WEBVTT - Jack Brennan on Succeeding the Legendary John Bogle (Podcast) 0:00:00.080 --> 0:00:06.080 M. This is Mesters in Business with Very Renaults on 0:00:06.240 --> 0:00:11.000 Blueberg Radio. This week on the podcast, I have an 0:00:11.119 --> 0:00:15.200 extra extra special guest. It's the return of Jack Brennan. 0:00:15.560 --> 0:00:20.280 He is the former CEO and chairman of the Vanguard Group. 0:00:20.880 --> 0:00:23.520 And what can I tell you? This is just a 0:00:23.600 --> 0:00:31.360 tourtive force about rational investing strategies, behavior psychology. There are 0:00:31.360 --> 0:00:35.200 a few people in the world who have Brennan's depth 0:00:36.000 --> 0:00:40.519 of experience and perspective. Not just because he worked with 0:00:40.640 --> 0:00:44.920 Jack Bogel for dozens of years and was Bogel's handpicked 0:00:45.320 --> 0:00:49.080 successor to run the Vanguard Group, but he's done a 0:00:49.159 --> 0:00:51.960 variety of other things. He's on all sorts of other boards. 0:00:52.479 --> 0:00:56.680 He sees the world of investing and business and finance 0:00:57.440 --> 0:01:01.520 um from a three D and sixty re perspective. I 0:01:01.560 --> 0:01:05.720 find him not only just fascinating and intelligent and sincere, 0:01:06.240 --> 0:01:08.840 but really one of the few people who has that 0:01:09.600 --> 0:01:13.880 full view of everything. His perspectives, his opinions are very 0:01:13.920 --> 0:01:17.399 well informed and and really matter a great deal. I 0:01:17.480 --> 0:01:20.280 found this to be a fascinating conversation and I think 0:01:20.319 --> 0:01:24.319 you will also so. With no further ado, the former 0:01:24.640 --> 0:01:29.800 chairman and CEO of the Vanguard Group. Jack Brennan. This 0:01:30.400 --> 0:01:34.840 is Mesters in Business with Very Renorts on Bluebird Radio. 0:01:35.920 --> 0:01:40.360 HI extra special guest is Jack Brennan. He was the 0:01:40.440 --> 0:01:45.240 CEO and chairman of the Vanguard Group from two thousand 0:01:45.240 --> 0:01:48.360 and eight. He is currently chairman of Notre Dame's Board 0:01:48.360 --> 0:01:51.680 of Trustees, as well as being on a variety of 0:01:51.680 --> 0:01:54.240 other boards. He is the author of a new book, 0:01:54.760 --> 0:01:59.720 More Straight Talk on investing Lessons for a Lifetime. Jack 0:02:00.000 --> 0:02:04.000 and in Welcome back to Bloomberg, Great Meridi, Very good 0:02:04.040 --> 0:02:06.960 to have you back. I recall our last conversation was 0:02:07.080 --> 0:02:10.600 quite fascinating a couple of years ago. But for people 0:02:10.639 --> 0:02:12.679 who may have missed it, let's let's just spend a 0:02:12.760 --> 0:02:17.240 few minutes going over your history. You joined Vanguard in 0:02:18.960 --> 0:02:23.800 serving as the company's president alongside Jack Bogel, the founder 0:02:23.840 --> 0:02:26.280 and CEO of Vanguard. Tell us a little bit what 0:02:26.320 --> 0:02:28.720 it was like in the eighties and what it was 0:02:28.760 --> 0:02:31.519 like working with a legend like Jack Bogel. Well, it 0:02:31.840 --> 0:02:33.519 was a gift to be hired by Jack Bogel and 0:02:33.760 --> 0:02:36.839 to join Vanguard when I did. Bangard was a quite 0:02:36.840 --> 0:02:41.839 small place for point four billion dollars in assets undermanagement. 0:02:42.480 --> 0:02:45.120 The industry is you might recall back in eighty two 0:02:45.240 --> 0:02:47.480 was driven mostly by money market funds. You know, at 0:02:47.520 --> 0:02:50.040 Socks hadn't done much for a long time. Bonds had 0:02:50.080 --> 0:02:53.600 been terrible because we were in the stagflation. You're coming 0:02:53.600 --> 0:02:56.800 out of it. But the chance to work side by 0:02:56.840 --> 0:02:58.680 side with someone like Jack, we've been in the business 0:02:58.720 --> 0:03:01.600 since the day graduated from Princeton in nineteen fifty one, 0:03:01.639 --> 0:03:04.840 was extraordinary. You know, we had lunch together nearly every 0:03:04.919 --> 0:03:07.720 day when I was in town over thirteen plus years. 0:03:08.520 --> 0:03:10.480 I learned a ton of stuff from him in so 0:03:10.520 --> 0:03:13.720 many ways, as did the whole team of us that 0:03:14.080 --> 0:03:17.480 we're part of the early days of the growth phase 0:03:17.520 --> 0:03:21.000 of Angard from eighty two as the markets turned around 0:03:21.000 --> 0:03:23.680 and it turned into be a pretty good business today. 0:03:23.720 --> 0:03:24.880 We had a lot of fun, went through a lots 0:03:24.919 --> 0:03:28.560 of business challenges, many of which were challenges of success. 0:03:28.600 --> 0:03:30.919 How do you keep a place together as you grow 0:03:30.919 --> 0:03:34.160 at a percent some years? Uh, and that you know 0:03:35.720 --> 0:03:38.720 compounded for all those years we also went through on 0:03:38.720 --> 0:03:40.240 the personal side. You know, Jack had a lot of 0:03:40.280 --> 0:03:42.640 health challenges that you know, I tried to be helpful 0:03:42.720 --> 0:03:46.400 with and obviously lived with him through those. I had 0:03:46.480 --> 0:03:49.160 some on my family's side, and those kinds of things 0:03:49.160 --> 0:03:51.880 bond as well, very in a way that's different than 0:03:51.880 --> 0:03:55.120 a conventional just a business relationship, and was really another 0:03:55.120 --> 0:03:59.160 shared experience. So you know, you get lucky sometimes, and 0:04:00.040 --> 0:04:03.800 joining Vanguard and working with Jack and for Jack was tremendous. 0:04:03.840 --> 0:04:06.120 Were thinking about that the other day. Actually, just a 0:04:06.160 --> 0:04:07.960 couple of years ago, you know, Jack and Pat Jack 0:04:07.960 --> 0:04:10.960 passed away and we had a celebration of life form 0:04:11.280 --> 0:04:13.520 at Vanguard and I was privileged to kick it off 0:04:13.640 --> 0:04:15.560 and just hit a four things that are lessons actually 0:04:15.600 --> 0:04:18.800 maybe for your listeners that really, you know, you think 0:04:18.800 --> 0:04:21.400 about what Vanguard is today, it was not that when 0:04:21.600 --> 0:04:25.880 Jack launched in n But four things were consistent and 0:04:25.920 --> 0:04:28.400 hopefully you're very much still part of the company. And 0:04:28.760 --> 0:04:31.520 one was just the dedication of the mission of Vanguard 0:04:31.720 --> 0:04:35.440 those who followed Jack. He was continually on point about client, 0:04:35.480 --> 0:04:39.960 client clients. The second is passion for competitive success. You know, 0:04:40.120 --> 0:04:42.320 nobody liked to fight more than Jackie picked one now 0:04:42.360 --> 0:04:45.320 and then UH to try to get publicity for us 0:04:45.480 --> 0:04:48.800 and UH and things. But that focus on wanting to 0:04:48.839 --> 0:04:53.640 win hugely, hugely valuable. The third thing that was remarkable, 0:04:53.800 --> 0:04:57.520 really to watch and learn from the power of communication, 0:04:57.880 --> 0:05:03.560 and you know, just consist can see and continual continually 0:05:03.640 --> 0:05:06.239 promoting in a sense what the message for the company 0:05:06.480 --> 0:05:09.760 was powerful force and the last thing focus. You know, 0:05:10.120 --> 0:05:13.800 we'd have people come to us very continually saying issue 0:05:13.839 --> 0:05:17.239 credit cards, do mortgages, do this, and Jack would always 0:05:17.279 --> 0:05:19.640 come back and say, now we do one thing pretty well. 0:05:19.720 --> 0:05:22.680 We've managed package products in the form of mutual funds. 0:05:22.920 --> 0:05:25.320 Let's just go find people to buy them. So, when 0:05:25.640 --> 0:05:30.560 Vogel finally stepped down, you were as handpicked successor did 0:05:30.600 --> 0:05:33.719 you feel the weight of that transition or was he 0:05:33.920 --> 0:05:37.960 still not quite the legend he eventually became, and it 0:05:38.000 --> 0:05:41.880 didn't have the same gravitas that perhaps it does today. 0:05:42.520 --> 0:05:45.480 You know, in some ways, not too much. In some ways, 0:05:45.680 --> 0:05:48.560 certainly you feel the weight of it. In a sense, 0:05:48.760 --> 0:05:51.440 not so much. Was you know, We've just been handing 0:05:51.480 --> 0:05:55.159 gloves together for thirteen years. I've been on the board 0:05:55.240 --> 0:05:59.159 for nine or something like that, the president for seven 0:05:59.200 --> 0:06:02.560 or eight, and most of the team that led the 0:06:02.600 --> 0:06:05.920 company I'd either hired or promoted and mentored along the way. 0:06:06.000 --> 0:06:09.320 So so the internal aspects of change weren't weren't very 0:06:09.320 --> 0:06:12.839 great and in that sense, and so it was incredibly smooth. 0:06:13.240 --> 0:06:17.520 H And frankly, when I've been made the president, the 0:06:17.560 --> 0:06:19.760 board didn't he had announced that I would take his place, 0:06:19.839 --> 0:06:22.960 which was a little weird, but um, I think probably 0:06:23.000 --> 0:06:27.600 helpful in some ways, uh, internally in that regard. But 0:06:27.680 --> 0:06:30.159 the the other part of it is, um, you know, 0:06:30.360 --> 0:06:33.960 Jack had been the CEO from sin when this was announced, 0:06:34.080 --> 0:06:37.800 and I'm the new guide as some slice of the constituencies. 0:06:37.960 --> 0:06:40.159 And you know, in a sense you have to prove 0:06:40.200 --> 0:06:43.240 yourself to two people who knew Jack as the face 0:06:43.279 --> 0:06:47.159 of the company, and we're very different, different ideas around 0:06:47.360 --> 0:06:50.320 that role. But you feel a way to it. And 0:06:50.400 --> 0:06:54.200 you know, I don't know any CEO who, irrespective of 0:06:54.720 --> 0:06:58.159 you know, his or her tenure at a company, who 0:06:58.200 --> 0:07:02.000 the day they become the scene, oh it. Uh, they 0:07:02.000 --> 0:07:04.400 don't feel the weight of it. It's a different It's 0:07:04.440 --> 0:07:06.640 different on day one than it was on day minus 0:07:06.720 --> 0:07:10.920 one when you become CEO. And that was a surprise 0:07:10.960 --> 0:07:12.360 to me in some lay. I have to say, I 0:07:12.920 --> 0:07:16.000 didn't expect it and I felt it. And I can't 0:07:16.040 --> 0:07:19.840 sold low CEOs continually as they're moving into jobs that 0:07:20.040 --> 0:07:23.480 they will feel it and of the people say you're right, 0:07:23.560 --> 0:07:27.200 I get that really interesting. I love this quote you 0:07:27.320 --> 0:07:31.120 had in Business Week where you said, quote, being famous 0:07:31.240 --> 0:07:33.560 was never on my agenda unquote. And you tell the 0:07:33.640 --> 0:07:37.880 story You're coaching your son's soccer team and another player's 0:07:38.000 --> 0:07:40.880 mom comes up to you and says, I didn't realize 0:07:40.880 --> 0:07:43.600 you were that Jack Brennan. She thought you were a 0:07:43.720 --> 0:07:47.840 gym teacher. What was that transition like into the public eye. 0:07:48.160 --> 0:07:50.960 That was the hardest part of it, because it's just 0:07:51.080 --> 0:07:55.480 not me. I love having tons of responsibility of bandrad 0:07:55.520 --> 0:07:57.280 and having nobody know my name. I don't think I 0:07:57.360 --> 0:07:59.200 was a gym teacher when I was coaching, right, And 0:07:59.640 --> 0:08:01.920 you take the job, you have to make that change. 0:08:02.080 --> 0:08:05.760 And you know, I'm a big believer that being the 0:08:05.960 --> 0:08:10.560 leader is notoriety enough, and that any credit for stuff 0:08:10.600 --> 0:08:13.760 that happens positively in an organization should go to the team. 0:08:14.200 --> 0:08:17.280 And he blamed that something that goes awry should you 0:08:17.280 --> 0:08:20.840 should accept that as the leader. And so it was. 0:08:20.960 --> 0:08:25.240 It was a challenge and an interesting one, particularly because 0:08:25.640 --> 0:08:29.240 you will recall, you know, the fund industry was kind 0:08:29.280 --> 0:08:33.000 of on the sidelines in in finance, if you will. 0:08:33.559 --> 0:08:36.239 When I started out there, and then we were progressively 0:08:36.320 --> 0:08:40.400 but by we were very prominent part of the business. 0:08:40.520 --> 0:08:44.959 And so with all of the industry and and and 0:08:45.240 --> 0:08:49.000 company responsibilities, you really do have to change and adapt. 0:08:49.080 --> 0:08:51.400 And it's a growth opportunity for anybody who falls into 0:08:51.440 --> 0:08:54.079 that role. I think particularly challenged for someone like me 0:08:54.200 --> 0:08:58.400 who is Anonymity is something that is highly prized, uh, 0:08:58.800 --> 0:09:00.839 which makes me like an and not comment as I 0:09:00.920 --> 0:09:03.640 do this thing through this interview with you, but it's 0:09:03.920 --> 0:09:06.200 it's very much real. That was I would say, hands 0:09:06.240 --> 0:09:09.000 down the hardest change for me as I took over 0:09:09.080 --> 0:09:11.839 the as the CEO of the company. That's the beauty 0:09:11.880 --> 0:09:15.760 of radio. Nobody knows what you look like exactly. So 0:09:16.200 --> 0:09:21.880 two questions about your leadership period at Vanguard. Tell us 0:09:21.920 --> 0:09:24.880 what you're most proud of from that period and if 0:09:24.960 --> 0:09:26.640 you had a mulligan, if you can have a do 0:09:26.840 --> 0:09:30.160 over for one thing, what what would that? Big? Yeah, 0:09:30.200 --> 0:09:31.920 I get asked what are you most proud of? Question 0:09:32.040 --> 0:09:34.280 all the time, Verry, and I think the three things 0:09:34.400 --> 0:09:39.000 that that matter first and foremost is the team that 0:09:39.559 --> 0:09:43.199 you've helped put together over time and trig in a 0:09:43.600 --> 0:09:47.280 rapidly grown company where you know the team almost can't 0:09:47.280 --> 0:09:50.000 grow quickly enough to keep up with the challenges in 0:09:50.040 --> 0:09:52.480 the company. But you know, from top to bottom, we 0:09:52.559 --> 0:09:55.439 were able to attract and help build great careers for 0:09:55.640 --> 0:09:58.440 people who had a sign on to this quirky mission 0:09:58.440 --> 0:10:00.960 in a quirky place where you're not public company, you're 0:10:01.000 --> 0:10:04.319 not private, you're owned by your mutual fund shareholders. But 0:10:04.520 --> 0:10:07.280 maintaining and enhancing the commitment to that, to our mission 0:10:07.720 --> 0:10:11.120 and the intense competitive edge and deal in the face 0:10:11.240 --> 0:10:14.840 of you know what, in many ways is UH remarketable success. 0:10:15.520 --> 0:10:18.599 That that's a thing that I look back and I 0:10:18.679 --> 0:10:21.000 look today at Vanguard and see it there and really 0:10:21.040 --> 0:10:25.200 proud of that tangibly the billions and billions and billions 0:10:25.280 --> 0:10:28.559 of incremental rewards you delivered to the shareholders because of 0:10:28.600 --> 0:10:33.040 our structure, because our funds performed well critically important part. 0:10:33.120 --> 0:10:35.360 And that's that's what you're there for. That's why you 0:10:35.440 --> 0:10:38.319 put your shoes on every day, um, you know. And 0:10:38.400 --> 0:10:40.480 then probably the last thing that I always like to 0:10:41.120 --> 0:10:45.080 highlight is the culture, which you would think would get 0:10:45.160 --> 0:10:48.640 diluted as it grew in by a hundred and then 0:10:48.920 --> 0:10:51.760 a thousand times would get diluted. I think the culture 0:10:52.559 --> 0:10:57.280 got stronger progressively and continues to get stronger around again, 0:10:57.320 --> 0:11:01.160 the singular focus on the client, and then even more 0:11:01.240 --> 0:11:04.080 important in many ways, always doing it the right way. 0:11:04.920 --> 0:11:06.640 So I look at that and say, that's a that's 0:11:06.640 --> 0:11:09.280 a template if somebody said, you'll be around a long 0:11:09.400 --> 0:11:12.360 time and you'll feel this good about those three things 0:11:13.120 --> 0:11:17.400 high on my list of things. As to the Mulligan, 0:11:17.440 --> 0:11:20.040 I might need a roving a few roving. Mulligan's right 0:11:20.600 --> 0:11:24.480 in some ways the UH. I once said a relatively 0:11:24.520 --> 0:11:28.880 new person as officer at Vanguard, I think she was 0:11:28.880 --> 0:11:31.000 trying to insolve me, and I thought she was complimenting me. 0:11:31.160 --> 0:11:34.520 She said, I I live in a perpetual state of dissatisfaction, 0:11:35.880 --> 0:11:37.920 and I think it is a compliment. I could give 0:11:37.960 --> 0:11:39.720 you a really long list, but I'll give you one 0:11:39.760 --> 0:11:42.679 thing that I look back and say, we we had 0:11:42.760 --> 0:11:44.560 it right and didn't do it right, if you will, 0:11:44.679 --> 0:11:48.199 and that is advice and support for the advice community. 0:11:48.600 --> 0:11:52.800 You know, Vanguard today is a burgeoning advice business delivering 0:11:53.800 --> 0:11:56.800 a great product at a great price. And we started 0:11:57.040 --> 0:12:00.400 in the advice business twenty five years ago. But I 0:12:00.760 --> 0:12:04.199 wasn't aggressive and I wasn't aggressive enough in saying we 0:12:04.240 --> 0:12:07.920 should really build this out in a form and fashion, 0:12:08.280 --> 0:12:11.719 and then as a compliment, be even more aggressive in 0:12:11.800 --> 0:12:15.040 supporting the advisor community. There was a legacy there. We 0:12:15.160 --> 0:12:17.520 used to be a load fun group. We became no 0:12:17.720 --> 0:12:20.040 load and so on. But it was clear to us 0:12:20.160 --> 0:12:22.319 that advice was going to be a crucial part of 0:12:22.600 --> 0:12:26.360 the investing future, and very importantly so. And if I 0:12:26.440 --> 0:12:28.600 look back and say, if there's one thing I would 0:12:28.640 --> 0:12:30.280 have spent a lot more money, put a lot more 0:12:30.400 --> 0:12:33.520 energy behind, it's that. And I'm really glad to see 0:12:33.520 --> 0:12:35.280 the companies doing it on both sides of that. By 0:12:35.320 --> 0:12:38.760 the way, delivering advice and then supporting advice providers, it's 0:12:38.800 --> 0:12:42.160 a core, very core part of Anger today. I wish 0:12:42.240 --> 0:12:45.480 we'd been much more advanced during my time leading a company. 0:12:46.320 --> 0:12:49.840 Really interesting, let's talk a little bit about your new book. 0:12:50.360 --> 0:12:52.760 By the way, am I reading this right? The first 0:12:52.840 --> 0:12:56.040 book was straight talk on investing. Correct. It was because 0:12:56.080 --> 0:12:58.280 I read that one. You know, it's got to be 0:12:58.360 --> 0:13:00.840 five years ago when we did our person interview, when 0:13:00.880 --> 0:13:04.839 I plowed through whatever notes I had from that. Is 0:13:04.960 --> 0:13:07.079 this an update or is this a brand new book. 0:13:07.240 --> 0:13:10.719 It's a combination. It's one of the great lessons in 0:13:10.880 --> 0:13:13.959 redoing and doing another book is the core of the 0:13:14.000 --> 0:13:17.280 book really hasn't changed, actually, And then there's lots of 0:13:18.520 --> 0:13:21.160 you think about this person one's book published in two 0:13:21.240 --> 0:13:25.280 thousand two. So you've got the GFC, you've got the 0:13:27.200 --> 0:13:31.040 last year, you've got twenty years almost to say how 0:13:31.760 --> 0:13:35.040 it's the aftermath of the dot com bubble of GFC 0:13:35.320 --> 0:13:38.520 and what we've been through. And you say, because what 0:13:38.720 --> 0:13:43.439 we've wrote then withstand the test of time. It's actually 0:13:43.840 --> 0:13:47.880 it's rarities are enhanced by that test of time. And 0:13:48.000 --> 0:13:49.640 then there's some other new stuff that we can talk 0:13:49.679 --> 0:13:53.400 about it. But it's the advent of Ridholds Advisors and 0:13:53.600 --> 0:13:58.480 Vanguard's advisory services. It's radical decline and cost of investing 0:13:58.520 --> 0:14:01.400 in twenty years it's stunning, and some other stuff that 0:14:02.400 --> 0:14:05.839 is important. So it's a combination of new and new 0:14:06.040 --> 0:14:10.199 and reaffirmation of what was in the private book. Well, 0:14:10.320 --> 0:14:14.160 some of the basics from the other book is pretty timeless. Homework, 0:14:14.240 --> 0:14:18.480 good habits, no fads, stay, continue to learn. I mean 0:14:18.600 --> 0:14:22.960 that's pretty straight talk as it gets. So tell us 0:14:23.080 --> 0:14:26.920 what motivated that approach. I appreciate the term straight talk. 0:14:27.000 --> 0:14:29.920 I had one of my colleagues at Vanguard the other 0:14:30.040 --> 0:14:33.560 day asked me do I enjoy being boring? And uh, 0:14:34.400 --> 0:14:38.080 and the with with this advice, But you know, um, 0:14:39.080 --> 0:14:42.520 it's what motivates it is this is the time tested 0:14:43.000 --> 0:14:48.480 way serious money gets invested successfully. And that might be 0:14:49.120 --> 0:14:52.200 an endowment at a great university, it may be a 0:14:52.280 --> 0:14:56.280 pension fund. And this is really targeted at people who 0:14:56.320 --> 0:14:59.280 are their own personal financial entrepreneurs with their own assets, 0:14:59.360 --> 0:15:01.800 and they can get help from an advisor, they can 0:15:01.840 --> 0:15:04.480 do it themselves whatever. But if you look back over 0:15:04.800 --> 0:15:11.359 decades and decades very in some ways simple approach to investing, 0:15:11.480 --> 0:15:14.800 as you just highlighted around homework, good habits, avoiding fads 0:15:15.640 --> 0:15:18.800 is the proven strategy and the problem is it's always 0:15:18.920 --> 0:15:22.560 challenged right by the new news thing. And so you know, 0:15:23.320 --> 0:15:26.920 we found, we find that it's important to reaffirm these 0:15:27.280 --> 0:15:30.320 test them, by the way, and there's unlimited amounts of 0:15:30.440 --> 0:15:33.760 data as you know, to look and and test them. 0:15:34.400 --> 0:15:37.800 But you come back to these core principles that define 0:15:38.000 --> 0:15:42.640 success strategies for any of us, whether an institutional investor 0:15:42.720 --> 0:15:46.800 in individuals. So that's the that's the motivation of it. 0:15:47.000 --> 0:15:49.680 And you know, for me personally, it's Uh, I had 0:15:49.720 --> 0:15:52.120 the privilege of knowing Walter or Morgan who found in 0:15:52.200 --> 0:15:59.080 Wellington Fund. So I've had live tutorial from Mr Morgan. Jack. 0:15:59.560 --> 0:16:05.280 Now now I'm the old guy and had hired ends 0:16:05.360 --> 0:16:09.080 of advisors and advisory firms, have observed millions of investors, 0:16:09.960 --> 0:16:14.200 and you come back to core character traits that defined success, 0:16:14.240 --> 0:16:17.800 as you know, and in the end, there's two character 0:16:17.880 --> 0:16:21.760 traits that matter. One is humility and the other's discipline. 0:16:22.440 --> 0:16:25.840 And then there's some practices that matter. And if you 0:16:26.000 --> 0:16:30.040 find that package in yourself or in your advisor or 0:16:30.120 --> 0:16:33.120 in the firm you hired to manage assets for you, 0:16:34.120 --> 0:16:37.680 you're going to be successful. And if you don't, the 0:16:37.760 --> 0:16:40.360 odds are you will not, and you will look jealously 0:16:40.480 --> 0:16:45.080 at people who followed these old school practices and old 0:16:45.200 --> 0:16:50.920 school behaviors and have won the game. Really interesting, Let's 0:16:50.960 --> 0:16:54.720 stick with the idea of character such as humility and 0:16:54.840 --> 0:16:58.600 discipline and just ask a simple question, why are so 0:16:58.760 --> 0:17:03.480 many investors quote their own worst enemy unquote? Uh, you 0:17:03.560 --> 0:17:07.480 know one word and its emotions, right, And whether it's 0:17:07.520 --> 0:17:11.800 fear agreed, whether it's competitive juices that you're sister in 0:17:11.920 --> 0:17:16.800 law beta killing in some stocks, whether it's over confidence. 0:17:18.000 --> 0:17:21.240 Whether it's an institution saying I've got a hustle or 0:17:21.280 --> 0:17:25.240 I'm going to get fired by an institutional client. It's 0:17:25.480 --> 0:17:29.359 emotion is an incredible headwind of success in building and 0:17:29.440 --> 0:17:34.760 maintaining financial security and through the markets. The story that's 0:17:34.800 --> 0:17:37.200 played out again and again and again over time. And 0:17:37.920 --> 0:17:41.960 you know, so you need to understand that simple. I 0:17:42.080 --> 0:17:44.600 will be my own worst enemy unless I take emotion 0:17:44.640 --> 0:17:48.199 out of the equation. Hard to do. It's easier with experience. 0:17:48.720 --> 0:17:51.760 But that's a simple answer to it. Verry, Let's stick 0:17:51.800 --> 0:17:55.879 with the idea of emotion as a valid factor. And 0:17:56.240 --> 0:17:58.119 I have to ask you one of the things you 0:17:58.200 --> 0:18:02.720 write about people would be more selective about the financial 0:18:02.960 --> 0:18:06.840 content they consume. Explain what you mean by that, you know, 0:18:06.920 --> 0:18:09.399 one of the best things that's happened in my career 0:18:09.520 --> 0:18:15.399 since the early eighties today is the ability for individuals 0:18:15.480 --> 0:18:20.400 in particular about all of us too uh learn whether 0:18:20.600 --> 0:18:23.280 in the early days it was Money magazine and today 0:18:23.400 --> 0:18:29.399 it's just obviously the ubiquity of information on through online media. 0:18:30.359 --> 0:18:34.640 It's so different than um than it was a long 0:18:34.720 --> 0:18:37.840 time ago. The downside of that, it's like everything too 0:18:37.920 --> 0:18:41.000 much of a good things about and so there's too 0:18:41.080 --> 0:18:45.440 much information, too readily available, too broadly covered. That it's 0:18:45.480 --> 0:18:51.040 a distraction, and distractions will lead to other emotions very 0:18:51.119 --> 0:18:54.760 and that that is the that is I think that 0:18:55.040 --> 0:18:59.520 the core challenge h and why people really need to say. 0:19:01.600 --> 0:19:05.920 I find certain writers on Bluebird valuable to me, and 0:19:06.000 --> 0:19:09.080 I'm going to follow them because they provide me with 0:19:09.240 --> 0:19:12.879 information I find valuable as an investor. But zigging and 0:19:13.040 --> 0:19:15.680 bagging from this hot topic to that hot topic, or 0:19:15.760 --> 0:19:21.360 this influencer to that you know prognosticator is just damaging 0:19:21.400 --> 0:19:24.119 to your financial well being, and always it has proven 0:19:24.200 --> 0:19:27.040 to be, and I suspect you'll always will be because 0:19:27.440 --> 0:19:30.320 you know, this isn't a game, and it's not how 0:19:30.400 --> 0:19:33.440 the Red Sox do last night, right, Hoyla Red Sox 0:19:33.480 --> 0:19:36.119 did last night actually matters this year to their chances 0:19:36.200 --> 0:19:39.680 to make the playoffs. But what happened in the markets 0:19:39.800 --> 0:19:43.600 today matters to almost nobody who you and I know, 0:19:44.520 --> 0:19:47.359 because they have long term time horizons, right, and they're 0:19:47.359 --> 0:19:50.760 not traders managing a book at at a Wall Street firm. 0:19:51.280 --> 0:19:53.800 There are people thinking about ten and twenty and forty 0:19:53.920 --> 0:19:56.320 years from now. So what happens today is in significance. 0:19:56.880 --> 0:20:02.200 So let's continue with that thought. Sometimes bear markets come along, 0:20:02.440 --> 0:20:05.399 and that seems to be what drives a lot of 0:20:05.520 --> 0:20:08.800 the sort of hair on fire hand waving in a 0:20:08.920 --> 0:20:12.960 lot of the media. How should people think about bear markets? 0:20:13.040 --> 0:20:15.600 How should they prepare for one? And how should they 0:20:15.880 --> 0:20:20.679 behave during a bear market? So actually, in in uh 0:20:21.160 --> 0:20:23.239 in more straight talk, we have old chapter on bear 0:20:23.359 --> 0:20:26.320 markets for a reason, and it's because they're an inevitable 0:20:26.440 --> 0:20:31.040 part of investing if you're investing over a career, in 0:20:31.119 --> 0:20:33.240 a four ohn K plan or over a lifetime. So 0:20:33.720 --> 0:20:37.400 when you recognize they're going to happen, and then your 0:20:37.480 --> 0:20:40.960 question is is spot on? You say, so, what should 0:20:41.040 --> 0:20:44.000 we do? Well? One, you should you know, on a 0:20:44.119 --> 0:20:49.359 strategic basis, know what your risk tolerance is and be 0:20:49.600 --> 0:20:56.359 prepared for. Then test that risk tolerance against your portfolio structure, diversification, 0:20:56.440 --> 0:20:59.159 your balance to say, am I gonna be able to 0:20:59.200 --> 0:21:03.560 sleep at night at the ark? It drops fair question 0:21:03.840 --> 0:21:05.800 and you should know it. And by the way, if 0:21:05.840 --> 0:21:09.479 you've only been investing in this century, if you've had 0:21:09.520 --> 0:21:12.119 a chance to test that, how did you think? What 0:21:12.240 --> 0:21:14.280 did you think about in October of two thousand eight, 0:21:14.320 --> 0:21:17.720 what did you think about in March of could you 0:21:17.800 --> 0:21:21.800 not sleep? Etcetera. So you you understand their reality, you 0:21:21.960 --> 0:21:28.280 prepare structurally in your portfolio and importantly in your mental preparation. 0:21:29.119 --> 0:21:30.680 Am I going to react or am I going to 0:21:31.280 --> 0:21:36.959 assume that? In over my time horizon? This is uh 0:21:37.160 --> 0:21:41.800 in inevitable, an inevitable thing. But it I'm not going 0:21:41.840 --> 0:21:44.560 to do anything about it. Um And the answer for 0:21:44.600 --> 0:21:46.760 most people is doing nothing in a bare market. It 0:21:46.840 --> 0:21:50.000 really is um because most people have a long term 0:21:50.080 --> 0:21:52.359 time horizon. I was talking to Tim Buckley, who's the 0:21:52.400 --> 0:21:55.800 CEO Advance Great CEO of Van Guard uh uh, the 0:21:55.880 --> 0:21:59.880 other day. He said they calculated that by not pay 0:22:00.040 --> 0:22:05.000 that King, Vanguard investors saved a trillion dollars trillion dollars. 0:22:06.000 --> 0:22:07.920 And the difference the important thing that gets back to 0:22:07.960 --> 0:22:11.359 your question on which you consume from an education standpoint 0:22:11.440 --> 0:22:14.520 or an information standpoint. Fact, when I started at Vanguard, 0:22:14.600 --> 0:22:17.440 the activity level with small changes in the stocker bond 0:22:17.520 --> 0:22:22.440 market was frenhetic today, and Vanguard's just a microcosm of 0:22:22.480 --> 0:22:26.680 the market. More broadly, serious people generally don't panic, and 0:22:26.880 --> 0:22:29.199 you don't see that at a Vanguard. I assume it's 0:22:29.240 --> 0:22:31.080 true at a fidelity and the zero price that you 0:22:31.200 --> 0:22:34.320 don't see panic where before they had a chance to 0:22:34.359 --> 0:22:38.359 get experience and educated. My generation of baby boomers would react. 0:22:38.960 --> 0:22:41.840 So do nothing should be your default option during a 0:22:41.920 --> 0:22:46.960 bearer market. And if you can dollar cost average down 0:22:47.840 --> 0:22:50.600 even better, but don't pass. It makes a whole lot 0:22:50.680 --> 0:22:53.440 of sense. So you wrote the first version of the 0:22:53.560 --> 0:22:57.640 book about twenty years ago? What made you think, Hey, 0:22:57.800 --> 0:23:01.240 now is the time to update this? Why bringing into 0:23:01.359 --> 0:23:06.040 the modern era? And who are you hoping actually reads it? 0:23:06.640 --> 0:23:10.719 So with respect to the why now, a few things 0:23:10.760 --> 0:23:12.480 I've been asked a lot over the years. Would you 0:23:12.720 --> 0:23:17.240 would you do another version of this? And? Uh, frankly, 0:23:17.280 --> 0:23:21.680 the environment is what props it? And if you know, 0:23:21.880 --> 0:23:26.320 if you take out last March, um, we've been eleven 0:23:26.400 --> 0:23:31.880 year bull markets. The headlines are you read the headlines 0:23:31.960 --> 0:23:37.600 about investing and and it's uh, speculation is very prominent. Again, 0:23:38.640 --> 0:23:41.120 Um the headlines or somebody made a lot of money 0:23:41.160 --> 0:23:43.120 on game stoff? You don't read a lot about those 0:23:43.160 --> 0:23:45.680 who get killed and so on and so forth. You're 0:23:45.960 --> 0:23:48.480 trading is the new thing you can Oh, I saw 0:23:48.520 --> 0:23:52.359 an ad on TV. You can start a trading account 0:23:52.400 --> 0:23:55.440 at one firm with as little as five dollars, I 0:23:55.520 --> 0:23:58.840 must fell out of my chair. So it was catalyst 0:23:58.960 --> 0:24:00.720 to say, you know what, it feels a lot like 0:24:00.960 --> 0:24:04.040 when I started writing the first book was just after 0:24:04.200 --> 0:24:07.600 the as back bubble, but lots of lessons to affirm there, 0:24:08.280 --> 0:24:10.160 and this one felt like it felt like a good 0:24:10.240 --> 0:24:13.800