The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Mechanical Investing

URL:  https://boards.fool.com/ot-john-bogle-34114041.aspx

Subject:  OT John Bogle Date:  1/19/2019  7:32 PM
Author:  mark19601962 Number:  273137 of 274589

I read a very interesting article about John Bogle. John Bogle is famous for inventing the index fund. He was amazing in that he had multiple near fatal heart attacks, but still went on to form the largest asset manager with 4.9 trillion of assets.

What I find most interesting, is I wonder if he is a hypocrite.

In 1960, he trashed the idea of an index fund. He claimed it would underperform mutual funds by .75%. He quoted a critic saying that the relative inflexibility of index funds makes them undesirable for the average investor. In 1973, he said, studies critiquing fund performance were wholly invalid. “I don’t see how the mutual funds performance could be very much better. Funds had delivered excellence to their investors. “


In 1974, he was fired as CEO of Wellington Management. He realized he needed a radical new way to do business, and created Vanguard, which was a mutual company, meaning, the share holders owned the company. He also deliberately designed Vanguard to drive fees as low as possible.

He was also a harsh critic of fund companies. “The way fund companies treat their clients is larcenous, trying to beat the market is a fools game, brokerage commissions are like highway robbery.
Whether you think he believed what he said, or not, he created a war between companies to charge the lowest fees, and he helped retail investors immensely.
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us