I'm going to talk about the price-earning ratio later. Bogle , the high priest of the index funds, he swears that over time you do better as a long-term investor in index fund.
For the Bogles , it was a story about family values, although not just the family values we normally mean when we talk about family values being good. The Bogle criminal pater familias, as Bobby and Tracey told their stories, was their father, who is known as Rooster Bogle . Rooster was a short man with large protruding ears and dark, curly hair, and a nasty temper.
the first member of the family ever in 150 years, actually graduated from college. Her name is Ashley Bogle . And she was a granddaughter of Rooster.
And then they try to get the family member who's most in trouble and attach relations between the most positive person and the person most in trouble So in the Bogle family, very few of the people really wanted to get out of it because this is the values
So 1/6 the cost with way better performance. And as Jack Bogle says here, who's the smart money now? So just because you are really smart and you're an expert and you have all the expertise, that doesn't mean that your clients end up winning.
I would love to move it up to Q&A. Yep? >> Okay. Sure. So just a question on indexing and John Bogle . I mean, there's, you know, a notion that for an individual price there's some irrationality and all kinds of behavioral things going on, but in aggregate, across the market where you have indexing for the, you know, basically, the entire marketplace, what is your view in terms of the role of rational decision-making or the fact that
knows better than me most of the time." But the mean reason is that indexing is cheap, and this sort of really basic equation that it was espoused by people like Bill Sharpe and Jack Bogle in the '60s and '70s, so there are some identification with the efficient market, rational market idea, but it doesn't really have to go together. It's just that investors, as a whole, are going to trail the market by the amount of their costs, I mean, because investors as a whole are the market. Any sort of costs, that subtracts
It's 6-0, 60 members over four generations of this family known as the Bogles . And the Bogles had a story to tell, how criminals often grow up in criminal families. What you are raised with, you grow to become, Tracey Bogle told me.
Lawyers have children who grow up to become lawyers. For the Bogles , it was a story about family values, although not just the family values we normally mean when we talk about family values being good. The Bogle criminal pater familias, as Bobby and Tracey told their stories, was their father, who is known as Rooster Bogle .
But two months later, the police solved the crime. They arrested the Bogles . And Rooster was sentenced to five years in the state penitentiary in Huntsville.
But the benefit would be that you could stop more of the members of this family. If the Bogles had been known for-- they'd been publicly or at least known to the authorities for what they were doing for all the time that passed, the opportunities were lost to try to change them.
So I would have been much better off if I'd discovered indexing earlier. The great irony is that Jack Bogle , who is the founder of Vanguard and the inventor of the first index fund available to the public, launched that fund in 1975.
1975 was the first year I started investing. I never heard of Jack Bogle or Vanguard or index funds when I started. It was 10 years before I heard of them, and then it took me a disturbingly long time to embrace it.
funds. I mentioned the one that I like the best is VTSAX, which is Vanguard's total stock market index fund. More common-- and the original fund Jack Bogle created-- is the S&P 500 index fund. That's perfectly acceptable, and the two are surprisingly close.
One way a family-focused approach could make the criminal justice system more effective is if we gather data on this. I don't mean to stigmatize the Bogles but it's rather to help them by trying to get them therapy at an early age when they're more easily reached.
He was a crusty law-and-order Republican, who favored a lock them up and throw away the key approach. But over years of dealing with the Bogles , he told me, when the courts try to deal with families like these, we always lose. He said, just locking up more Bogles is not going to do anything more than cost taxpayers' money.
And then they try to get the family member who's most in trouble and attach relations between the most positive person and the person most in trouble But once I found the Bogles , I mean, I heard about other families.
What about the S&P 500? They can just put it into the stock market, right? Yeah, John Bogle 's real contribution and the success of the S&P 500 is this idea that currency is not a store of value.
in Montana and Arizona. One criminologist estimated the costs of a family like the Bogles to society that the Bogle family by itself would have cost other Americans a total of $480 million, rather staggering figure.
And then they try to get the family member who's most in trouble and attach relations between the most positive person and the person most in trouble I was able to spend time with one of the Bogles , Tracey Bogle , when he finally got-- finished his 16-year prison sentence.
people acknowledged continental drift which later led to the concept of plate tonics 50 years to just agree that they I mean come on I think that's mind Bogle and then we got guys like in music guys like Les Paul rivert Neeve everybody has the ability to design electronic circuits and and we all use the same
They were able to realize the value of pricing power, competitive advantage, and some of these qualitative things that they really hadn't paid attention to earlier in their partnership. And of course I want to acknowledge John Bogle , the founder and former CEO of the Vanguard Group. Mr. Bogle wrote the forward to my book.
And of course I want to acknowledge John Bogle , the founder and former CEO of the Vanguard Group. Mr. Bogle wrote the forward to my book. If he were here today he'd say three things.
And third, his life's motto, press on regardless. When I visited Mr. Bogle last April at the Vanguard headquarters, interestingly enough, Google's historian was on their campus that day.
You know it sounds so obvious, but it is just absolutely the case. As the founder of the Vanguard Group, Jack Bogle , likes to say, "In the investment business, you get what you don't pay for." And what this does is it breaks down all mutual funds and these are not just, these are actively managed funds, this is every mutual fund there is in the United States, and it divides them
And the boys were eventually caught and arrested and sentenced to the most-secure juvenile reformatory in Oregon. Please allow me a flashback here because the Bogles ' story actually starts much earlier than Rooster. I was able to trace the family back to the end of the Civil War in 1865 in Tennessee
There's also another way to use a focus on the family to reduce crime. The judge who presided over many of the Bogles ' trials over four generations was named Albin Norblad. He was a crusty law-and-order Republican, who favored a lock them up and throw away the key approach.
Thanks for the talk. So you mentioned different solutions to help the Bogles and everyone in their situation. The first one, here at Google, we have this policy where we always think that more data is better.
So the judge who told me-- Well, this judge named Albin Norblad, he said that he'd had five families like the Bogles in his court, all of whom had more than 50 members in prison covering four generations. And he was just one to throw his hands up because he had very little he could do about them.
Sure, at a high level, my investing philosophy is one that is very fond of passively managed investments. So there is this thing called index funds that was created by John Bogle who's the founder of Vanguard. And an index fund is a fund that tracks a market, a broad market index.
So like 40 years, they kept filing false petitions to the government. And Rooster's own father, Lewis Bogle , continued the family tradition of being a con artist when he moved from Tennessee to Texas in 1921. He joined his uncle there, who came from Daylight, Tennessee, selling the local specialty, which was nursery trees stock, young apple and pear trees.
was on their campus that day. And he had just left Mr. Bogle 's office as I was going in. After my book was published, Barron's wrote this article that I wrote about the earnings power chart
But over years of dealing with the Bogles , he told me, when the courts try to deal with families like these, we always lose. He said, just locking up more Bogles is not going to do anything more than cost taxpayers' money. He said we need another solution to this.
He was serving a 16-year sentence for a crime that involved kidnapping, armed robbery, aggravated assault, car theft, and sodomy. He'd committed the crime with his older brother, Bobby Bogle . In my first interview with Tracey, he unintentionally handed me the theme of the book.
And part of our effort is we do a ton of research, including writing books. And one book we've written with a couple my colleagues, Jack Bogle and David Folk, is "The Do-It-Yourself Financial Advisor." And the thesis of this book is that financial advice, as it currently stands, is too complex and too opaque,
they bascially deliver the S&P minus a bunch of fees. That's not a good idea, so that's why Jack Bogle says well, let's just buy the Vanguard fund for five BPs and you're going to be better off. Why in the heck would anyone want to try to be Warren Buffett?
Do you guys want to comment on-- Well, we differed on that. Burt wisely said, "I think this could work," and worked with Jack Bogle to make it go. And I unwisely went to Jack and said, "Jack, you made a terrible mistake.
They said this is the biggest piece of garbage that they had ever seen. And when Jack started the first index fund, it was called Bogle 's Folly. And in fact, I sometimes like to think that Jack and I were the only to investors in the index fund.
of the family in prison was not 6. It's 6-0, 60 members over four generations of this family known as the Bogles . And the Bogles had a story to tell, how criminals often grow up in criminal families.
have cost other Americans a total of $480 million, rather staggering figure. Finally, I'd like to share a few ideas on what the Bogles and the research on how crime runs in families might tell us about reforming our criminal justice system. One of the oddities about the criminal justice system is that, although we spent $282 billion
to have an assortment of what are known as low-correlation assets. So speaking of JL Collins and other industry titans, like Warren Buffett, Jack Bogle , they all say US stocks.
And the Bogles had a story to tell, how criminals often grow up in criminal families. What you are raised with, you grow to become, Tracey Bogle told me. He was the first of the men that I talked to in prison.
And then on a Tuesday morning, think about an environment-- let's say, 2011. So if what we need to do is limit how much equity exposure they have in a bear market, it's OK if Jack Bogle disagrees.
But that did not stop their criminal proclivities, which they simply brought with them. Even now, 60 years after that, there are still 10 Bogles in prison and three who have escaped and are hiding somewhere in Montana and Arizona.
system. One of the oddities about the criminal justice system is that, although we spent $282 billion on the criminal justice system last year, the criminal justice system does not keep data on families like the Bogles . That is, when somebody is arrested, the police don't ask them, do you have a father or a mother or brother or sister or children who have been in prison?
And it's one of the few actually successful programs that anyone can identify. I'm also very happy to tell you that, because it took me so long, 10 years, to write this book, to get all the Bogles to talk, that, finally last year, the first member of the family ever in 150 years, actually graduated from college.