Motley Fool Interviews Vanguard Founder John Bogle

Speaking of being a BogleHead, I just finished listening to an interview of Bogle on NPR’s Motley Fool radio show, available online here. Thanks to reader Jonathan for sending it to me. John (Jack) Bogle, if you don’t know, is the founder of The Vanguard Group, and is known as the father of index funds.

My favorite part was where the Motley Fool asks him about picking individual stocks. Remember, Motley Fool makes their money by selling their stock picks. You can just feel Bogle trying not to rip them. He holds back and just says “the odds are against you”. Hah. To satisfy the stock-picking urge that many of us suffer from, he recommends a “funny money” account, much like my play money portfolio.

The main reason for the interview was to promote his new book The Battle for the Soul of Capitalism, which suggests that corporations are controlled by their managers, not the shareholders as it was intended. This because we have become a nation of share-renters, not share-owners. The average mutual fund today holds a share of stock for only 1 year, as opposed to 6 years in the 1950s. In other words, we don’t really care what’s under the hood, we just want it to run fast while we have it. When’s the last time you changed the oil on a rental car? Of course, the interveiwer points out that mutual funds themselves also serve to disconnect shareholders from the actual companies they are buying. Interesting stuff.

The whole clip is about 15 minutes long, if you’ve got the time I’d recommend listening to it.

Comments

  1. houstons28 says:

    - Jonathan if your really want to know about investing on the stock market buy the book GET YOU SHARE from julie stav. or visit or website http://www.juliestav.com believe, i got one and is the best by far, because the book will help you to undertand step by sted when, why and how to invest on the stock market.

  2. Hmm… To me that looks like a very simplified technical trading book. I’ll browse through it next time I’m at Borders, but I really doubt it’s for me. I also don’t understand how an stock investing book can be targeted towards a specific gender? =)

  3. I have to admit I’ve always felt mildly uneasy with The Motley Fool. They’re known as a responsible source for investing advice, but they get so caught up in “the next great stock pick” that I worry they distract investors from considering sound fundamental investing philosophies. They get overly sensationalistic. I’d definitely refer a beginning investor to Bogle first.

  4. I have to say that I think your understanding of the Motley Fool is a bit lacking. It is true that much of their revenue comes from selling newsletters, but their number one advice for the average person who doesn’t have time to spend investing is to buy a no-load index fund like the S&P 500.

  5. I’ve been following the Fool for years. While they used to have a lot of good advice and still do, they’ve definitely been tilting towards more stock pick pushing.

    Just open up Fool.com and take a look at the main page. Count the # of articles promoting individual stock picking and then count the number of articles promoting index funds. “Profiling the Next Superstock”. “Six Signs of a Winner” “Stock-Picking Madness”. See what I mean? Hey, they need to eat, right?

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