Publisher Description

Praise for Don't Count On It! "This collection of Jack Bogle's writings couldn't be more timely. The clarity of his thinking—and his insistence on the relevance of ethical standards—are totally relevant as we strive to rebuild a broken financial system. For too many years, his strong voice has been lost amid the cacophony of competing self-interests, misdirected complexity, and unbounded greed. Read, learn, and support Jack's mission to reform the industry that has been his life's work."
—PAUL VOLCKER, Chairman of the President's Economic Recovery Advisory Board and former Chairman of the Federal Reserve (1979–1987) "Jack Bogle has given investors throughout the world more wisdom and plain financial 'horse sense' than any person in the history of markets. This compendium of his best writings, particularly his post-crisis guidance, is absolutely essential reading for investors and those who care about the future of our society."
—ARTHUR LEVITT, former Chairman, U.S. Securities and Exchange Commission "Jack Bogle is one of the most lucid men in finance."
—NASSIM N.TALEB, PhD, author of The Black Swan "Jack Bogle is one of the financial wise men whose experience spans the post–World War II years. This book, encompassing his insights on financial behavior, pitfalls, and remedies, with a special focus on mutual funds, is an essential read. We can only benefit from his observations."
—HENRY KAUFMAN, President, Henry Kaufman & Company, Inc. "It was not an easy sell. The joke at first was that only finance professors invested in Vanguard's original index fund. But what a triumph it has been. And what a focused and passionate drive it took: it is a zero-sum game and only costs are certain. Thank you, Jack."
—JEREMY GRANTHAM, Cofounder and Chairman, GMO "On finance, Jack Bogle thinks unconventionally. So, this sound rebel turns out to be right most of the time. Meanwhile, many of us sometimes engage in self-deception. So, this book will set us straight. And in the last few pages, Jack writes, and I agree, that Peter Bernstein was a giant. So is Jack Bogle."
—JEAN-MARIE EVEILLARD, Senior Adviser, First Eagle Investment Management Insights into investing and leadership from the founder of The Vanguard Group Throughout his legendary career, John Bogle-founder of the Vanguard mutual fund group and creator of the first index mutual fund-has helped investors build wealth the right way, while, at the same time, leading a tireless campaign to restore common sense to the investment world. A collection of essays based on speeches delivered to professional groups and college students in recent years, in Don't Count on It is organized around eight themes Illusion versus reality in investingIndexing to market returnsFailures of capitalismThe flawed structure of the mutual fund industryThe spirit of entrepreneurshipWhat is enough in business, and in lifeAdvice to America's future leadersThe unforgettable characters who have shaped his career Widely acclaimed for his role as the conscience of the mutual fund industry and a relentless advocate for individual investors, in Don't Count on It, Bogle continues to inspire, while pushing the mutual fund industry to measure up to their promise.

Notes

Subtitle, Reflections On Investment Illusions, Indexing, Capitalism, Mutual Funds, Entrepreneurship, Idealism, & More

Back Cover

In his Foreword, former Federal Reserve vice-chairman Alan S. Blinder writes, "America's vaunted financial system let us down big-time during the raucous decade of the 2000s." In Don't Count on It! , John C. Bogle--a man Dr. Blinder refers to as "the conscience of Wall Street"--identifies modern capitalism's flaws, explains how we arrived at this economic crossroads, and examines how we can begin to repair the damage before it's too late. Don't Count on It! presents an anthology of Bogle's latest thinking, focused on how numbers deceive us into seeing things as other than they really are. He also presents a cogent analysis of the chinks in the armor of a financial system that has failed to live up to the responsibility owed to its individual and institutional investors. Read and learn from the wise counsel of Vanguard's founder about how we deceive ourselves into accepting illusory and evanescent numbers rather than focusing on fundamental and intrinsic reality. Bogle argues that we confuse the market of real investing with the market of expectations, disregarding the beauty of simplicity in favor of the wizardry that creates complex "products" that serve Wall Street at the expense of its clients. Specifically, Bogle discusses: The unconscionably high costs of financial intermediation The disgraceful failure of money managers and agents to abide by what should have been traditional fiduciary standards The unfortunate consequences of the dominance of short-term speculation over long-term investment The subjects of Bogle's anthology go well beyond the investment markets, as indicated by the seven sections of Don't Count on It! --Investment Illusions, The Failure of Capitalism, What's Wrong with "Mutual" Funds, What's Right with Indexing, Entrepreneurship and Innovation, Idealism and the New Generation, and Heroes and Mentors. His book encourages readers to better understand our complex financial system, to examine it, to debate it, to challenge it, and to fulfill our duty to ask simple questions and demand answers that are understandable, intelligent, and, above all, wise.

Flap

In his Foreword, former Federal Reserve vice-chairman Alan S. Blinder writes, "America's vaunted financial system let us down big-time during the raucous decade of the 2000s." In Don't Count on It! , John C. Bogle--a man Dr. Blinder refers to as "the conscience of Wall Street"--identifies modern capitalism's flaws, explains how we arrived at this economic crossroads, and examines how we can begin to repair the damage before it's too late. Don't Count on It! presents an anthology of Bogle's latest thinking, focused on how numbers deceive us into seeing things as other than they really are. He also presents a cogent analysis of the chinks in the armor of a financial system that has failed to live up to the responsibility owed to its individual and institutional investors. Read and learn from the wise counsel of Vanguard's founder about how we deceive ourselves into accepting illusory and evanescent numbers rather than focusing on fundamental and intrinsic reality. Bogle argues that we confuse the market of real investing with the market of expectations, disregarding the beauty of simplicity in favor of the wizardry that creates complex "products" that serve Wall Street at the expense of its clients. Specifically, Bogle discusses: The unconscionably high costs of financial intermediation The disgraceful failure of money managers and agents to abide by what should have been traditional fiduciary standards The unfortunate consequences of the dominance of short-term speculation over long-term investment The subjects of Bogle's anthology go well beyond the investment markets, as indicated by the seven sections of Don't Count on It! --Investment Illusions, The Failure of Capitalism, What's Wrong with "Mutual" Funds, What's Right with Indexing, Entrepreneurship and Innovation, Idealism and the New Generation, and Heroes and Mentors. His book encourages readers to better understand our complex financial system, to examine it, to debate it, to challenge it, and to fulfill our duty to ask simple questions and demand answers that are understandable, intelligent, and, above all, wise.

Author Biography

JOHN C. BOGLE is the founder of the Vanguard Group of Mutual Funds and President of its Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as chairman and chief executive officer until 1996 and senior chairman until 2000. In 1999, Fortune magazine named Mr. Bogle as one of the four "Investment Giants" of the twentieth century; in 2004, Time magazine named him one of the world's 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award. In 2010, Forbes magazine described him as the person who "has done more good for investors than any other financier of the past century." Mr. Bogle graduated from Blair Academy cum laude in 1947 and Princeton University in 1951, magna cum laude in economics. In 1999, he received the University's Woodrow Wilson Award for distinguished achievement in the nation's service. Don't Count on It! is Mr. Bogle's ninth book. His earlier books include Common Sense on Mutual Funds, The Battle for the Soul of Capitalism, The Little Book of Common Sense Investing, and Enough.

Table of Contents

Foreword xi Introduction xv A Note to the Reader xxxi Part One. Investment Illusions 1 Chapter 1 Don't Count on It! The Perils of Numeracy 5 Chapter 2 The Relentless Rules of Humble Arithmetic 25 Chapter 3 The Telltale Chart 49 Chapter 4 A Question So Important That It Should Be Hard to Think about Anything Else 71 Chapter 5 The Uncanny Ability to Recognize the Obvious 87 Part Two. The Failure of Capitalism 97 Chapter 6 What Went Wrong in Corporate America? 101 Chapter 7 Fixing a Broken Financial System 123 Chapter 8 Vanishing Treasures: Business Values and Investment Values 137 Chapter 9 A Crisis of Ethic Proportions 157 Chapter 10 Black Monday and Black Swans 161 Chapter 11 The Go-Go Years 187 Part Three. What's Wrong with "Mutual" Funds 203 Chapter 12 Re-Mutualizing the Mutual Fund Industry: The Alpha and the Omega 207 Chapter 13 A New Order of Things: Bringing Mutuality to the "Mutual" Fund 237 Chapter 14 The Fiduciary Principle: No Man Can Serve Two Masters 273 Chapter 15 Mutual Funds at the Millennium: Fund Directors and Fund Myths 297 Chapter 16 "High Standards of Commercial Honor . . . Just and Equitable Principles of Trade . . . Fair Dealing with Investors" 317 Part Four. What's Right with Indexing 347 Chapter 17 Success in Investment Management: What Can We Learn from Indexing? 351 Chapter 18 As the Index Fund Moves from Heresy to Dogma, What More Do We Need to Know? 369 Chapter 19 "The Chief Cornerstone" 393 Chapter 20 Convergence! The Great Paradox: Just as Active Fund Management Becomes More and More Like Passive Indexing, So Passive Indexing Becomes More and More Like Active Fund Management 409 Part Five. Entrepreneurship and Innovation 435 Chapter 21 Capitalism, Entrepreneurship, and Investing: The 18th Century versus the 21st Century 439 Chapter 22 Seventeen Rules of Entrepreneurship 455 Chapter 23 "Vanguard: Saga of Heroes" 469 Chapter 24 When Does Innovation Go Too Far? 493 Part Six. Idealism and the New Generation 507 Chapter 25 Business as a Calling 511 Chapter 26 The Right Kind of Success 517 Chapter 27 "This Above All: To Thine Own Self Be True" 521 Chapter 28 "Enough" 529 Chapter 29 If You Can Trust Yourself . . . 535 Chapter 30 The Fifth "Never" 543 Chapter 31 "When a Man Comes to Himself " 549 Part Seven. Heroes and Mentors 557 Chapter 32 Walter L. Morgan 563 Chapter 33 Paul A. Samuelson 569 Chapter 34 Peter L. Bernstein 575 Chapter 35 Bernard Lown, MD 581 Index 587

Review

"Don't Count on It! is a wise book. As most traders and investors remain convinced that they can beat the market, it's always sobering to hear a compelling voice from the other side." (Seeking Alpha) "If Bogle writes it, it's worth reading. His latest, Don't Count On It, is a collection of 35 essays, every one of them filled with wisdom and insight. . . While I have read Bogle's views on these issues many times, I'm always impressed with the quality of his writing (Where else can you read quotations from Adam Smith to Winston Churchill to Cato?), the wit and humility he shows and his passion to help investors. The book is a compelling read, one that in effect tells the story and mission of a great man. We're lucky and privileged to have him fighting on our side.  As Bogle noted in his book, Machiavelli "described the accumulation of worldly 'glory' as the motivating principle that drives leaders to undertake 'great enterprises' and do 'great things' on behalf of their fellow citizens and not just themselves." Hard to find a better description of Bogle himself." (MarketWatch) "Mr Bogle's prescription for a better system is relatively simple: to demand proper fiduciary management from money managers. They must prioritise client interests, act as responsible corporate citizens, charge reasonable fees and eliminate conflicts of interest. Amen to that. It may sound like nostalgia from an old-timer, or idealism from a visionary. But without such changes, investors and society will continue to be short-changed as the financial community carries on regardless." (Financial Times) "In Don't Count on It! Reflections on Investment Illusions, Capitalism, "Mutual" Funds, Indexing, Entrepreneurship, Idealism, and Heroes, Bogle hammers at what he labels the cost matters hypothesis: Whether markets are efficient or inefficient, investors as a group must fall short of the market return by precisely the amount of the aggregate costs they incur. It is the central fact of investing. Not surprisingly, the book deals extensively with the low-cost innovation for which Vanguard is best known: the stock index mutual fund. When the company first made indexing available to small investors in 1975, critics derided the notion as "Bogle's folly." To Bogle, however, the benefits to investors were irrefutable. . .  The impact of indexing has been so great that a second, hugely important contribution by Vanguard has been overshadowed. Vanguard originated the now standard segmentation of bond funds into short-, intermediate-, and long-term varieties. Bogle was enshrined in the Fixed Income Analysts Society Hall of Fame for this innovation. The author of Don't Count on It! does not dwell on such honors, which include being named one of the world's 100 most powerful and influential people by Time magazine. In fact, Bogle devotes the final section of his book to tributes to four of his own heroes: Walter Morgan, economist Paul Samuelson, investment guru Peter Bernstein, and Dr. Bernard Lown, a Nobel laureate whom he credits with keeping him alive in defiance of a mystifying heart ailment. Bogle also shows modesty in sharing credit for his contributions to the field and in downplaying his own theoretical expertise. His unashamed display of such old-fashioned virtues, as well as his heretical view that running a business is not entirely about maximizing the wealth of the owners, has earned him the nickname 'St. Jack.'" (Financial Analysts Journal)

Long Description

Praise for Dont Count On It! "This collection of Jack Bogles writings couldnt be more timely. The clarity of his thinking and his insistence on the relevance of ethical standards are totally relevant as we strive to rebuild a broken financial system. For too many years, his strong voice has been lost amid the cacophony of competing self-interests, misdirected complexity, and unbounded greed. Read, learn, and support Jacks mission to reform the industry that has been his lifes work." PAUL VOLCKER , Chairman of the Presidents Economic Recovery Advisory Board and former Chairman of the Federal Reserve (1979 1987) "Jack Bogle has given investors throughout the world more wisdom and plain financial horse sense than any person in the history of markets. This compendium of his best writings, particularly his post-crisis guidance, is absolutely essential reading for investors and those who care about the future of our society." ARTHUR LEVITT , former Chairman, U.S. Securities and Exchange Commission "Jack Bogle is one of the most lucid men in finance." NASSIM N.TALEB , PhD, author of The Black Swan "Jack Bogle is one of the financial wise men whose experience spans the post World War II years. This book, encompassing his insights on financial behavior, pitfalls, and remedies, with a special focus on mutual funds, is an essential read. We can only benefit from his observations." HENRY KAUFMAN , President, Henry Kaufman & Company, Inc. "It was not an easy sell. The joke at first was that only finance professors invested in Vanguards original index fund. But what a triumph it has been. And what a focused and passionate drive it took: it is a zero-sum game and only costs are certain. Thank you, Jack." JEREMY GRANTHAM , Cofounder and Chairman, GMO "On finance, Jack Bogle thinks unconventionally. So, this sound rebel turns out to be right most of the time. Meanwhile, many of us sometimes engage in self-deception. So, this book will set us straight. And in the last few pages, Jack writes, and I agree, that Peter Bernstein was a giant. So is Jack Bogle." JEAN-MARIE EVEILLARD , Senior Adviser, First Eagle Investment Management

Review Text

?Don?t Count on It! is a wise book. As most traders and investors remain convinced that they can beat the market, it?s always sobering to hear a compelling voice from the other side.? (Seeking Alpha) "If Bogle writes it, it?s worth reading. His latest, Don?t Count On It, is a collection of 35 essays, every one of them filled with wisdom and insight. . . While I have read Bogle?s views on these issues many times, I?m always impressed with the quality of his writing (Where else can you read quotations from Adam Smith to Winston Churchill to Cato?), the wit and humility he shows and his passion to help investors. The book is a compelling read, one that in effect tells the story and mission of a great man. We?re lucky and privileged to have him fighting on our side.  As Bogle noted in his book, Machiavelli ?described the accumulation of worldly ?glory? as the motivating principle that drives leaders to undertake ?great enterprises? and do ?great things? on behalf of their fellow citizens and not just themselves.? Hard to find a better description of Bogle himself." (MarketWatch) ?Mr Bogle?s prescription for a better system is relatively simple: to demand proper fiduciary management from money managers. They must prioritise client interests, act as responsible corporate citizens, charge reasonable fees and eliminate conflicts of interest. Amen to that. It may sound like nostalgia from an old-timer, or idealism from a visionary. But without such changes, investors and society will continue to be short-changed as the financial community carries on regardless.? (Financial Times) ?In Don?t Count on It! Reflections on Investment Illusions, Capitalism, ?Mutual? Funds, Indexing, Entrepreneurship, Idealism, and Heroes, Bogle hammers at what he labels the cost matters hypothesis: Whether markets are efficient or inefficient, investors as a group must fall short of the market return by precisely the amount of the aggregate costs they incur. It is the central fact of investing. Not surprisingly, the book deals extensively with the low-cost innovation for which Vanguard is best known: the stock index mutual fund. When the company first made indexing available to small investors in 1975, critics derided the notion as ?Bogle?s folly.? To Bogle, however, the benefits to investors were irrefutable. . .  The impact of indexing has been so great that a second, hugely important contribution by Vanguard has been overshadowed. Vanguard originated the now standard segmentation of bond funds into short-, intermediate-, and long-term varieties. Bogle was enshrined in the Fixed Income Analysts Society Hall of Fame for this innovation. The author of Don?t Count on It! does not dwell on such honors, which include being named one of the world?s 100 most powerful and influential people by Time magazine. In fact, Bogle devotes the final section of his book to tributes to four of his own heroes: Walter Morgan, economist Paul Samuelson, investment guru Peter Bernstein, and Dr. Bernard Lown, a Nobel laureate whom he credits with keeping him alive in defiance of a mystifying heart ailment. Bogle also shows modesty in sharing credit for his contributions to the field and in downplaying his own theoretical expertise. His unashamed display of such old-fashioned virtues, as well as his heretical view that running a business is not entirely about maximizing the wealth of the owners, has earned him the nickname ?St. Jack.?? (Financial Analysts Journal)  

Review Quote

"Don't Count on It! is a wise book. As most traders and investors remain convinced that they can beat the market, it's always sobering to hear a compelling voice from the other side." (Seeking Alpha) "If Bogle writes it, it's worth reading. His latest, Don't Count On It, is a collection of 35 essays, every one of them filled with wisdom and insight. . . While I have read Bogle's views on these issues many times, I'm always impressed with the quality of his writing (Where else can you read quotations from Adam Smith to Winston Churchill to Cato?), the wit and humility he shows and his passion to help investors. The book is a compelling read, one that in effect tells the story and mission of a great man. We're lucky and privileged to have him fighting on our side. As Bogle noted in his book, Machiavelli "described the accumulation of worldly 'glory' as the motivating principle that drives leaders to undertake 'great enterprises' and do 'great things' on behalf of their fellow citizens and not just themselves." Hard to find a better description of Bogle himself." (MarketWatch) "Mr Bogle's prescription for a better system is relatively simple: to demand proper fiduciary management from money managers. They must prioritise client interests, act as responsible corporate citizens, charge reasonable fees and eliminate conflicts of interest. Amen to that. It may sound like nostalgia from an old-timer, or idealism from a visionary. But without such changes, investors and society will continue to be short-changed as the financial community carries on regardless." (Financial Times) "In Don't Count on It! Reflections on Investment Illusions, Capitalism, "Mutual" Funds, Indexing, Entrepreneurship, Idealism, and Heroes , Bogle hammers at what he labels the cost matters hypothesis: Whether markets are efficient or inefficient, investors as a group must fall short of the market return by precisely the amount of the aggregate costs they incur. It is the central fact of investing. Not surprisingly, the book deals extensively with the low-cost innovation for which Vanguard is best known: the stock index mutual fund. When the company first made indexing available to small investors in 1975, critics derided the notion as "Bogle's folly." To Bogle, however, the benefits to investors were irrefutable. . . The impact of indexing has been so great that a second, hugely important contribution by Vanguard has been overshadowed. Vanguard originated the now standard segmentation of bond funds into short-, intermediate-, and long-term varieties. Bogle was enshrined in the Fixed Income Analysts Society Hall of Fame for this innovation. The author of Don't Count on It! does not dwell on such honors, which include being named one of the world's 100 most powerful and influential people by Time magazine. In fact, Bogle devotes the final section of his book to tributes to four of his own heroes: Walter Morgan, economist Paul Samuelson, investment guru Peter Bernstein, and Dr. Bernard Lown, a Nobel laureate whom he credits with keeping him alive in defiance of a mystifying heart ailment. Bogle also shows modesty in sharing credit for his contributions to the field and in downplaying his own theoretical expertise. His unashamed display of such old-fashioned virtues, as well as his heretical view that running a business is not entirely about maximizing the wealth of the owners, has earned him the nickname 'St. Jack.'" (Financial Analysts Journal)

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