enoughJack Bogle is having an author event at the Barnes & Noble on Fifth Avenue (555 5th/between 45 & 46), at 6:30PM June 17. He recently published a book called “Enough.”

Not sure how people feel about Jack. I like his criticism of Wall Street in general, but given what giant shareholders Vanguard is, I wish they took the issue of corporate governance more seriously.

Category: Corporate Management, Index/ETFs

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19 Responses to “Vanguard’s Jack Bogle”

  1. Mark Wolfinger says:

    Go to the event and tell him face to face.

  2. albnyc says:

    Barry – Given that Vanguard is, at its core, a passive indexer, how and why should they become more “serious” governance?

  3. willid3 says:

    you would think that being a fiduciary holder of others cash, that they would be more proactive is protecting same. otherwise they aren’t really doing the job are they?

  4. patient renter says:

    given what giant shareholders Vanguard is, I wish they took the issue of corporate governance more seriously

    This goes far beyond Vanguard – perhaps some of the big pension funds could do exert some pressure as well.

  5. JasRas says:

    He had his chance and missed it. He ran one of the largest shareholding companies bar none. Not only did he have a chance to institute positive corporate governance policy via shareholder vote, it also could have been done simply by talking and meeting with various boards. When you are that big, people will meet with you.

    His sole message was “we’re cheap”. And while he spoke the truth on internal fees, it was a half truth that took advantage of people’s lack of understanding of investing, markets, indices, etc. I think they had a huge opportunity to have an impact in shaping new and better indices too that didn’t have the foibles of some of the popular indices…

    Vanguard regularly hid behind the shield of “passive investor”. Thing is there is a difference between passive and apathetic…
    Bogle rings hollow for me. He’s a shill selling a book.

  6. this art: http://seekingalpha.com/article/115233-why-investors-should-think-like-capital-allocators

    covers Bogel’s view of “Disintermediation”, he, Bogel, should be Noted for, even, broaching the subject.

  7. Tao Jonesing says:

    I have read some of Bogle’s 2005 book “The Battle for the Soul of Capitalism,” and I have to say it reverberated with me.

    In “Part I: Corporate America” he complains mightly about poor corporate governance and the mutation of capitalism from what he calls “owner” capitalism to “management” capitalism. As a former executive of a public company, I agree with almost everything he said. The only problem that I had was with his inadvertent rewriting of history, which started by using a modern definition of “capitalism” that stressed the centrality with CORPORATE ownership of the means of production, then continued by projecting that modern-day definition back to the 18th century roots of capitalism, which predated the rise of the modern corporation and its dominance of capitalism by over 100 years. Still, he diagnoses the current problems correctly, which is what really matters.

    I’m sure he influences Vanguard as much as he can, but he is no longer the CEO . . .

  8. Pat G. says:

    @JasRas

    Perhaps, but aren’t they all trying to sell a book or something? Bogle has routinely criticized Wall Street for being the greedy little pigs that they are and the FED for bailing them out with taxpayer money. How many other prominent Wall Streeters can you say that about? That speaks volumes about his personal morals to me.

  9. Ned Baker says:

    The man of Vanguard fame is John Bogle. I fear Barry will get roped into talking to some nut named Jack at the Barnes and Noble. Hopefully this guy still offers some insight into corporate governance.

  10. DL says:

    Bogle deserves a lot of credit for preaching the virtues of passive indexing.

    Other mutual fund companies had to be dragged, kicking and screaming, to the indexing “table”.

    Bogle also deserves credit for at least raising people’s awareness about how corporations are run for the benefit of managers more than shareholders. It appears that laws will have to be changed in order to give shareholders more say in how companies are run. Raising public awareness is at least a step in the right direction.

  11. BG says:

    I have always felt John Bogle was an honest and Christian man. He is one of the very few that I would even give 5 minutes of my time. Wall Street is rotten to the core. John was a big enough man to not allow himself to be whored-out by Wall Street like so many of his peers in the industry.

    We need a lot more men like John and a hellva lot less of what we currently have.

  12. Byno says:

    Bogle was a prophet in his own time, and I can think of few more respectable names in the investment world.

    Of course, Mr. Bogle would be quick to point out that most investment managers can’t beat the index long term, and nearly all of those who do appear to be a product of the standard distribution rather than any actual skill; as such, I’m surprised at your generosity given your stance on EMH and its diametric opposition to Mr. Bogle’s

  13. Mannwich says:

    @BR: Speaking of books, I got yours today for my birthday. Can’t wait to read it.

  14. Given that Vanguard is, at its core, a passive indexer, how and why should they become more “serious” governance?

    Because they own stock(through people investing money in their funds). Do you have any idea what amounts of stock Vanguard and some of the huge pension funds(CALPERS for one) own?

  15. farmera1 says:

    Bogle is one of my heroes. He is on the short list of ethical brilliant financial types that are worth reading and thinking about what they say:

    Buffet
    Volcker
    Bogle
    Templeton

    Notice the common thread with the names. Yes they are all getting older, all pushing or past 80. Where are the great younger financial leaders for this country? Those that are ethical and aren’t just interested in turning a quick buck, no matter who gets hurt. Seems to be a real shortage of true leaders, just a lot of empty suits that are doing what it takes to turn a fat profit for themselves.

    I fear for this country. BR, can you take the place of these guys on my list? Just wondering.

  16. JasRas says:

    @ Pat G. – it is one thing to speak out on something when it continues to build the persona you’ve carefully cultivated over 30 years, and another thing to actually do something about it when you were at the reigns of one of the top five mutual fund companies in the world.

    Talk is talk, and actions mean something. There are many smaller “green” and “socially conscious” funds that deserve much more respect than Bogle or Vanguard.

    He is retired now, but his influence is still strong. It is one thing to preach into the air, and another to actually do. And, frankly, it is a completely different thing to preach to improve your image and then do nothing.

  17. JasRas says:

    @farmera1: Ethical? Please tell me what Bogle has done to deserve that title? He’s been a low cost provider of a low cost solution, that is it. Other than that, his words do not match his deeds. I have seen Michael Price of Mutual Shares be a share activist, sell his company to Franklin Templeton, and then dedicate his time to managing assets for charities. There are deeds matching the path that was preached. I see Calvert Funds that invest their assets and clients ethically.

    Vanguard is a perfect example of a cheap solution, yet the results show a that one gets what one pays for with regard to management. Interestingly, their best performing large blend fund is an actively managed fund that is subadvised by Wellington (where Bogle cut his teeth before starting Vanguard, btw).

    By and large the whole mutual fund industry turned a blind eye to their duty as shareholders. Most sub contract out the thinking and hire services to tell them how to vote. REALLY?! You have some of the best research in the world and you can’t figure out who to vote for on a board??? Crazy stuff.

  18. sjtall says:

    Battle for the Soul of Capitalism is a great read. In it, Jack Bogle advocates for the mutual ownership of the investment firm (not to be confused with the definition of a mutual fund), to eliminate the conflict between owners of the firm, who want to make a profit from investing your capital (regardless of their performance) and to sell you more premium-priced investment products, and the fiduciary duty they have to you as the client.

    I am starting a new private bank using a mutual bank charter to the same ends as Mr. Bogle in starting Vanguard Investments: to give the client (the owner of the capital) the ownership and control of the investment service. See http://www.mutualprivatebank.com and tell me what you think.

    Stephen

  19. investorinpa says:

    Just a few corrections on Mr. Bogle. He has NOT been the Vanguard CEO for nearly 10 years now. He was forced out by John Brennan based on Bogle exceeding the predetermined age limit for CEO’s. So all this talk about shareholder activism is not relevant, since Mr. Bogle is more or less the mascot for Vanguard. He had a contentious battle for his position and lost but agreed to be kept on the board but has no real power there.

    Farmera1 has a great question as to whom our next great financial types worth reading will be (I’ll add Jim Rogers to his list of Buffet, Bogle, Templeton, etc). Here are my top 5 future leaders of financial writing in no particular order: Barry Ritholtz (no surprise), Peter Schiff (must have an international contrarian type), Karl Denninger, Tim Ferris (author of the 4 hour work week and other “lifestyle” change blog), and a Chinese or Indian writer who has yet to emerge.