structures and mutual funds versus the investment advisor. But the long story short is, Bogle in the ‘60s was given control of Wellington by his boss at a young age. So, he was running Wellington at age 35. And they were having problems, because in the ‘60s, it was like this past decade where the arcs of the world were crushing it, and boring investors were really having a tough time. And Wellington was more on the boring side. It was conservative. It was a balanced fund. And so, in order to, as Bogle puts it, "I was selling nutritious bagels, but everybody wanted donuts." He figured he'd have to sell donuts.

So, he went over and looked out to partner with an equity manager. And it's interesting. He went through a bunch that said no—Capital Group, Franklin—and I think the fifth or sixth one that he chose was Thorndike, Doran, Paine and Lewis. And they remind me a lot of ARK. They were a high-flying growth manager that was just crushing it. Some of those stocks like Xerox back in the day were like the Teslas of their day. And so, for a while, it worked. It was a good partnership. The flows started coming back in. But then, the bear market hit. And these guys had a real falling out. And I think Bogle felt like he had betrayed his mentor and the company by selling out and giving these other hotshot growth managers too much power in their partnership. They had effective voting control. So, they got into a fight, fingers were pointed, and basically, they fired Bogle.

And so, instead of going off and licking his wounds, like I probably would have done, he basically fought back, and he found a little leverage, which was that he was still the president of the mutual funds themselves. And so, there's this wonky detail that the mutual funds are like shell companies, and the president of those funds actually had some control over—they're like general contractors; they can decide who is doing what role. So, he used that leverage to basically dig in and fight with them. Over the next couple of months, they had a lot of, they called the bifurcation period, and ultimately, the board of the fund said we need a solution. So, Bogle had to come up with a solution that would make everybody happy and somehow pass the board, which had some of his new partners on it, but also some of his older Wellington people who are fans of Bogle, but it had to be unanimous.

Anyway, long story short, what they decided and what Bogle came up with, was the idea to create a back-office company that would just do the boring stuff that Wellington didn't want to do. And they wanted to manage money; OK, fine, you do that. We'll keep you as investment advisor; we'll do all the back-office stuff; I'll run that company. And by the way, we'll make it mutually owned. That way, nobody thinks I'm trying to get out of here and put a bunch of money in my pocket. And so, that's how Vanguard was born as the sort of boring, mutually owned back-office company. And it was just a way to save his job in a way and appease all these different parties so they would be able to resolve this nasty, really unusual situation. I think you're right that that is very serendipitous. And I think it was a great study in just how sometimes the best things come from the worst experiences, and I would say this is a great example of that.

This article was adapted from an interview that aired on Morningstar's The Long View podcast. Listen to the full episode .

More in Funds

How do fundamentally weighted etfs implement contrarian bets.

This Vanguard Fund Is a Top Choice for Value Investors

13 Top-Performing Large-Value Funds

About the author.

Jessica Bebel

Jessica Bebel is an associate multimedia editor on Morningstar's editorial team. She works on content for a variety of audiences, focusing on the individual investor.

Bebel holds a bachelor's degree in biopsychology, cognition, and neuroscience from the University of Michigan.

Is the Era of Volatility-Suppressing Policies Possibly Over?

How anti-obesity drugs are innovating the healthcare market, can the fed declare victory on inflation, ed slott: how rules on eligible designated beneficiaries changed for inherited iras, how the tokyo stock exchange is pushing for better shareholder returns, how much does wealth affect your well-being, can converting to a roth ira reduce future rmds, the role of market movements in your portfolio, how much investment is the right amount, ed slott: how to report rollovers the right way, sponsor center.

• Search Search Please fill out this field.
• Fund Trading
• Index Trading Strategy

John Bogle Reading List: 5 Books by the Father of Index Funds

Vanguard founder John C. Bogle , who changed investing forever for ordinary Americans, wrote a dozen books over his lifetime, selling over 1.1 million copies worldwide.

“I don’t think there’s an author who spent greater care on the words he chose,” an editor who worked with Bogle told the Philadelphia Inquirer. “When he did a book, he was so meticulous; he’d rewrite and rewrite. He always went the extra mile to make there wasn’t a single person who could not understand what he was saying.”

"Saint Jack," as he was referred to by many, made it his mission to educate people about the benefits of index funds and not paying high fees to mutual fund managers. These are some of the best books he authored.

Investopedia / Hugo Lin

1. Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor

The first edition of this classic was published in 1999, but Bogle wrote a completely updated second edition a decade later to help investors understand mutual funds and how his simple and low cost investing strategy can be used to outperform stock pickers.

Don Phillips, President & CEO of Morningstar, said: "it may well be the best book ever on mutual funds." Among the other countless fans of this book Jim Cramer and Byron Wien.

2. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

This 304-page hardcover book is one of Wiley Publishing's Little Book investing series and has proved to be an incredibly popular tool for investors. In this investing bible, Bogle presents his ideas succinctly for the layman.

Warren Buffett advised in his 2014 letter to shareholders that rather than listen to "siren songs" of advisors, "investors – large and small – should instead read Jack Bogle’s  The Little Book of Common Sense Investing ."

Bogle said even he needed to be reminded of his own advice in trying times. “How do I feel when the market goes down 50%?” he said when he spoke with Tony Robbins. “Honestly, I feel miserable. I get knots in my stomach. So what do I do? I get out a couple of my books on ‘staying the course’ and reread them!”

We imagine he grabbed this one to go over a few key mantras.

3. The Battle for the Soul of Capitalism

John Bogle was a vocal critic of Wall Street and the American financial system, and in this book the insider revealed what he knew about the unethical practices of money managers and corporate executives that cost millions of small investors.

The New York Times called it "yet another important contribution in an illustrious career," and it was longlisted for the Financial Times's Business Book of the Year Award in 2005.

4. John Bogle on Investing: The First 50 Years

Bogle's senior thesis at Princeton University was titled "The Economic Role of the Investment Company," and it contained the very ideas that Vanguard would be built on. It is included in this compilation of his best speeches.

Another great resource for his speeches is his official website (a Wordpress site) that has transcripts for as far back as 1977.

5. Stay the Course: The Story of Vanguard and the Index Revolution 

At the time of publication, Vanguard had more $5 trillion in assets under management, but the road to that number wasn't easy. Early on it was dubbed "un-American" and mocked by Wall Street professionals.

Named after his most iconic piece of advice, Bogle's last book is a memoir that traces the history of the Vanguard Group and provides new details. He addresses his critics, his regrets and even his Vanguard successors.

Vanguard. " Vanguard Announces the Passing of Founder John C. Bogle ."

The Philadelphia Inquirer. " John Bogle, Who Founded Vanguard and Revolutionized Retirement Savings, Dies at 89 ."

CFA Institute. " John C. Bogle: Profile of an Industry Leader ."

Amazon. " Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition ."

Amazon. " Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor ."

Amazon. " The Little Book of Common Sense Investing: The Only Way To Guarantee Your Fair Share of Stock Market Returns (Little Books, Big Profits) ."

Berkshire Hathaway Inc. " 2014 Annual Report ." Page 19.

Tony Robbins, Peter Mallouk. " Unshakeable: Your Financial Freedom Playbook ," Page 38. Simon and Schuster, 2017.

Amazon. " Battle for the Soul of Capitalism ."

Financial Times. " Best Business Books 2005 ."

The New York Times. " Mistrust Funds ."

Princeton University. " The Economic Role of the Investment Company ."

Amazon. " John Bogle on Investing: The First 50 Years ."

Amazon. " Stay the Course: The Story of Vanguard and the Index Revolution ."

BBC. " Jack Bogle: The Man Who Pioneered Index Investing ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices