John Bogle

Discussion in 'Wall St. News' started by Ghost of Cutten, Mar 5, 2010.

  1. "I don't know what to do about Scion Capital, started by Michael Burry M.D. after leaving his third year of residency in neurology. He started it mostly with his own money, $1.4 million, and he's looking for more. His technique to manage risk is to buy on the cheap and, if he takes a short position -- I hope you're all sitting down for this -- it is because he believes the stock will decline." - John Bogle, Fortune magazine, 2001

    This is the same Scion Capital that trounced the market from inception to closure, and made a killing off the subprime debacle, vastly outperforming the S&P and enjoying great absolute returns with lower volatility and risk than the market.

    By contrast, Bogle's vanguard S&P index fund has performed atrociously over the last decade. It made the incredibly dumb decision to be fully long stocks at the peak of the most overvalued stock market bubble in US history, and achieved the dubious distinction of being 100% long the index at the peaks of not one, but TWO bear markets in 10 years, losing 45% and 55% respectively. For this vast wealth destruction, Bogle had the temerity to actually charge his customers money, as if losing them a fortune was worthy of financial compensation.

    I have yet to see any public apology from Mr Bogle either to his customers, who he has clearly served badly, or to Mr Burry, who has proven himself to be a far better investor than John Bogle could ever dream of being.

    In short, John Bogle is an asshole. He has ripped off the public with a terrible product that owns 100% stocks no matter how ludicrously overvalued they might be, and he gratuitously insults far superior investors and more honourable men than himself, failing to then publish any kind of retraction or apology when his disgraceful conduct is exposed by reality as being complete and utter bullshit.
  2. TraDaToR


    It was because of the speculators, so we need a Tobin tax....ROFL.
  3. i am actually a nice guy
  4. soundsm orel ike a compliment then a negative connotation
    actually more like a neutral thing
  5. rros


    That quote is missing this part "He looks for opportunities to take advantage of illiquidity and inefficient sectors." That is more than just saying, he buys cheap stocks as safety and sells short those which might decline.
  6. 1) On an absolute basis, it hasn't performed "well".
    2) On a relative basis, it performs "well" because of a lower fee structure. Many, many investors can benefit from that instead of being invested in smaller piss-ant funds. The world would be a slightly better place if those smaller funds shut their doors tomorrow and let Bogle "passively manage" their money. :cool:
  7. It's an INDEX fund, similar to ETF index. I think it is even passively managed. How can you expect a passively managed index fund to outperform an actively managed fund? Comparing apples/oranges.

  8. piezoe


    Bogle is retired, i think. He is the one who promoted index funds, that's true. These funds will be close to 100 percent invested in stocks all the time. That is their nature. They don't try to time the market, they don't take short positions, and they don't move in and out of cash with changing market conditions, so to criticize them for not doing these things is to criticize them for not being something they are not by design. Back testing showed that these funds do as well as actively managed funds on average, and because fees are much lower, they do, on average, better than actively managed funds. I think those are well established facts. I personally am not a fan of either typical, actively-managed funds or of index funds. I think the idea behind both types of funds is flawed. But if you're only choice is between a typical actively managed fund with wide diversity in both dividend paying and non-dividend paying stocks and an index fund with similar makeup, back testing has shown you will do better over time and on average in the index fund.
  9. 1) Maybe it's more accurate to say that actively-managed funds underperform passively-managed funds. It's the statistical quirk where everybody cannot be "above average".
    2) Actively-managed funds are playing a game of "musical chairs" whereby there can be different degrees of winners and losers in their hunt to beat the benchmark, a.k.a. the index funds.
    3) They ought to be able to do "well" in a stagnant or downtrending market. In an uptrending market, they can tend to overtrade and generate too much in the way of fees and slippage. :)