The House that Bogle Built: How John Bogle and Vanguard Reinvented the Mutual Fund Industry

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McGraw Hill Professional, Apr 29, 2011 - Business & Economics - 304 pages
"One of the best financial books of 2011."
National Post

John Bogle’s journey from financial-industry pioneer to one of its toughest critics

Arguably the greatest shareholder advocate in the history of Wall Steet, John Bogle not only created the first index mutual fund but has become the primary voice for change in an industry plagued by excess and complacency. Bogle stumbled upon mutual funds by accident in 1949 as a college student at Princeton. In his junior year, he read a Fortune article about the burgeoning fund industry that sparked his interest, and he wrote his now famous senior thesis about it.

What began as an intellectual pursuit would turn into Bogle’s life mission. The House That Bogle Built chronicles the years of Bogle’s development from college whiz kid into a titan of the mutual fund industry and shareholder advocate—highlighting his creation of the Vanguard Group and the Vanguard 500 Index Fund and his frequent battles to shake up the status quo. It takes you through the two decades he spent running Vanguard, until his forced retirement in 1999, and discloses what he thinks about the fund industry today.

Bogle has always stood out for his extraordinary talents in math, analysis, management, and investing. But his most noteworthy trait is his most basic: his humanism in an industry not exactly famous for placing people over profit. It’s Bogle’s dedication to clients’ interests above all else that has earned him the reputation as the “conscience” of the investing industry.

In his ninth decade of life, Bogle is remarkably candid about the role he plays at Vanguard today—and about his opinion of Jack Brennan, his successor. “How do you keep Vanguard a place where judgment has at least a fighting chance to triumph over process?” he asks. Skeptical but never defeatist, Bogle maintains a retired-but-active status at the company, keeping a close watch over those now at the helm of Vanguard.

The House That Bogle Built reveals one of the investing world’s most fascinating and complex figures. A dogged advocate of shareholder democracy, he was a self-confessed “dictator” at Vanguard. A brilliant mathematician, he is more interested in people than numbers. Fiercely competitive, he bemoans the cut-throat approach that drives his industry of choice. Always, though, Bogle places the good of the client before anything else—a practice that has become steadily rarer in his business.

The House That Bogle Built provides an insightful look at the past, present, and future of one of today’s largest industries, through the eyes of one of its most influential pioneer.

 

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Contents

Chapter 1 The Sopwith Camel
1
Chapter 2 The Mutual Fund Pioneer
15
Chapter 3 He Knows More About the Fund Business than We Do
21
Chapter 4 A Marriage Made in Heaven
29
Chapter 5 Irreconcilable Differences
41
Chapter 6 From the Deck of HMS Vanguard
53
Chapter 7 Cutting the Gordian Knot
61
Chapter 8 The Vanguard Manual
75
Chapter 13 Dont Call Me a Gadfly
157
Chapter 14 St Jack
183
Chapter 15 The Rise of the Speculator
203
Chapter 16 The Spirit of Mutuality
221
Chapter 17 The Heart of the Matter
241
Chapter 18 The Future of Indexing
251
Chapter 19 The Future of Vanguard
275
Acknowledgments
291

Chapter 9 Creating Loyalty and Respect
85
Chapter 10 The Great Bull Market
101
Chapter 11 The Devils Invention
119
Chapter 12 The Two Jacks
135
Notes
293
Index
303
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About the author (2011)

Lewis Braham has worked as a journalist for more than a decade. His news articles and columns on personal finance have appeared in BusinessWeek, SmartMoney, Fortune, plus numerous other publications. He was the ghost writer for Investing Strategies for the High Net Worth Investor.

Robert Slater, author of the original edition, is the bestselling business author of 17 books about major business personalities and companies including Jack Welch and the GE Way, The Eye of the Storm: How John Chambers Steered Cisco Through the Technology Collapse and Soros: The World's Most Influential Investor. He worked for UPI and Time Magazine for many years, in both the United States and the Middle East.

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