Category: Careers

John Bogle’s Recent San Francisco Talk

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Kathleen Pender:

Bogle believes investors should simply buy the lowest-cost index funds available and hold them forever. His rule of thumb is to take your age minus 10 and hold that percentage of your assets in a total bond market index fund and the rest in a total stock market index fund. For example, a 30-year old would put 20 percent in bonds and 80 percent in stocks.


This strategy nearly eliminates “the two greatest enemies of equity investing — expenses and emotions,” Bogle said.


Bogle’s attitudes have barely changed since he started the first index fund in August 1976.


That fund, now called Vanguard Index 500, has about $112 billion in retail assets and is the second-largest fund after American Funds’ Growth Fund of America, according to Morningstar.

Bogle wrote the excellent “Battle for the Soul of Capitalism“.

The Next Capitalism

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Robert Samuelson:

When he died in 1848, John Jacob Astor was America’s richest man, leaving a fortune of $20 million that had been earned mainly from real estate and fur trading. Despite his riches, Astor’s business was mainly a one-man show. He employed only a handful of workers, most of them clerks. This was typical of his time, when the farmer, the craftsman, the small partnership and the independent merchant ruled the economy. Only 50 years later, almost everything had changed. Giant industrial enterprises — making steel, producing oil, refining sugar and much more — had come to dominate.

The rise of big business is one of the seminal events in American history, and if you want to think about it intelligently, you consult historian Alfred D. Chandler Jr., its pre-eminent chronicler. At 88, Chandler has retired from the Harvard Business School but is still churning out books and articles. It is an apt moment to revisit his ideas because the present upheavals in business are second only to those of a century ago.

Until Chandler, the emergence of big business was all about titans. The Rockefellers, Carnegies and Fords were either “robber barons” whose greed and ruthlessness allowed them to smother competitors and establish monopolistic empires. Or they were “captains of industry” whose genius and ambition laid the industrial foundations for modern prosperity. But when Chandler meticulously examined business records, he uncovered a more subtle story. New technologies (the railroad, telegraph and steam power) favored the creation of massive businesses that needed — and, in turn, gave rise to — superstructures of professional managers: engineers, accountants and supervisors.

Still Built on the Homefront

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Timothy Aeppel:

While many U.S. manufacturers are decamping to greener, and cheaper, pastures overseas, Bobcat, a division of Ingersoll-Rand Co. Ltd., has found advantages sticking close to its North Dakota roots to build the little machines that, among other things, are used to clean barns, dig dirt and plow snow. Bobcat has exploited its location to keep a finger on the pulse of its core market of small landscaping and construction contractors, helping it quickly develop and ship products. Also, the company’s rural setting, executives say, has bred the kind of culture where problems are solved with the can-do, make-do ethos of the farm.

“There are a lot of barriers any foreign producer has to overcome to give us a real challenge,” says Richard F. Pedtke, the president of Ingersoll-Rand’s compact vehicle division.

For example, the company usually can deliver any of the hundreds of attachments it sells for its machines to a customer within four days, a feat almost impossible and certainly costly for any company with long supply lines stretching overseas. And by keeping manufacturing, engineering, and marketing closely linked, with people in those roles sometimes living across the street from each other, the company is better able to anticipate how markets are shifting and find new applications for its machines, says Mr. Pedtke.

Words With Jerry Brown

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Jill Stewart:

The most enduring and intriguing California politician of our generation is sitting in a sidewalk café, enjoying a balmy offshore breeze in this city’s upscale Belmont Shore district. Yet not a single passerby knows it’s him.

Laid-back shoppers stream past in linen sundresses and camouflage shorts. This decidedly un-hip man is slightly out of place in his conservative gray suit, fussy dress shirt and white Carroll O’Connor eyebrows. He’s not Arnold, instant traffic-stopper. Yet if anyone peered closely, they’d probably recognize the burning eyes of Oakland Mayor Jerry Brown, the darkly handsome upstart governor of the 1970s, now a gray and balding 68-year-old.

He’s just emerged from a nearly invisible summer to launch a blatantly negative TV ad against his rival for attorney general of California, and he’s finally granting interviews — including one to me. Barring a brilliant turnaround by his lesser-known but respected competitor, Republican state Sen. Charles Poochigian of Fresno, Mr. Brown will be the next California attorney general.

I voted for Jerry once, in the 1992 Presidential Primary.

Stressed Air Travel System?

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Flying around recently, amid full planes, high fuel prices, employees who have endured some tough years and challenging weather, it seems to me that the airlines, while trying very hard to make money, are really stretching their employees and systems. Juggling planes and tickets amid cancellations and delays one night, I ended up on a 777. Passengers boarded the full flight, were instructed to close the overhead bins and buckle up. Minutes before departure, the steward announced that there were no pilots. They would be arriving in 45 minutes and we were free to get off the plane….. The steward, when asked, mentioned that they just found out about this (no pilots! – seems odd in 2006 that they were not aware that the pilots were not around, what with elaborate crew and equipment management software). I grabbed my bags and ran over to my prior, delayed flight, swapped tickets and was later on my way.

This, and other recent examples make me wonder how far the airlines can push their systems and people…. I also noticed a number of rather rude passengers along with some great, hard working airline employees.

Don’t Stop….Start

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Doug Sundheim:

If you want to change something in your life, it’s common to try to stop the behaviors you don’t like. While this certainly seems logical, it seldom works. The reason is simple – it unintentionally creates a vacuum where the old behaviors used to be. And since nature hates a vacuum it will fill it with anything it can find – usually the very behaviors you’re trying to stop since they’re so familiar. Instead of stopping certain behaviors, try focusing on what you want to create – and the new behaviors you need to get there. Eventually, with practice, new behaviors will develop enough muscle to naturally replace the old ones.

How Successful People Remain Successful

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Knowledge @ Wharton:

When James C. Collins and Jerry I. Porras wrote their hugely popular 1994 book, Built to Last: Successful Habits of Visionary Companies, they began by stating clearly that they did not mean to write about visionary leaders. Their goal was to find visionary companies — the crown jewels of their industries — and discover what made them extraordinary. Then questions arose about the extent to which the principles of Built to Last might apply to individuals. That sparked another investigation that has now led to a follow-up book, Success Built to Last, which will be published by Wharton School Publishing later this year.

Making a Market in Talent

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Lowell L. Bryan, Claudia I. Joyce, and Leigh M. Weiss:

Savvy companies understand the competitive value of talented people and spend considerable time identifying and recruiting high-caliber individuals wherever they can be found. The trouble is that too many companies pay too little attention to allocating their internal talent resources effectively. Few companies use talented people in a competitively advantageous way—by maximizing their visibility and mobility and creating work experiences that help them feed and develop their expertise. Many a frustrated manager has searched in vain for the right person for a particular job, knowing that he or she works somewhere in the company. And many talented people have had the experience of getting stuck in a dead-end corner of a company, never finding the right experiences and challenges to grow, and, finally, bailing out