RIP Jack Bogle

"If a statue is ever erected to honor the person who has done the most for American investors, the handsdown choice should be Jack Bogle.... In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me. --Warren Buffett (2016 Annual Letter)

John Bogle, who founded Vanguard and revolutionized retirement savings, dies at 89 (LINK)

Jason Zweig recounts Mr. Bogle's long and influential career (video) (LINK)

***

Back when I was first reading Jack Bogle's book Enough, I emailed him the following quote from Seneca that I thought was a perfect compliment to the things he had written about in his book: 

"What difference does it make how much there is laid away in a man's safe or in his barns, how many head of stock he grazes or how much capital he puts out at interest, if he is always after what is another's and only counts what he has yet to get, never what he has already. You ask what is the proper limit to a person's wealth? First, having what is essential, and second, having what is enough." 

Mr. Bogle was kind enough to both respond to my email as well as pass along some words of encouragement to a young man still early on in his investment career. A short while later, I came across another quote that reminded me of his book, and again passed it along. Though not quite as fitting as the one above, it was a longer quote from Arthur Schopenhauer:

"It is difficult, if not impossible, to define the limits which reason should impose on the desire for wealth; for there is no absolute or definite amount of wealth which will satisfy a man. The amount is always relative, that is to say, just so much as will maintain the proportion between what he wants and what he gets; for to measure a man's happiness only by what he gets, and not also by what he expects to get, is as futile as to try and express a fraction which shall have a numerator but no denominator. A man never feels the loss of things which it never occurs to him to ask for; he is just as happy without them; whilst another, who may have a hundred times as much, feels miserable because he has not got the one thing he wants. In fact, here too, every man has an horizon of his own, and he will expect as much as he thinks it is possible for him to get. If an object within his horizon looks as though he could confidently reckon on getting it, he is happy; but if difficulties come in the way, he is miserable. What lies beyond his horizon has no effect at all upon him. So it is that the vast possessions of the rich do not agitate the poor, and conversely, that a wealthy man is not consoled by all his wealth for the failure of his hopes. Riches, one may say, are like sea-water; the more you drink the thirstier you become; and the same is true of fame."

He once again replied with kindness and, as he put it, delight that those of us who digested his work made interesting connections to other things. And as I look back at the quotes above, they once again seem fitting ways to describe a great man that gave far more than he took from the world, and was always happy with having enough.

***

And since it's only fitting to let Mr. Bogle have the last word, let's go back to the inaugural issue of CFA Magazine (Jan/Feb 2003). Charley Ellis moderated a panel of investing greats (Bernstein, Bogle, Brinson, Buffett, LeBaron, Neff, and Templeton), and the final question he asked the panel was: "Given the option to say whatever you would like to say that, 30 years from now, bright, young people would be sitting down and reading, saying 'Gee, I'm glad I was able to read this particular thought,' what would that thought be?" Bogle's reply, which was the last among the panel members: 

"First, put the client’s interest ahead of your own, and, one day at a time, help to make this field of investing more of a profession and less of a business. Second, learn every day, but especially learn from the experiences of others. It’s cheaper! And third, never, never lose your idealism, no matter how rough your career might be, and never lose faith in your nation."

Links

Despite steady profits, railroads have laid off thousands - and more cuts are likely on the way [H/T Linc] (LINK)

A Dozen Attributes of a Scalable Business - by Tren Griffin (LINK)

Exponent podcast: Episode 122 — From Intel to Disney (LINK)

Tips for saving money on a trip to Disney World (LINK)

Arthur Schopenhauer: the first European Buddhist [H/T The Browser] (LINK)

Book of the day (to be released in December): A Dozen Lessons for Entrepreneurs - by Tren Griffin

What a man is contributes much more to his happiness than what he has...

From Arthur Schopenhauer in The Wisdom of Life:

...what a man is contributes much more to his happiness than what he has, or how he is regarded by others. What a man is, and so what he has in his own person, is always the chief thing to consider; for his individuality accompanies him always and everywhere, and gives its color to all his experiences. In every kind of enjoyment, for instance, the pleasure depends principally upon the man himself. Every one admits this in regard to physical, and how much truer it is of intellectual, pleasure. When we use that English expression, “to enjoy one’s self,” we are employing a very striking and appropriate phrase; for observe — one says, not “he enjoys Paris,” but “he enjoys himself in Paris.” To a man possessed of an ill-conditioned individuality, all pleasure is like delicate wine in a mouth made bitter with gall. Therefore, in the blessings as well as in the ills of life, less depends upon what befalls us than upon the way in which it is met, that is, upon the kind and degree of our general susceptibility. What a man is and has in himself — in a word personality, with all it entails, is the only immediate and direct factor in his happiness and welfare. All else is mediate and indirect, and its influence can be neutralized and frustrated; but the influence of personality never.

....................

Related previous posts:

Arthur Schopenhauer quote

Arthur Schopenhauer reading and learning quotes

Links

Howard Marks: Keep Calm and Invest On (video) (LINK)

Famed investor Howard Marks shares his insights on the value of remaining calm in troubled times at the Bloomberg Markets Most Influential Summit in New York. 

Bill Miller Plans a Return to His Roots (LINK)

Bill Miller, Jim Chanos And Robert Bishop: Delivering Alpha Unfiltered (full video) [H/T ValueWalk] (LINK)

Planet MicroCap Podcast: Episode 28 - What is an ‘Intelligent Fanatic’ with Sean Iddings, Co-Author of “Intelligent Fanatics Project” (LINK)

Robert Cialdini on The Owner's Mind podcast (LINK)

Related book: Pre-Suasion

Freakonomics Radio: Why Are We Still Using Cash? (LINK)

Related book: The Curse of Cash

TED Talk - Sebastian Kraves: The era of personal DNA testing is here (LINK)

TED Talk - Sam Harris: Can we build AI without losing control over it? (LINK)

How Philosophy Drives Discovery: A scientist's view of Popper (LINK)

In this talk, the 8th Sir Karl Popper Memorial Lecture, Sir Paul Nurse will discuss how the philosophical works of Karl Popper have informed the practice of his own scientific research activities, indicating where it has helped and where it has required modifications. 

The Cato chronicles, part III: commander, and brother (LINK)

Related book: Rome's Last Citizen: The Life and Legacy of Cato, Mortal Enemy of Caesar

Book/Essay of the day: The Wisdom of Life - by Arthur Schopenhauer (If you buy this Kindle edition for $0.99, you can also add the audiobook when checking out, which was just released a couple of months ago, for $2.99.)

Links

Interview with Warren Buffett's investment manager Ted Weschler: The recipe for financial success (LINK)

Investing is kind of a game of connecting the dots. The nice thing about it is the longer you are in the business, as long as you are intellectually curious, your collection of data points of dots gets bigger and bigger. That is where someone like Warren is just incredible. He has had a passion for investing for well over 70 years. He started by the age of 10 or 12. He keeps building that library of data, the ability to recognize patterns in data. Being a successful investor you need to be hungry, intellectually curious, interested, read all the time. Read a lot of newspapers. You need a certain level of randomness in order to connect things that might give you an insight into where a business is going in five years that somebody else might not see. 

When it comes to wholly owned businesses among other factors it is about pricing power. You have something that is so attractive to the consumer that they pay a premium to walk into your store and do something. There is a number of attributes like that. But you can never just point to one thing. It is a mosaic of all sort of different things. If then you read the book of a business you can pretty quickly find out if that is a good business or not. 

... 

I am a big fan of newspapers. I read at least one or two in paper form, the other ones on my iPad. We own a lot of newspaper at Berkshire Hathaway. I am always intrigued by who is doing what in the online business. Because everybody is coming up with presenting things in a better format. I read at least five newspapers a day. 

...I have a tradition. I always start each day with reading the local paper of the town I wake up in. Then next one would be USA Today. That gets you a general feeling for the Zeitgeist. They package the news for the entire population. From an investing standpoint it is relevant to understand what everybody is thinking. Then I generally move up to the New York Times, then the Wall Street Journal and then I end with the Financial Times. And actually I recently just started reading the Handelsblatt global edition.

Economic implications of Brexit - by Ben Bernanke (LINK)

Paul Krugman with Gillian Tett at the 92nd Street Y [This was from a couple of months ago, so pre-Brexit, but Brexit gets discussed after China.] (video) (LINK) [China discussion around the 25:40 mark... "China looks ready to have a possibly scary bust. China is having a capital flight now...Last year it was a trillion dollars...China is a bomb ready to go off."]

Andy Andres: "Sabermetrics 101: Introduction to Baseball Analytics" | Talks at Google (video) (LINK)

Brain Pickings: Schopenhauer on What Makes a Genius and the Crucial Difference Between Talent and Genius (LINK)

Related books: The World as Will and Representation, Vol. 1, The World as Will and Representation, Vol. 2  [I also highly recommend Schopenhauer's The Wisdom of Life.]

100 Million Years of Decorating Yourself In Junk (LINK)

Book of the day: Do Humankind's Best Days Lie Ahead?: The Munk Debates

In the seventeenth semi-annual Munk Debates, which was held in Toronto on November 6, 2015, pioneering cognitive scientist Steven Pinker and bestselling author Matt Ridley squared off against noted philosopher Alain de Botton and bestselling author Malcolm Gladwell to debate whether humankind’s best days lie ahead.

Links

Schopenhauer: On Reading and Books (LINK)

Related previous post: Arthur Schopenhauer quote

Horizon Kinetics: Utilities - Running on Empty: Major Disruption Ahead (LINK)

The attached white paper was originally published in late 2014. However, we feel it sufficiently relevant, despite the modest 10% to 15% decline since year-end, such that it continues to bear reading. The Utilities sector was among the best-performing of 2014. Yet, it is not much represented in Horizon Kinetics strategies, despite the sector’s 3% weight in the S&P 500 Index®. This is not an oversight. 

We believe the Utilities sector is in the midst of a largely unrecognized bubble—a valuation correction of the scale we anticipate has never befallen it before. The source of the valuation risk, aside from any substantive increase in interest rates—which would be no small matter—is a threat to demand. The largest (of a number) of drivers for this drop is the emergence of solar power as a viable source for a meaningful share of the electricity supply. One need only look at the European experience (particularly in Germany) to preview what might occur in the United States as solar power adoption increases.

Larry Page on Google and Alphabet (LINK)

The SEC filing for the Google announcement of Alphabet  (LINK)

Alphabet Lets Google Chase Moonshots and Stay Profitable (LINK)

In an interview with The Financial Times in October, Page said there’s no precedent for the company he wants to build. But it seems he’s taking a page or two from the most successful investor in Wall Street history: Warren Buffett, who runs the vast conglomerate Berkshire Hathaway. 

Indeed, Page pointed to Buffet as someone who knows how to lead the kind of company he and Google co-founder Sergey Brin have in mind. And according to The Wall Street Journal, Page went even further in December during a meeting with top shareholders, saying Berkshire Hathaway—which spans everything from insurance to underwear to aerospace supplies—exemplifies how a large, complex company should be run. “Mr. Buffett has a cadre of CEOs running operating companies and doles out capital from the holding company to these businesses based on their performance each year,” the Journal wrote.

Fred Wilson on Google and Alphabet (LINK)

China Moves to Devalue Yuan (LINK)

Books of the day (since I felt the urge to watch the Pale Blue Dot video a few times last night):

Pale Blue Dot: A Vision of the Human Future in Space 

The Demon-Haunted World: Science as a Candle in the Dark

“Science is not only compatible with spirituality; it is a profound source of spirituality. When we recognize our place in an immensity of light‐years and in the passage of ages, when we grasp the intricacy, beauty, and subtlety of life, then that soaring feeling, that sense of elation and humility combined, is surely spiritual. So are our emotions in the presence of great art or music or literature, or acts of exemplary selfless courage such as those of Mohandas Gandhi or Martin Luther King, Jr. The notion that science and spirituality are somehow mutually exclusive does a disservice to both.” 

-Carl Sagan

Arthur Schopenhauer quote

“Men of learning are those who have read the contents of books. Thinkers, geniuses, and those who have enlightened the world and furthered the race of men, are those who have made direct use of the book of the world.” –Arthur Schopenhauer

Arthur Schopenhauer reading and learning quotes

Found via Farnam Street:

“Ignorance is degrading only when it is found in company with riches. Want and penury restrain the poor man; his employment takes the place of knowledge and occupies his thoughts: while rich men who are ignorant live for their pleasure only, and resemble a beast; as may be seen daily. They are to be reproached also for not having used wealth and leisure for that which lends them their greatest value.

When we read, another person thinks for us: we merely repeat his mental process. It is the same as the pupil, in learning to write, following with his pen the lines that have been pencilled by the teacher. Accordingly, in reading, the work of thinking is, for the greater part, done for us. This is why we are consciously relieved when we turn to reading after being occupied with our own thoughts. But, in reading, our head is, however, really only the arena of some one else’s thoughts. And so it happens that the person who reads a great deal — that is to say, almost the whole day, and recreates himself by spending the intervals in thoughtless diversion, gradually loses the ability to think for himself; just as a man who is always riding at last forgets how to walk. Such, however, is the case with many men of learning: they have read themselves stupid. … And just as one spoils the stomach by overfeeding and thereby impairs the whole body, so can one overload and choke the mind by giving it too much nourishment. For the more one reads the fewer are the traces left of what one has read; the mind is like a tablet that has been written over and over. Hence it is impossible to reflect; and it is only by reflection that one can assimilate what one has read if one reads straight ahead without pondering over it later, what has been read does not take root, but is for the most part lost.”

…

“One can never read too little of bad, or too much of good books: bad books are intellectual poison; they destroy the mind.

In order to read what is good one must make it a condition never to read what is bad; for life is short, and both time and strength limited.”

…

“It is because people will only read what is the newest instead of what is the best of all ages, that writers remain in the narrow circle of prevailing ideas, and that the age sinks deeper and deeper in its own mire.”

…

“It would be a good thing to buy books if one could also buy the time to read them; but one usually confuses the purchase of books with the acquisition of their contents. To desire that a man should retain everything he has ever read, is the same as wishing him to retain in his stomach all that he has ever eaten. He has been bodily nourished on what he has eaten, and mentally on what he has read, and through them become what he is. As the body assimilates what is homogeneous to it, so will a man retain what interests him; in other words, what coincides with his system of thought or suits his ends. Every one has aims, but very few have anything approaching a system of thought. This is why such people do not take an objective interest in anything, and why they learn nothing from what they read: they remember nothing about it.”

…

“Any kind of important book should immediately be read twice, partly because one grasps the matter in its entirety the second time, and only really understands the beginning when the end is known; and partly because in reading it the second time one’s temper and mood are different, so that one gets another impression; it may be that one sees the matter in another light.”

Words of Wisdom

I'll be taking a break from the blog for a few days, so I thought I’d post some quotes I found interesting before taking a going on a brief hiatus.

Howard Marks, The Most Important Thing:

Many people possess the intellect needed to analyze data, but far fewer are able to look more deeply into things and withstand the powerful influence of psychology. To say this another way, many people will reach similar cognitive conclusions from their analysis, but what they do with those conclusions varies all over the lot because psychology influences them differently. The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.

From The Invisible Hands:

The prevailing wisdom looks at cash on a historical basis, which completely neglects the inherent opportunity costs associated with a lack of cash. By this I mean simply that cash affords you flexibility; if you have cash, you can allocate that cash when attractive opportunities arise. By taking a backward look at cash, you wind up focusing on the rate it has earned historically. The correct way to measure the return on cash is more dynamic: cash is bounded on the lower side by its actual return, whereas the upper side possesses an additional element of positive return received from having the ability to take advantage of unique opportunities.

…

Holding cash when markets are cheap is expensive, and holding cash when markets are expensive is cheap.

From Boombustology:

One of the most important elements of a boom–bust sequence that helps one identify where in the cycle one might be is, to use language from epidemiology, the population of unaffected or unexposed individuals. When one hears that everyone, including those not traditionally active or invested in the market, is “in the market,” then one might naturally (and accurately) assume that the boom cycle is far along and very mature (perhaps approaching expiration), with a limited population of infectable participants.

Arthur Schopenhauer, “the Wisdom of Life”:

Absolute value can be predicated only of what a man possesses under any and all circumstances,--here, what a man is directly and in himself. It is the possession of a great heart or a great head, and not the mere fame of it, which is worth having, and conducive to happiness.

…

And so people who feel that they possess solid intellectual capacity and a sound judgment, and yet cannot claim the highest mental powers, should not be afraid of laborious study; for by its aid they may work themselves above the great mob of humanity who have the facts constantly before their eyes, and reach those secluded spots which are accessible to learned toil. For this is a sphere where there are infinitely fewer rivals, and a man of only moderate capacity may soon find an opportunity of proclaiming a theory which shall be both new and true; nay, the merit of his discovery will partly rest upon the difficulty of coming at the facts.

Art De Vany, The New Evolution Diet:

Out of this tragedy came my attitude that I have only one moment of power, which is now, and that I can determine not the outcome but only the probable path.

Seneca, Letters from a Stoic (also posted these HERE):

Nothing, to my way of thinking, is a better proof of a well ordered mind than a man’s ability to stop just where he is and pass some time in his own company.

…

It is not the man who has too little who is poor, but the one who hankers after more.

From Meditations by Marcus Aurelius (reminds me of Ben Franklin’s process for achieving virtue):

It should be a man's task, says the Imitation, 'to overcome himself, and every day to be stronger than himself.' 'In withstanding of the passions standeth very peace of heart.' 'Let us set the axe to the root, that we being purged of our passions may have a peaceable mind.' To this end there must be continual self-examination. 'If thou may not continually gather thyself together, namely sometimes do it, at least once a day, the morning or the evening. In the morning purpose, in the evening discuss the manner, what thou hast been this day, in word, work, and thought.'

Viktor Frankl, Man's Search for Meaning:

Forces beyond your control can take away everything you possess except one thing, your freedom to choose how you will respond to the situation. You cannot control what happens to you in life, but you can always control what you will feel and do about what happens to you.

…

Live as if you were living already for the second time and as if you had acted the first time as wrongly as you are about to act now!