BBRG: Praise for John Bogle Compounds, Just Like His Returns

Praise for John Bogle Compounds, Just Like His Returns
He showed that average returns were fine, keeping costs low was crucial, and putting investors first was paramount.
Bloomberg, January 17, 2019

 

 

 

We lost a giant this week: Jack Bogle passed away at 89.

Last night, I collected a number of comments from people who posted their thoughts about him. There are lots of enough wonderful things worth reading here.

Today, I wanted to discuss what his contributions were to the world of investing. Upon reflection, I believe we can summarize it as 3 key ideas:

1. Mutual funds can “make no claim to superiority over the market averages.” Almost no one consistently beats the averages over longer time periods, net of expenses and trading costs.

2. Strategy follows structure: Mutual ownership by clients is common among insurance companies and credit unions, but it is unheard of on Wall Street. This allows costs to be kept as low as possible.

3. The business should be a Fiduciary to its clients.

There are obviously many more innovations from Jack Bogle, but those three tell much of his story. For context, consider this: most of us do not have a single idea that affects our chosen industry, let alone 3 game changing ones.

My full column on Jack’s contributions is here.

 

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I originally published this at Bloomberg, January 17, 2019. All of my Bloomberg columns can be found here and here

 

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