The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

R.I.P. Jack Bogle

01/17/2019

The three greatest names in investment history are Benjamin Graham, Harvey Markowitz, and Jack Bogle.

Benjamin Graham literally wrote the original ground-breaking book on Security Analysis in 1934.  He advocated the accounting or fundamental approach to investing.  You must know all the details of the company’s financial statements.  You must interview management, as well as the firm’s auditors, and visit its major facilities.  He mentored Warren Buffett and died in 1976 at the age of 82.  Warren Buffett remembers him as a most generous person.

Harry Markowitz won the Nobel prize for his “Modern Portfolio Theory”, which argued that investment returns could be increased, while decreasing risk, if your portfolio was allocated properly across numerous asset classes.  I have been fortunate to have met him twice.  He is a crusty 92-year-old living in San Diego.  Live Long!

Jack Bogle was the founder of investing giant firm of Vanguard and died yesterday at age 89.  He introduced index investing, arguing regular investors cannot spend so much time investing in each stock.  He argued investors should simply buy the index (such as the Dow, S&P, etc.) and hold it forever, keeping their costs as low as possible.  He gave birth to “buy-and-hold” investing, as well as passive investing.  Warren Buffett said the Jack Bogle has done more for the average American investor than anyone.  Most of all, he will be remembered as a true gentleman, respectful of every person he met.  I shall miss his decency and humility.

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