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Attendees at the 2018 Bogleheads Conference crowd around John Bogle Thursday. RYAN COLLERD FOR THE WALL STREET JOURNAL
This week, 200 investors met in Pennsylvania at a conference that is a cross between a religious revival and an M.B.A. finance class.
The Bogleheads, as the group is known, converged to thank their hero, Vanguard Group founder John C. Bogle. They also came to swap stories and advice about investing—and to be part of a community reinforcing the message that investing can be simple as pie and cheap as dirt.
THE WIT AND WISDOM OF JACK BOGLE
The father of the index fund has a way with words. Here and below are some of his best bon mots through the years.
‘Don’t look for the needle in the haystack. Just buy the haystack!’
‘The greatest enemies of the equity investor are expenses and emotions.’
‘When there is a gap between perception and reality it is only a matter of time until it is reconciled . . . in favor of reality.’
‘I built a career out of knowing what I don’t know. ’
Since 2000, the group has grown from a handful of diehards to a free online forum, bogleheads.org, with 75,000 registered users and more than three million posts on every conceivable personal-finance topic.
The Bogleheads unabashedly adore the man who founded Vanguard in 1974 and introduced the first index mutual fund in 1975. Vanguard says that index funds have saved U.S. investors approximately $150 billion in fees since the early 1990s.
Each person’s conference badge features a snapshot portrait – not of the attendee, but of Mr. Bogle. Several people sport campaign buttons reading “Jack Bogle for President.”
John "Jack" Bogle spoke Thursday at the 2018 Bogleheads Conference.
The crowd bursts into a standing ovation as Mr. Bogle arrives at the conference about 10 minutes late—largely because he was in the hospital the day before, being treated for an irregular heartbeat.
Mr. Bogle, 89 years old, has battled coronary disease his entire life. He suffered a half-dozen heart attacks and, in 1996, received a heart transplant.
Stooped and walking with a cane, he approaches the lectern—which is emblazoned with a placard that features a portrait of him and the words “Our Friend and Mentor Jack Bogle”—and sits down on a chair behind it.
Mr. Bogle looks worn and frail—who wouldn’t?—but his voice retains its vigor.
He butchers a herd of sacred cows in his remarks, including the notions that cheap “value” stocks are certain to outperform higher-priced “growth” stocks (he expects their returns to converge over the long term) and that exchange-traded funds are better than index mutual funds. Even though Vanguard is one of the largest managers of ETFs, he thinks they trigger too much trading.
Each attendee was given a copy of one of Mr. Bogle's most famous works, "The Little Book of Common Sense Investing."
Mr. Bogle also warns that in the long run, stocks are unlikely to grow at an average of more than 4% annually after inflation. Investors everywhere, he says, “better save more money and get more costs out of the equation.”
He reiterates his gospel: Investors should control what they can—fees and taxes, for instance—and let go of what they can’t.
Mr. Bogle says he has roughly half of his money in stocks, half in bonds. “I spend about half of my time wondering why I have so much in stocks,” he says, “and about half wondering why I have so little.”
THE WIT AND WISDOM OF JACK BOGLE
The father of the index fund has a way with words. Here are some of his best bon mots through the years.
‘In the field of investment management, nearly all of those experts whom we identify as stars prove to be comets. Rather than being eternal beacons of light, most managers live a transitory existence, illuminating the financial firmament for but a brief moment in time, only to flame out, their ashes drifting gently down to earth. Of course, some outstanding managers remain, but history tells us that they are the exception that proves the rule.’
‘I don’t like the word “never” when it comes to the stock market.’
‘In the fund business, you get what you don’t pay for.’
‘Over the long run, a percentage point increase in volatility is meaningless; a percentage point increase in return is priceless.’
‘It is investor emotions, often inexplicable for individual stocks and for the market alike, that drive the market in the short run, and sometimes for remarkably extended periods. But not forever.’
‘We must base our asset allocation not on the probabilities of choosing the right allocation, but on the consequences of choosing the wrong allocation.’
‘While rational expectations can tell us what will happen... they can never tell us when. ’
Later, he says simply: “I built a career out of knowing what I don’t know.”
Mr. Bogle’s voice cracks when he tells the crowd, “You mean a lot to me, all of you,” and many Bogleheads have tears in their eyes when they give him another standing ovation at the end of his remarks.
David Croce, 31, is a plumber from Revere, Mass., who stumbled on bogleheads.org two or three years ago when he started to save for retirement. “I knew nothing, zero,” he says. “Nobody ever taught me about saving or investing.” Now, he says, he has a Roth Individual Retirement Account in a Vanguard index fund, and “I feel I can do it myself at this point.” He came to the meeting because “if I hang out with more smart people I can better myself.”
Victoria Fineberg, 64, is an electronics engineer retired from the U.S. Department of Defense who discovered the Bogleheads while she was still traumatized by her losses in the stock market. When she posted her first question to the online forum in 2001, “I was very impressed by the intelligence and professionalism,” she recalls. “They treated me with fantastic kindness.”
Ms. Fineberg has since been to 12 of the annual meetings. She comes largely to thank Mr. Bogle. “He did the hard work, the really dirty job, so that I could be able to retire even with all the mistakes I made,” she says.
Rick Bridgeman, 53 years old, retired at the end of September from his job as a prosecutor for the state of Georgia; his wife, Genoria, 57, is a former manager at the Centers for Disease Control and Prevention. “We couldn’t think of any better way to celebrate my retirement than coming here,” he says.
In the early 1990s, they heard Mr. Bogle speak at a personal-finance conference in Atlanta. “It made so much sense,” Mr. Bridgeman recalls. “It just clicked.” They bought index funds and left them alone.
He adds: “I have a friend who’s a stockbroker, and when he heard I was about to retire, he said, ‘We have to have lunch.’ And I said, ‘We can have lunch, but you should know I’m a Boglehead, so I believe in index funds and keeping investing simple.’”
Mr. Bridgeman and his wife burst out laughing at the memory as he slams home the punchline: “He’s still my friend, but he never did invite me to that lunch.”
In hushed tones, several of the attendees ask me who could possibly replace Jack Bogle as an investing icon after, someday, he is gone.
I give them the only answer I can come up with: “I wish I knew.”
John Chalmers of Abilene, Tex., wears a Jack Bogle for President pin at the conference. Financial theorist and author William Bernstein speaks to attendees during a book signing.
Appeared in the October 6, 2018, print edition as '‘I Built a Career Out of Knowing What I Don’t Know’.'
