“The Clash of the Cultures: Investment vs. Speculation”
is a must read for investors who want to understand the forces that are working against them and what they can do about it to maximize their investment returns. It should come as no surprise to those who know Jack and his philosophy that the final words of his final book are: ‘Stay the course!’—Forbes
“The Clash of the Cultures: Investment vs. Speculation
is . . . an enjoyable read that ends with 10 lessons for investors that, while simple, are deeply valuable to the general public. . . Clash of the Cultures
is a great summary of the breadth of Bogle's 60-plus years in the investment field. He offers observations on the shocking change in the culture of finance that he has witnessed first-hand. Among the most important of the shifts is that short-term speculation has crowded out long-term investment. Though this has been great for the financial sector, it has come at the expense of the public.” —CBS MoneyWatch
“Bogle, as the Godfather of index investing, has ideas that are timeless and based on simple math, and at the same time exhibit uncommon sense and a routinely overlooked view of how investors are consistently overcharged by the financial services industry. Fortunately, his wisdom is widely available to everyone. Much of that wisdom has been assembled in Bogle's most recent book The Clash of the Cultures: Investment vs. Speculation (Wiley, 2012). While most of the insights are time-honored themes in the Bogle canon, they are very useful for individual investors.” —Reuters
“Bogle's latest book tackles what looks like an artificial distinction. His Clash of the Cultures title conjures thoughts of world war and social strife. But he's talking about ‘investment vs. speculation’. . . As in his previous books, Bogle is a master of the clear point and the pithy quote - from the investment writings of John Maynard Keynes and Benjamin Graham, pension adviser Keith Ambachtsheer and Bogle's old mentor the late Walter L. Morgan, as well as the Gospels of Luke and John.”—Philadelphia Inquirer
“You know what to expect when opening a book by John Bogle, founder of the Vanguard mutual fund group and inventor of index funds: a lament about the fall from grace of the US mutual fund industry, and a restatement of his strong conviction that COSTS MATTER!!! Mr Bogle’s new book, The Clash of the Cultures , Investment vs Speculation, does not disappoint on either count, but it is also very much in tune with the zeitgeist in its focus on stewardship and fiduciary duty. It lambasts US mutual fund managers for neglecting to act as responsible owners of the companies they invest in on behalf of the savers whose money they look after, and for their own governance failures.”—The Financial Times
“[The Clash of the Cultures] echoes many familiar . . . themes worth repeating, because they are too often ignored. Investors spend so much time chasing hot asset classes and hot fund managers that they end up buying high and selling low, all the while incurring transaction costs. In Mr Bogle’s words, ‘investors need to understand not only the magic of compounding long-term returns, but the tyranny of compounding costs.’ . . . The American pension-fund industry has been particularly bad at understanding these long-run fundamentals. Many schemes assume, on the basis of past performance, a return of 7.5-8%, a figure that is highly implausible given the current low yields. . . Meanwhile, many employees in the private sector have been switched into defined-contribution schemes. . . But employees are not saving enough, are not allocating their portfolios efficiently and are incurring too many costs. It is hard to disagree with Mr Bogle that the ‘system of retirement security is imperilled, heading for a serious train wreck.’ But will anybody listen to him, when they haven’t in the past?” —The Economist
“John Bogle’s latest book, as much a piece of history as is it a playbook for how to repair financial markets scarred by two bear markets in 10 years and a loss of confidence, is one of those books on finance that ought not be left unread. The Clash of the Cultures is the latest and perhaps best book by the founder of Vanguard Group. . . Plus, for those not familiar with Bogle’s prose, the man can turn a phrase, which makes the book all the more enjoyable.”—IndexUniverse
“If the Occupy Wall Street movement is serious about helping people with real financial issues, then its leaders should read John Bogle’s book and embrace his ideas for change.”—Rick Ferri, Forbes.com
“John Bogle’s story is an oft-told tale, yet even Bogle junkies will learn some fascinating new facts from The Clash of the Cultures. Bogle takes of the cudgels on behalf of investors, who he believes have been poorly served by most of the industry. Bogle brings invaluable historical perspective to current issues ranging from high-frequency trading to the looming crisis in the U.S. retirement system to the use of mutual fund investors’ money to promote the growth of assets under management. Every thoughtful investor can benefit from his wisdom, served up with refreshing modesty by a giant in a field notorious for outsized egos.” —Financial Analysts Journal
“The book is a gem. Well-researched and carefully argued, there's simply no way to argue with Bogle's premises -- that the little guy always loses, that the more you churn the more you lose, that most people's retirements are dramatically underfunded, that management looks out for itself and not the stockholders, and that greed is driving the bus. . . Read Bogle, not just to learn about how to protect your investments and understand what really happens on Wall Street. But more than that, read The Clash Of The Cultures and declare yourself into the three percent who have ideas and aren't afraid to use them.” —The Huffington Post
From the Inside Flap
During the course of his sixty-one year career, mutual fund pioneer and Vanguard Group founder John C. Bogle has seen enormous expansion and remarkable change in the financial sector of the U.S. economy. In his tenth book, The Clash of the Cultures: Investment vs. Speculation, he brings his considerable wisdom and experience to bear on the most troubling developments of the recent erathe crowding out of long-term investment by short-term speculation.
During Bogle's career in the investment profession, he's witnessed a change in the very nature of our financial system, and not for the better. Our aggressive culture of destructive and costly speculation has come to dominate the earlier prudent culture of investment. To the detriment of our society, the idea of stewardship has gotten lost in the shuffle, replaced by salesmanship and innovations that have ill-served investors.
Far more than being a mere eyewitness to the last six decades of financial history, Bogle has been one of its most active participants. The many first-hand experiences he recounts include the creation of the first index fund and the creation of the first exchange-traded fund; and his critical role in the rise, the fall, and the renaissance of Wellington Fund, a real-world case study of the clash between investment and speculation. He sheds new light on the dramatic change in the culture of the mutual fund industry, the multiple ways in which speculation has invaded our retirement system, and the need for a federal standard of fiduciary duty.
Insightful and instructive, the book paints an alarming picture of how the financial world has moved away from a culture focused on value-adding long-term investment towards a value-destroying culture of rampant speculationand the inevitable clash of these two cultures brought about by this transformation. Bogle concludes his book by outlining ten simple investment rules to help investors avoid the many hazards of investing and, by focusing on simplicity and economy, to meet their investment goals.