It makes sense that some of the most successful people in life are also very passionate about what they do. This is indeed the case with John Bogle. He is the creator of the Index fund, founder of the Vanguard group, a prolific writer and passionate shareholder activist. Friday John Bogle becomes an Octogenarian. Not bad for a guy who is on his second heart. He is a regular on the network business shows and often quoted in the Wall Street Journal. At 80, he is very much in demand. What keeps John so vital is his passion. His life story is worth reading. His senior thesis at Princeton in 1951 titled, “Mutual Funds can make no claims to superiority over the Market Averages” led to one of the top innovations in investing, the Index fund.It took more than two decades and a big career humiliation (he was fired) for Bogle to return to the idea of that thesis.
Out of the ashes of career number one, came the birth of the Vanguard Group and soon after the first Index fund. Index funds mirror market indexes and, therefore, do not need active management, resulting in lower fees. They are commonplace today, but in 1975 they were downright subversive. Bogle told me he was called un-American. Worse, he was laughed at. His critics couldn’t imagine why anyone would settle for average returns. Bogle’s theory is simple; instead of trying to beat the market – be the market. Beating the market over a long time horizon he says is incredibly difficult and something the average fund manger will never be able to do. Turns out he had exactly the right product at the right time. The little $11 million dollar fund blossomed into a $100 billion fund in under 25 years.
All of that is impressive, but it is Bogle’s passion for exposing the laziness and greed of the financial services industry that makes him a legend. High fees are just the beginning of his grievances. Ask him about corporate governance or about shareholders rights and you will really get him going. His books are a great introduction to this smart guy who is not afraid to drain the pool to show the rest of us who is swimming naked in the financial services industry. That willingness to expose the sins of Wall Street hasn’t always made him popular, but it has made him rich. He has done well for himself, by taking a stand that has, ultimately, helped all investors. At the age of 80, he is a beloved figure on Vanguard’s suburban Philadelphia campus. He is often at the office and makes himself accessible to the biggest names in business and journalism and he makes himself available to the not-so-big names. Google his name and read some of the comments of “Bogleheads” if you want to see how his message still resonates with investors 58 years after his first expose.
Happy Birthday Mr. Bogle. I wish you many, many more years doing what you love to do. Continue to give ’em hell. – Mary Caraccioli