Thoughts On Jack Bogle's Life & Legacy


As you know by now, Jack Bogle passed away yesterday at the age of 89. Bogle founded Vanguard back in the 1970's and is credited for being the father of index investing. He was an evangelist for not trying to pick stocks (don't look for the needle, buy the whole haystack he said) but just as importantly he was a believer in low cost investing. This belief dominated Vanguard's business model which in turn influenced the entire fund industry saving investors billions. Barry Ritholtz cited Eric Balchunas on BloombergTV today that the amount investors saved thanks to Bogle was $175 billion as of 2016. Let that sink in.

The way I described him in a Tweet yesterday was to say he lived a life of service in the investment industry which is not easy to do. Many (most?) investors are better off for Bogle having been alive even if they'd never heard of him.

He had a very quick and sharp sense of humor. One anecdote I saw this morning (sorry no citation) is that he was due to be the keynote speaker at Morningstar's conference in 1995. He had to back out about a week early to have his heart transplant. He was rescheduled for the same conference in 1996. He opened by saying he'd been scheduled for last year but had a change of heart....

Over the years, one thing that I said about him very regularly is that despite his belief that investors should not worry about trying to time markets, make predictions about important turns in the market or the like he was very good at it. Anecdotally, I observed him being correct with this sort of thing, usually as a function of being painted into a corner on CNBC, far more often than not.

I disagreed with him about foreign investing, he was not a fan. By all means, just owning domestic equities can get the job done but it is potentially a more volatile ride. That reality might fall deaf after years of lousy returns for foreign but I do not believe this concept is dead.

In terms of taking bits of process from various sources to create your own process, Bogle has influenced me a couple of ways. He was one of several who helped me understand the benefits of keeping things simple, or at least relatively simple and when possible, keeping portfolio turnover low. The other form of influence also relates to simplicity in terms of understanding/remembering that a portfolio consisting of one equity index fund can absolutely get the job done in terms of achieving long term financial goals. As I just said the other day, a one fund portfolio is suboptimal for many reasons but it can still get the job done. Various forms of diversification or strategy help with smoothing out the ride which has a lot of benefits but there are diminishing returns from overly complex, overly diversified and so on.

Repeated from above, how many of us get to help millions of people? What a wonderful legacy.