Bogleheads® Conference 2023 - Jonathan Clements with Charley Ellis

00:00:00.000 | [ Applause ]

00:00:06.520 | I will just quickly introduce Jonathan Clements,

00:00:09.000 | who in turn will introduce Charlie.

00:00:11.200 | Jonathan was on the last panel.

00:00:13.160 | He is a former Wall Street Journal columnist.

00:00:16.640 | I will say for me as a young analyst working at Morningstar,

00:00:20.400 | he was my favorite part of the journal

00:00:22.640 | and really very much influenced my own career path to talk more

00:00:26.400 | about personal finance and financial planning.

00:00:29.920 | And has the Humble Dollar blog and also was involved

00:00:34.720 | in a great book project, a book I just love that has come

00:00:37.920 | out over the past year called My Money Journey, which is essays

00:00:42.160 | by people about how they found their own financial footing.

00:00:46.120 | So Jonathan, if you can come up here and introduce Charlie

00:00:49.520 | or do you want to sit tight?

00:00:51.160 | Okay, great.

00:00:51.840 | Thanks, Jonathan.

00:00:54.080 | >> Good morning, everybody.

00:00:56.720 | I moved back to the United States from London in 1986

00:01:01.320 | and I became a reporter at Forbes Magazine,

00:01:05.800 | which meant that basically I was a glorified fact checker.

00:01:08.400 | I spent the next two years of my life trying to make sure

00:01:11.240 | that the senior writers didn't make too many errors

00:01:13.400 | in the magazine.

00:01:15.000 | But one of the nice things about the job was

00:01:17.560 | that you had a certain amount of free time.

00:01:19.760 | And Forbes also at the time had a great library.

00:01:24.760 | And that's where I got my personal finance education.

00:01:28.200 | And going through the stacks down in the second floor library,

00:01:34.360 | I came across this book called Investment Policy.

00:01:38.760 | Now, Charlie, that really wasn't a very catchy title, was it?

00:01:44.120 | Investment Policy was a book that came out in 1985,

00:01:49.440 | but it really grew out of a financial analyst journal article

00:01:54.200 | that appeared a decade earlier in 1975 called The Loser's Game.

00:01:59.640 | And it was, of course, written by Charlie Ellis.

00:02:03.000 | So, Charlie, tell us a little bit about the story behind

00:02:06.600 | that essay and how it evolved

00:02:09.600 | into what's become a phenomenally selling book,

00:02:12.160 | Winning the Loser's Game.

00:02:14.280 | >> Do you mind if I take just a minute and go

00:02:18.880 | in another direction and then come back?

00:02:21.600 | >> You know, you are a difficult individual, I know,

00:02:24.160 | but go ahead.

00:02:25.960 | [ Laughter ]

00:02:27.280 | >> I'm looking out at this really large audience.

00:02:31.400 | And those of you who I've met obviously have certain

00:02:37.000 | characteristics.

00:02:38.520 | I'd like you to think just for a minute about Jack Bogle,

00:02:45.960 | how he had a nightmare and he had a dream.

00:02:50.960 | His nightmare was that he would be forgotten.

00:02:56.680 | And it really, really mattered to Jack that he not be forgotten.

00:03:02.200 | As he told me, the only reason I'm really writing books is

00:03:04.760 | so I might not be forgotten, at least for a while.

00:03:07.840 | But I'm really, really worried about being forgotten.

00:03:12.240 | And if you look at this group or walk the hallway

00:03:15.720 | or that lovely sign out front with Jack's picture,

00:03:19.680 | you realize, oh, Jack, you may be gone,

00:03:22.760 | but you're certainly not forgotten.

00:03:25.440 | The second thing --

00:03:27.960 | [ Applause ]

00:03:34.520 | The second thing is, Jack was a real tightwad,

00:03:39.520 | and he made a celebration out of being stingy and cheap.

00:03:45.800 | [ Inaudible ]

00:03:49.800 | And how he would take personal [inaudible]

00:03:52.040 | to save a couple of nickels.

00:03:54.720 | He would be thrilled.

00:03:56.680 | This is the first time in 50 years that I've been

00:03:59.320 | in a public speaking situation with no fee whatsoever.

00:04:03.800 | [ Laughter ]

00:04:05.800 | [ Applause ]

00:04:12.400 | So back to your question.

00:04:14.840 | I happen to love tennis as a game.

00:04:18.200 | It doesn't take very long to get there.

00:04:21.080 | You can play for as long as you feel like,

00:04:23.800 | and then you've got plenty of time left

00:04:25.240 | over for the rest of your day.

00:04:26.520 | Whereas golfers, it takes a while to get there,

00:04:29.360 | and it's a long, long game,

00:04:31.160 | particularly if the weather's nice a little bit.

00:04:35.240 | And you don't have much time.

00:04:38.680 | [ Inaudible ]

00:04:50.160 | >> I wish I were a really gifted tennis player, but I'm not.

00:04:55.000 | And so I was attracted to the idea

00:04:58.800 | that tennis is a overcoming problems game,

00:05:03.200 | rather than a doing brilliant things game.

00:05:07.080 | Wonderful man named Simon Rameau,

00:05:10.160 | who more than anyone else invented the American space

00:05:13.840 | program as the chief executive officer

00:05:16.040 | of GRW Thompson Rameau Wooldridge.

00:05:20.000 | He conceptualized what space could be all about,

00:05:23.920 | and made clear in such a way that Congress

00:05:26.320 | and the administration really understood this is something

00:05:30.640 | we've got to do in a major way.

00:05:33.840 | It was a very talented business executive.

00:05:37.960 | Much more important to him, he was a gifted musician.

00:05:41.960 | He and three members of the Los Angeles Symphony Orchestra

00:05:44.800 | performed in public as a string quartet quite often,

00:05:49.040 | and took on some very complicated pieces of music.

00:05:53.560 | Finally, he was also a terrific athlete,

00:05:58.560 | and his favorite game was also tennis.

00:06:01.440 | And he wrote a book called Extraordinary Tennis

00:06:04.360 | for the Ordinary Tennis Player.

00:06:07.160 | That's me, ordinary tennis player.

00:06:09.280 | So I bought the book, and it was a mind-opening experience for me.

00:06:15.520 | The purpose of the game, for those of you who are expert,

00:06:19.760 | is to hit a shot that goes so close to the line

00:06:23.640 | that the other person can't quite get it back, or is hit so hard

00:06:28.000 | that the other person has put a little bit on their back foot,

00:06:31.160 | or in a series of shots has them running back and forth

00:06:34.440 | across the court trying to keep up with you,

00:06:36.400 | and gradually you get ahead of them

00:06:39.000 | and slam it through into the corner.

00:06:42.320 | That's what experts do.

00:06:43.880 | They win points.

00:06:45.600 | The rest of us, the outcome of the game

00:06:48.400 | is determined almost entirely by who loses the most.

00:06:54.120 | And I thought, that's my kind of game.

00:06:57.160 | I double fault sometimes.

00:06:58.720 | I hit it in the net sometimes.

00:07:00.280 | I hit it out of bounds sometimes with the least intention.

00:07:03.760 | I never wanted to do any of those things, but they do happen.

00:07:07.520 | And if I could cut back on those mistakes,

00:07:10.520 | sure enough, I'd have a better outcome.

00:07:14.160 | One of his recommendations was hit the serve always,

00:07:18.360 | first serve and second serve,

00:07:20.520 | that is about as good as you can do and get in 80% of the time.

00:07:26.160 | If you do that, you will double fault once or twice in a set,

00:07:30.040 | and that's all.

00:07:31.600 | And your second serve will keep the other player

00:07:34.920 | back in the court and on defense.

00:07:38.840 | It's a magical insight.

00:07:41.320 | And I tried it, and it worked for me.

00:07:43.960 | And I had a wonderful time.

00:07:45.440 | So I realized, my God, this is a brilliant understanding,

00:07:49.000 | and it applies entirely to investment management.

00:07:52.280 | If we could just eliminate our dumbhead mistakes,

00:07:57.080 | if we could just avoid making,

00:07:59.840 | "I'm terrified I'm getting out of the market at the wrong time,"

00:08:03.320 | or, "I'm excited as could be about this is a really opportunity

00:08:06.720 | at the wrong time," we would do fine.

00:08:11.400 | And so that's the origin of the book.

00:08:14.040 | -So that was the origin of the book,

00:08:15.320 | but you wrote the original essay in 1975.

00:08:20.240 | -Right.

00:08:21.360 | -And by the way, Charlie, thanks to Wikipedia,

00:08:25.040 | I can tell you it's about to turn 86.

00:08:28.040 | -Next week. -Next week.

00:08:29.960 | I won't sing "Happy Birthday" to you because...

00:08:32.040 | [ Applause ]

00:08:36.760 | But Charlie wrote "Winning the Loser's Game"

00:08:38.560 | half a century -- the original article half a century ago.

00:08:42.240 | And at the time, you had spent a considerable period

00:08:45.000 | covering analysts with Donaldson, Lufkin, Genrette.

00:08:47.400 | -Right. -And you had seen

00:08:50.040 | how well they did, the analysts,

00:08:53.440 | and that gave you an insight

00:08:55.480 | into the performance-management game

00:08:58.320 | and how it was a loser's game.

00:09:01.560 | Can you talk a little bit about that?

00:09:03.560 | -Well, one of the great privileges

00:09:04.800 | of being a stockbroker is you get to meet a lot of people.

00:09:08.400 | And if you're in the institutional business,

00:09:10.560 | you meet a lot of people at major institutions.

00:09:13.560 | And I was responsible for all of our clients

00:09:16.240 | in Northern Manhattan and Boston and Chicago.

00:09:21.000 | And Boston was a hotbed of talented people.

00:09:25.640 | And one of the things you couldn't help but realize

00:09:28.000 | is these guys are all really good at what they're doing.

00:09:31.520 | They're all smart as the dickens.

00:09:32.880 | They've got terrific good education.

00:09:34.720 | And, boy, they're fiercely competitive.

00:09:37.840 | Second thing you learned is they're all fighting

00:09:40.760 | against each other, and they don't realize

00:09:44.200 | that they're competing with each other.

00:09:47.760 | And that's pretty tough competition

00:09:50.200 | because they're all really smart,

00:09:52.120 | and they're all really well-educated,

00:09:53.800 | and they're all highly motivated,

00:09:56.080 | and they're competing with each other.

00:09:57.360 | That's not going to work out all that well for all of them.

00:10:00.680 | And sooner or later,

00:10:01.760 | people are going to have real difficulty.

00:10:03.680 | And that was, for me, a really opening-minding insight

00:10:09.000 | that just they are not trying to compete with the market.

00:10:12.680 | They're competing with each other.

00:10:15.120 | The market, you can look at it and say,

00:10:16.560 | "Ah, you know, it's just the market."

00:10:18.360 | But when you're competing with brilliantly talented people

00:10:20.840 | with great educations and all ferocious ambition

00:10:24.440 | to beat you back, this is a different game.

00:10:28.360 | - So when you wrote the 1975 piece

00:10:31.240 | for the "Financial Analyst Journal,"

00:10:33.200 | what sort of reception did it get

00:10:34.360 | among people on Wall Street?

00:10:35.840 | - Oh, they loved it.

00:10:36.680 | - They thought that they were playing a loser's game.

00:10:38.200 | - They loved it.

00:10:39.040 | I got so many friendly remarks.

00:10:41.000 | (audience laughing)

00:10:43.480 | I read your article.

00:10:44.680 | Of course, you're wrong,

00:10:45.840 | but I thought your article was beautifully written

00:10:47.880 | or it was fun or your analogy was really terrific,

00:10:51.160 | but you're wrong.

00:10:52.760 | I'm going to beat the dickens out of the market

00:10:54.840 | and this is how I'm going to make my living.

00:10:56.680 | You really are wrong.

00:10:58.120 | (audience laughing)

00:10:59.880 | So far, the evidence seems to be going the other way.

00:11:03.480 | And the game's not over yet.

00:11:05.040 | It's a long, long, long, long game.

00:11:07.600 | But the evidence keeps building

00:11:10.920 | that active investment managers, as talented as they are,

00:11:16.720 | and I have to tell you,

00:11:18.120 | we have never in the world had such a talented group

00:11:21.640 | as we have now, active management practitioners.

00:11:25.520 | Incredible.

00:11:27.160 | We have never had as much equipment for them to use.

00:11:31.080 | The computing power that they carry around in their pockets

00:11:34.040 | is way beyond anything that could have been imagined

00:11:37.480 | 30, 40, 50 years ago.

00:11:39.680 | The information flows that go to them

00:11:41.960 | from thousands and thousands of analysts

00:11:44.520 | and portfolio managers and economic analysts

00:11:47.880 | and strategists from all over the world,

00:11:50.440 | all day, every day through the internet is unbelievable.

00:11:55.160 | If you haven't played with the Bloomberg terminals

00:11:57.960 | in the last couple of years,

00:12:00.400 | find an opportunity to go play with the loop terminal.

00:12:03.640 | They are unbelievably powerful.

00:12:05.800 | Only problem is everybody's got them.

00:12:08.440 | Everybody has a Bloomberg terminal.

00:12:12.040 | Most people have two, one at home and one at work.

00:12:15.160 | A lot of people have three, one at home, one at work,

00:12:18.160 | and one in the car that drives them into work.

00:12:20.840 | The information is not competitive.

00:12:26.160 | The computing power is not competitive.

00:12:29.280 | The talent and education is not competitive.

00:12:33.400 | It is overwhelming.

00:12:35.880 | And they're still out there struggling away,

00:12:38.280 | hoping to find a way to be able to do better

00:12:41.240 | than the competition.

00:12:42.480 | The analogy that comes to my mind is,

00:12:46.080 | if you are 6'2" and you're 24,

00:12:51.080 | and you are a damn good athlete,

00:12:53.720 | and you've had some experience as a prize fighter,

00:12:57.840 | and you and I meet each other somewhere out here

00:13:00.000 | in the hallway, and it's a competition,

00:13:02.560 | I know who's gonna lose.

00:13:04.160 | It's gonna happen for sure.

00:13:08.120 | But change things a little bit.

00:13:10.880 | You've got a knife and I've got a knife.

00:13:15.280 | I might be good with a knife.

00:13:17.960 | No, no, you've got a gun.

00:13:22.880 | Well, I've got a gun.

00:13:25.080 | Yeah, but you might have a killer instinct,

00:13:29.160 | and I might flinch at the idea of killing somebody

00:13:31.720 | with a handgun.

00:13:33.000 | No, you've got a machine gun and I've got a machine gun.

00:13:37.760 | Who gives a damn about you being 6'2"?

00:13:39.920 | You've got a tank and I've got a tank.

00:13:44.280 | Nobody cares about the fact you're 22, 6'2",

00:13:48.600 | and you're a prize fighter.

00:13:50.000 | That's what's happened to the investment management world.

00:13:54.840 | The power of the tools that are available

00:13:58.200 | to the people who are doing the work

00:14:00.120 | have gone up and up and up,

00:14:01.600 | and all of them, for the individual, are marvelous.

00:14:05.760 | You should see what I've got in the way of technology.

00:14:08.520 | You should see what I've got in the way of information.

00:14:11.680 | Only problem is, everybody else has it too,

00:14:14.800 | and exactly the same time.

00:14:16.640 | So they're equalizers.

00:14:18.840 | They make all of us more and more and more equal.

00:14:21.760 | And if you think the market's gonna do 7% a year

00:14:24.960 | and you've got a 1% fee, that's a 15% of returns fee.

00:14:29.960 | That's gonna be really hard to overcome

00:14:33.240 | by outsmarting the other people,

00:14:35.400 | smart as they are, hardworking as they are,

00:14:38.000 | all over the world.

00:14:39.080 | - So just to give you some historical context,

00:14:43.400 | when Charlie's original essay came out in 1975,

00:14:49.280 | that was before Jack opened the S&P 500 fund

00:14:54.280 | to investors in 1976.

00:14:58.000 | So when you hear Charlie talk about his essay

00:15:02.440 | and the reception that it received,

00:15:04.520 | remember, this was radical in the mid-1970s.

00:15:08.240 | This was stuff that people on Wall Street

00:15:11.000 | not only didn't want to believe, simply didn't believe.

00:15:13.960 | They really did believe that they were better than average.

00:15:18.200 | So Charlie launched a firm called Greenwich Associates,

00:15:23.000 | which was a management consultancy firm.

00:15:25.280 | And in 1976, I think I've got this right,

00:15:29.120 | he had a fateful lunch with a man

00:15:32.600 | by the name of Sandy Getzman.

00:15:34.840 | And this is the point at which you realize

00:15:38.400 | that Charlie is a complete fraud

00:15:41.680 | and is in fact a brilliant active investor.

00:15:44.080 | So tell us about the lunch, Charlie.

00:15:45.880 | - Sandy Getzman was the chief executive

00:15:49.480 | of a firm called First Manhattan.

00:15:51.480 | And they had been clients the year before.

00:15:56.240 | And I've written, as we did for each client,

00:16:01.640 | an analysis of their strengths and weaknesses

00:16:04.880 | with a series of three, four, five specific recommendations

00:16:08.360 | as to what they should do differently.

00:16:11.000 | They had some terrific research

00:16:13.880 | for creative investment ideas.

00:16:17.000 | They did not have institutional or industry coverage.

00:16:21.560 | They didn't do it that way.

00:16:24.080 | They were looking for individual stocks

00:16:25.900 | rather than wanting to be responsible

00:16:27.280 | for all the stocks in the chemical industry

00:16:29.360 | or all the stocks in the auto industry

00:16:31.440 | or any other industry.

00:16:33.180 | And I've explained to them quite carefully

00:16:37.320 | that they were working in a way

00:16:38.880 | that was counterproductive because brilliance

00:16:42.520 | in creative ideas, without having the full understanding

00:16:46.160 | and context of the total industry,

00:16:48.800 | they were going to miss the privilege

00:16:50.920 | of being listened to carefully

00:16:53.560 | by the analysts at the institutions.

00:16:56.320 | And all the institutions had analysts

00:16:58.360 | who covered their industry and then found the best ideas

00:17:01.360 | and fed them up to the portfolio managers.

00:17:03.680 | And as a result, they were never gonna have access

00:17:06.120 | to the portfolio managers.

00:17:08.160 | And they were going to never be able

00:17:11.280 | to build a significant institutional business.

00:17:13.880 | This is some way to treat a client.

00:17:17.120 | You're making a terrible mistake

00:17:18.800 | and you're really in trouble.

00:17:21.060 | I called the next year to see

00:17:25.720 | if I could make an appointment to see Sandy.

00:17:28.600 | And his assistant said,

00:17:30.640 | "Well, Mr. Gottesman would like very much to see you,

00:17:33.480 | "but he would like very much that you would come for lunch."

00:17:36.580 | And I thought, this is gonna be terrific

00:17:41.480 | 'cause we just told him he's doing everything wrong

00:17:44.840 | and he has decided to upgrade my stature

00:17:47.440 | and invite me to come in for lunch.

00:17:49.520 | This is going to be a guaranteed win.

00:17:52.200 | So I went in and with all the politeness I could set us,

00:17:55.800 | Sandy just delighted with this conversation,

00:17:58.400 | looking forward to it very much.

00:17:59.580 | He said, "Before we get in the conversation, Charlie,

00:18:01.700 | "let me just tell you,

00:18:02.780 | "we're never gonna take your service again.

00:18:04.940 | "You told us that we couldn't succeed with what we're doing

00:18:08.940 | "and we understand that you're right.

00:18:11.280 | "We can't succeed with most institutional investors,

00:18:14.180 | "but that's only part of our business.

00:18:15.640 | "We do a lot of investment management

00:18:18.020 | "and we do individual stock brokerage for individual people.

00:18:23.020 | "We don't need institutional business.

00:18:24.860 | "That's a small sideline."

00:18:26.780 | Look, ooh-wee, why would he invite me to come in

00:18:31.780 | if that's what he has as a message?

00:18:34.420 | Most people would send a short message,

00:18:38.100 | "You're wrong for us

00:18:39.960 | "and we don't want anything to do with you,"

00:18:41.700 | or a telephone call or some other.

00:18:45.500 | But here he's invited me in for lunch.

00:18:47.420 | Well, Sandy, we've got this really interesting service

00:18:51.980 | for investment management.

00:18:53.860 | Would you like to know how you're doing

00:18:56.900 | compared to other investment managers?

00:18:59.460 | No, Charlie, we don't really care about that

00:19:01.620 | because most people are going after the large pension funds.

00:19:04.220 | We're going after the small pension funds

00:19:06.700 | run by entrepreneurs.

00:19:07.820 | So we don't really care about that business.

00:19:10.100 | Ooh-wee, this is gonna be a difficult situation.

00:19:14.820 | I said, "Okay."

00:19:16.780 | Sandy said, "Well, let's go up for lunch."

00:19:18.340 | Then as we got in the elevator,

00:19:19.580 | I realized I've got to come up with something

00:19:22.100 | to talk about over lunch

00:19:23.340 | because he has just shot down the two possibilities

00:19:26.580 | I had on the way in.

00:19:28.620 | As we sat down, I said,

00:19:30.000 | "Sandy, you're one of the best investors anybody knows.

00:19:35.460 | "Would you talk about your favorite all-time investment?"

00:19:39.340 | Said, "Sure."

00:19:43.220 | Said, "First, what was it?"

00:19:47.580 | Still is.

00:19:49.020 | "What is it?"

00:19:51.020 | Berkshire.

00:19:51.860 | I'm sorry, Berkshire Hathaway.

00:19:56.540 | Oh, I'd heard about Berkshire Hathaway

00:20:00.780 | and I'd heard about Warren Buffett

00:20:02.580 | and I knew something about the Buffett partnership,

00:20:05.460 | but I didn't really know very much about it at all.

00:20:07.500 | So I said, "Sandy, can you do me a big favor?

00:20:11.780 | "Would you talk in depth about Berkshire Hathaway?

00:20:15.740 | "Start by telling me how long you're going to own it."

00:20:18.660 | "Forever."

00:20:19.780 | I had had a conversation with my partners

00:20:25.740 | that we were running a fragile business.

00:20:30.260 | We were a small firm.

00:20:32.300 | We couldn't possibly borrow any money from a bank.

00:20:35.180 | So if we had any trouble financially,

00:20:38.460 | we were in serious jeopardy, probably wiped out.

00:20:43.780 | And that we ought to put aside a reserve,

00:20:46.820 | which we could do if we would defer our annual bonus

00:20:51.020 | by six months.

00:20:52.220 | And the other fellows in the partnership said,

00:20:56.820 | "You know, I really don't want to do that

00:20:59.300 | "'cause I'm almost hand to mouth,

00:21:01.060 | "but yeah, I think that's a really good idea.

00:21:04.180 | "We'll put it aside."

00:21:05.300 | So we had $100,000 that we had decided

00:21:09.100 | would be enough of a safety cushion

00:21:11.140 | in case we got in trouble.

00:21:13.460 | And my partners had said,

00:21:14.700 | "Charlie, you know something about investing,

00:21:16.580 | "so why don't we look to you to find

00:21:18.580 | "how we should invest this?"

00:21:20.540 | I said, "Fine, I'll gladly do it."

00:21:22.900 | So it was that background,

00:21:24.420 | Sandy started talking about Berkshire Hathaway

00:21:27.900 | and laid out a concept of why

00:21:30.220 | that was a great long-term investment

00:21:32.620 | that was compelling in my mind.

00:21:35.660 | So I went back to my partners and said,

00:21:37.260 | "I think we should put everything into Berkshire Hathaway."

00:21:40.700 | What the hell is Berkshire Hathaway?

00:21:42.060 | I'd never heard of it.

00:21:43.460 | You will hear about it.

00:21:44.900 | It's a really, really well-run investment organization

00:21:48.340 | and it's diversified

00:21:49.940 | and it's in fairly conservative stocks most of the time

00:21:53.860 | and it's got some really clever ideas

00:21:55.980 | about how to do better.

00:21:57.220 | Well, that was a long time ago

00:22:01.180 | and the stock was selling a little over $1,000 a share

00:22:06.180 | in the A shares.

00:22:10.260 | There's nothing like being lucky.

00:22:12.500 | (audience laughing)

00:22:14.620 | - And today, Berkshire, what?

00:22:16.300 | Around half a million a share?

00:22:18.620 | - Yeah.

00:22:19.740 | - And do you still own it?

00:22:23.060 | - I'm following Sandy's advice.

00:22:25.220 | He said, "Forever."

00:22:26.820 | And I figured, why not?

00:22:28.740 | It's forever with me too

00:22:31.220 | and now, of course, it'd be stupid to sell it

00:22:34.020 | and pay the capital gains.

00:22:35.420 | You'd never recover it at my age

00:22:37.580 | before you're gone and buried.

00:22:38.900 | So I'm looking at it sort of like a flower bond.

00:22:41.220 | Those of you who are in your early, mid-80s

00:22:43.580 | will understand flower bonds

00:22:45.860 | were the bonds that you could use

00:22:48.060 | to pay off your estate taxes.

00:22:50.180 | They were bargained and the price is up

00:22:54.860 | and stuff like that.

00:22:55.860 | - So I wanna move on to another part

00:22:59.220 | of Charlie's story career.

00:23:01.740 | Charlie spent 17 years

00:23:05.260 | heading up the investment committee for Yale University.

00:23:08.180 | - I was on the investment committee for 17 years

00:23:10.660 | and I was chair for 11.

00:23:13.100 | - Which means that basically, Charlie,

00:23:15.340 | was David Swenson's boss.

00:23:17.340 | - No, no, I was sitting in the front row seat

00:23:20.180 | watching the best talent

00:23:21.980 | that any of us have ever, ever known of.

00:23:26.620 | - So tell us about David.

00:23:28.620 | - He's a beautiful man.

00:23:29.660 | He was good-looking.

00:23:32.500 | He was a good athlete.

00:23:35.860 | He was as nice a guy as you would ever want to meet.

00:23:38.780 | He was the most disciplined investor

00:23:43.420 | there has ever been.

00:23:44.780 | Everything about his activities

00:23:48.740 | were worked out and done deliberately.

00:23:51.380 | His greatest personal strength as an investor

00:23:56.420 | was his fascination with risk management.

00:24:00.140 | Most of us think risk will take care of itself.

00:24:02.540 | Not David, he really wanted to manage the risk

00:24:05.220 | very, very carefully.

00:24:06.340 | Before he got to Yale,

00:24:09.660 | he had invented the first major derivative transaction.

00:24:14.660 | $100 million swap between floating rate and fixed rate

00:24:19.620 | interest between IBM and the World Bank.

00:24:23.740 | Nobody had ever conceived of doing anything quite like

00:24:27.220 | that kind of a transaction.

00:24:29.460 | He conceived of it and then figured out

00:24:31.660 | who would be the right clients to do the transaction with.

00:24:35.380 | And then of course, the fee was pretty attractive

00:24:37.380 | on both sides.

00:24:38.700 | Then at Salomon Brothers,

00:24:40.020 | which is where he was then employed,

00:24:41.860 | it was a spellbinding experience

00:24:44.860 | to see somebody do something creative.

00:24:46.820 | David invented the endowment model concept of investing,

00:24:52.820 | which is probably the most powerful development

00:24:57.660 | of thinking in investment management.

00:25:00.780 | That anybody has ever done except possibly indexing,

00:25:05.780 | which I'm devoted to, so be careful, there's a bias there.

00:25:10.540 | When he got to Yale, New Haven, I have to tell you,

00:25:15.620 | New Haven is somewhere between New York and Boston.

00:25:18.620 | Boston's a hotbed of talent.

00:25:20.140 | New York's a hotbed of talent.

00:25:21.780 | Nobody needs to have some place to live and work

00:25:24.980 | that's halfway between the two cities.

00:25:27.300 | And that's what New Haven was.

00:25:28.620 | They had no investment community

00:25:31.020 | of any kind of distinction or capability.

00:25:33.900 | There was no way that somebody who was really good

00:25:36.540 | was gonna leave Wall Street or Boston

00:25:38.620 | in order to get a job in New Haven.

00:25:41.140 | And it was sort of the desert of investment management.

00:25:46.140 | He was sole responsible for the endowment.

00:25:56.660 | And his starting place was to create

00:25:59.060 | the first really serious-minded investment committee

00:26:03.380 | that Yale had ever had, which is an interesting challenge.

00:26:07.820 | He put together one after another after another

00:26:12.260 | first-rate insights into how you could do one thing

00:26:17.220 | after another after another after another.

00:26:19.380 | If you really wanted to have a talented investment team,

00:26:22.540 | fine, start with someone who is a gifted teacher,

00:26:27.260 | David Swensen, ask him to create a seminar

00:26:32.100 | that the smartest students at Yale will all want to take.

00:26:36.300 | And Yale has not a very large undergraduate college,

00:26:40.180 | but a little over a thousand students per year.

00:26:44.860 | But they are really the cat's meow

00:26:47.100 | in terms of talent and creativity and ability to learn.

00:26:53.100 | Have a seminar that all of those students

00:26:55.740 | are gonna want to apply for.

00:26:57.660 | Carefully select the 25 students

00:27:00.020 | you will allow into the seminar.

00:27:01.740 | Within the seminar, make it spellbinding experience

00:27:06.460 | of learning and development.

00:27:09.140 | Choose the one or two or three students each year

00:27:13.700 | who are really outstanding

00:27:15.260 | and offer them a summer internship.

00:27:20.380 | If someone is in the summer,

00:27:22.140 | proves that they are really gifted at doing the work,

00:27:25.100 | offer them a two or three year extended position.

00:27:30.100 | And if they are really, really good

00:27:32.780 | in that two or three years,

00:27:34.260 | offer them a chance to stay permanent on the team.

00:27:37.420 | Oh, by the way, make it fun.

00:27:40.100 | Lots of activities in sports

00:27:42.260 | because Yale's got all kinds of sports equipment

00:27:44.340 | and facilities and David's a very good athlete.

00:27:47.260 | Have really interesting competitions,

00:27:49.940 | with other teams.

00:27:51.380 | Be sure that you have group activities

00:27:56.500 | that are very close-knit, bring people together

00:27:59.660 | so that they realize this is like a family.

00:28:01.820 | Be sure that they have a chance to learn an enormous amount

00:28:07.260 | because they're included in all the most important meetings

00:28:11.260 | and they participate in the decision after the meetings.

00:28:15.060 | Pretty soon you can attract,

00:28:17.660 | particularly in a scuttlebutt network,

00:28:19.980 | passes the word, students pass it on to other students,

00:28:22.860 | pass it on to other students.

00:28:23.900 | So it didn't take more than two or three years

00:28:25.940 | before everybody at Yale knew

00:28:27.940 | the best thing you could possibly do

00:28:29.540 | is get into David Swenson's seminar.

00:28:32.420 | So it attracted quite a large group

00:28:34.220 | and then he carefully selected the best of those students

00:28:37.140 | to be members of his seminar and then took it from there.

00:28:40.820 | - So in terms of the investment committee overseeing--

00:28:43.900 | - Same thing.

00:28:44.740 | - David Swenson, I mean, was it like the cop

00:28:47.860 | with the presidential motorcade,

00:28:49.260 | you just waved it through

00:28:50.740 | or did you ever second guess David's decisions?

00:28:53.860 | - Well, first David did the selection

00:28:57.620 | of investment committee.

00:28:59.660 | He did not just take whatever was offered.

00:29:02.980 | He was very careful to find a cluster of people,

00:29:07.220 | really small number of people,

00:29:08.500 | but a cluster of people with different backgrounds

00:29:11.100 | who would really be committed to helping the Yale endowment

00:29:15.140 | and who would be sources of insight and information

00:29:18.420 | and perspective and judgment

00:29:20.260 | that he might be able to incorporate.

00:29:22.340 | So it was his investment committee without a doubt.

00:29:25.620 | And then he treated them as though they were gods

00:29:28.700 | and they gradually thought themselves

00:29:30.660 | as being pretty close to gods

00:29:32.860 | with David as their favorite employee.

00:29:38.180 | The intensity back and forth was quite terrific.

00:29:41.300 | Lots of open discussion.

00:29:42.820 | Only once in 17 years did I see a recommendation

00:29:47.780 | from David's team come up

00:29:50.180 | and meet a series of skeptical questions

00:29:52.980 | from the investment committee,

00:29:54.700 | at which point David said,

00:29:55.980 | I think what we ought to do is take this back

00:29:57.580 | for further consideration.

00:30:00.020 | Of course, it never came up again.

00:30:01.720 | Once in 17 years, and if you look at the Yale endowment,

00:30:06.620 | it had over a hundred different investment managers,

00:30:09.700 | most of whom none of us would recognize by name.

00:30:12.740 | There was no well-known investment management firm

00:30:17.820 | that ever made the cut

00:30:19.940 | in David Swenson's array of investment management

00:30:23.100 | because he was reaching for people who were so talented,

00:30:27.100 | but so new that nobody knew about them

00:30:30.480 | or would feel comfortable hiring them.

00:30:32.540 | He was the first client for a very large number,

00:30:35.740 | quite successful later on investments.

00:30:38.460 | He was very good at it and that helped,

00:30:40.420 | but he caught people at just the right time.

00:30:43.820 | And then the interesting thing to me was,

00:30:45.700 | even though I would not have recognized four out of five

00:30:50.540 | of those managers,

00:30:51.620 | and I've got a reasonably wide exposure

00:30:55.700 | in the investment management world,

00:30:56.980 | I just didn't know them at all.

00:30:58.620 | The average duration of the relationships was 17 years.

00:31:06.100 | Imagine that, that the average duration

00:31:10.420 | of the investment manager relationship turnover

00:31:14.020 | was what, 6%, it's just phenomenal.

00:31:18.940 | - So when I was hurriedly sketching notes

00:31:22.140 | for today's conversation with Charlie,

00:31:24.300 | I knew that he had been a friend of John Neff

00:31:28.780 | and I was gonna ask him about that.

00:31:30.940 | For those of you who've been long-term investors

00:31:32.700 | in the Vanguard Windsor Fund,

00:31:33.780 | you'll of course know John's name.

00:31:35.500 | I was also gonna ask Charlie about Burt Malkiel.

00:31:38.700 | Charlie's also good friends with Burt Malkiel.

00:31:42.300 | They go on vacation together.

00:31:43.420 | They did a book together,

00:31:44.740 | probably the second most famous book that Charlie's written,

00:31:47.780 | "The Elements of Investing."

00:31:49.340 | And of course, Burt and Charlie sat on the board of directors

00:31:52.900 | of Vanguard together for a while,

00:31:54.940 | but I'm gonna leave that aside

00:31:57.020 | because we're gonna run out of time

00:31:58.660 | and I have one last topic that I wanna talk about,

00:32:02.900 | one last series of stories, which of course is Jack Bogle.

00:32:07.220 | So Charlie, you're a management consultant.

00:32:10.620 | You look at Jack's tenure

00:32:14.900 | as the Chairman Chief Executive of Vanguard.

00:32:18.700 | How would you appraise him as an executive?

00:32:21.540 | - Terrible.

00:32:22.940 | (audience laughing)

00:32:25.940 | - Would you like to elaborate?

00:32:28.460 | (audience laughing)

00:32:31.460 | - Well, if you had asked as a leader,

00:32:36.460 | then I might not have said terrible.

00:32:39.260 | I would have said compelling, exhilarating,

00:32:44.260 | inspiring, and capable of causing people

00:32:49.260 | to reconsider what they wanted to do with their lives

00:32:52.540 | and why they wanted to do it.

00:32:54.820 | You heard earlier observations about the service ethic

00:32:59.140 | that's deeply rooted in the people who work at Vanguard.

00:33:02.060 | Candidly, serving as a consultant

00:33:07.300 | and then as a director of Vanguard,

00:33:09.900 | I was backstage all the time

00:33:11.740 | and I saw all kinds of opportunities to observe.

00:33:16.740 | They were a bunch and are today

00:33:19.180 | a bunch of Boy Scouts and Girl Scouts.

00:33:22.300 | They are decently nice people to each other,

00:33:28.340 | ferocious in their drive to reduce cost.

00:33:31.900 | Who got that going?

00:33:35.620 | That was Jack.

00:33:37.180 | He was ferocious at reducing cost.

00:33:40.420 | And it makes a terrific difference

00:33:43.060 | when a large group of people can have a purpose

00:33:46.780 | as specific as reducing cost.

00:33:49.460 | And they work away at it all the time, all the time.

00:33:54.220 | And with great effect.

00:33:57.500 | Second thing is Jack was determined

00:34:00.300 | to have real value delivered.

00:34:03.980 | And everybody who's at Vanguard has to drink the Kool-Aid.

00:34:08.700 | If you don't understand,

00:34:09.980 | we're here to serve with higher and higher value

00:34:12.700 | of the owner, shareholders of Vanguard.

00:34:15.420 | And the owner part is something they care,

00:34:17.500 | they're serious about.

00:34:18.620 | And they mean it because investors in the Vanguard funds

00:34:22.100 | are the owners because the funds own Vanguard.

00:34:26.100 | And a little bit of a skittishness on taking risk

00:34:31.100 | because they, as a group,

00:34:37.100 | know that many of us have got this terrible temptation

00:34:41.580 | after things have done well to get excited

00:34:44.460 | rather than when things look pretty grim but might do well.

00:34:48.780 | So if you think in terms of leader or founder or inspiration,

00:34:55.740 | then I think you'd have to rank him exceptionally high.

00:34:59.340 | The day after Jack died,

00:35:03.020 | this is the man that was afraid

00:35:04.380 | of people not paying attention.

00:35:07.100 | The New York Stock Exchange had 50 photographs

00:35:11.380 | of Jack's displayed all over the floor

00:35:13.980 | of the New York Stock Exchange

00:35:15.980 | because they had such a high regard for what he had done.

00:35:19.140 | And what he had done was leadership.

00:35:21.460 | But management, he was terrible.

00:35:25.500 | (audience laughing)

00:35:26.340 | He really never, ever understood computers

00:35:30.900 | as a cost-saving device.

00:35:32.580 | He looked at the cost of a computer, the price tag,

00:35:34.900 | and said, "That's just too damn much.

00:35:36.340 | "I'm not gonna pay that."

00:35:37.580 | (audience laughing)

00:35:39.380 | Instead of realizing if he would do that,

00:35:41.420 | he would be able to bring the cost levels down.

00:35:43.780 | He really got way behind the curve on computerization

00:35:49.500 | and all kinds of technology.

00:35:51.660 | He made dreadful mistakes.

00:35:54.860 | He had the chance of a lifetime

00:35:57.260 | to seize and make a real success out of ETFs.

00:36:01.580 | "I'm not gonna do that.

00:36:03.260 | "ETFs are speculative."

00:36:05.180 | "Jack, you don't understand.

00:36:06.620 | "ETFs are a cheap way for people to own stocks."

00:36:09.740 | "No, no, no, they're speculative

00:36:11.620 | "'cause you can trade them anytime you want to."

00:36:14.300 | "Yes, Jack, most people don't trade them.

00:36:16.420 | "The hedge funds trade them all over the place.

00:36:19.020 | "That's where the turnover comes from.

00:36:20.340 | "You don't have to worry about individuals.

00:36:22.140 | "They would buy and sell them when they need to,

00:36:23.980 | "but they will not go crazy."

00:36:25.180 | "I'm not gonna buy 'em.

00:36:26.360 | "We're not gonna have anything to do with ETFs.

00:36:29.980 | "They're speculative."

00:36:31.420 | And that lasted for a decade.

00:36:33.460 | Dead wrong.

00:36:36.940 | His strategy decisions in several cases

00:36:42.580 | were also dead wrong.

00:36:44.860 | He decided, for reasons that were totally inappropriate,

00:36:50.700 | that he was gonna do something.

00:36:52.300 | And he badgered the board of directors

00:36:56.660 | to give him permission to do it.

00:36:58.060 | And finally, they said, "Jack, for Christ's sake,

00:37:00.100 | "it's never gonna amount to anything.

00:37:01.560 | "And you're all determined.

00:37:02.840 | "Why don't you go ahead and try it?

00:37:04.080 | "And when you fail and come back,

00:37:06.000 | "we're not gonna hurt your feelings.

00:37:07.680 | "And we're certainly not gonna penalize you,

00:37:09.340 | "but you're really, really wrong.

00:37:12.280 | "I'm not gonna do it."

00:37:13.800 | Okay.

00:37:15.300 | So he went out and organized a new investment service idea.

00:37:21.220 | And he went to Wall Street and said,

00:37:23.200 | "I've got a great idea.

00:37:24.240 | "You guys are gonna love it.

00:37:26.300 | "You're really, really gonna love it.

00:37:27.860 | "I'm gonna raise a very substantial amount of money,

00:37:31.400 | "and we're gonna do something

00:37:32.860 | "that's innovative and creative,

00:37:34.500 | "and you're gonna be able to be a participant in it."

00:37:36.800 | Oh, that sounds interesting, Jack.

00:37:38.020 | What is it?

00:37:38.860 | Index funds.

00:37:39.980 | Jack, index funds?

00:37:43.400 | There's some experimental work being done

00:37:46.460 | at the Wells Fargo Bank with index funds,

00:37:49.280 | but that's just not an attractive proposition.

00:37:52.080 | People wanna beat the market.

00:37:53.660 | They don't wanna buy the market.

00:37:55.060 | They wanna beat the market.

00:37:57.060 | Besides, you're gonna have a front-end load

00:37:59.900 | on this index fund.

00:38:02.240 | So they're gonna drop back 8% at the very beginning,

00:38:06.440 | and the way you're matching it,

00:38:08.400 | they'll never, ever catch up

00:38:09.700 | because they're gonna stay, at best,

00:38:11.220 | at the market rate of return at 8% behind,

00:38:14.300 | 8% behind, 8% behind.

00:38:16.260 | Jack, don't you get it?

00:38:17.420 | This is a guaranteed failure.

00:38:20.000 | I'm gonna do it.

00:38:21.860 | And gradually, his aspirations for volume of sales

00:38:26.860 | went from a substantial $250 million offering

00:38:32.600 | to $100 million offering

00:38:36.080 | to $50 million offering

00:38:38.920 | to $15 million offering,

00:38:42.320 | and finally, he squeezed it out into the marketplace.

00:38:48.080 | And it went nowhere, 'cause everybody could see.

00:38:51.760 | Buy this, you lose on the date of purchase,

00:38:55.820 | and you will never recover.

00:38:57.480 | And then he thought, you know, if we drop the load,

00:39:02.400 | maybe that would help.

00:39:05.660 | It didn't make any difference.

00:39:06.760 | By that time, everybody knew not to touch it.

00:39:09.800 | Okay, I'm losing money operating this fund,

00:39:15.840 | and the fund itself is losing money,

00:39:18.080 | and we've got a front-end load.

00:39:19.560 | We've gotten rid of the front-end load.

00:39:21.560 | I need volume.

00:39:23.480 | So he merged it with a closed-end fund

00:39:27.180 | that was also being managed, or distributed, by Wellington,

00:39:31.560 | and that gave him enough to break even.

00:39:35.680 | And after nearly a decade,

00:39:40.920 | indexing started to catch hold.

00:39:42.760 | It catch hold and went on and on,

00:39:45.600 | and I'm all for being ahead of your times,

00:39:48.960 | but being that far ahead of your times, I'm not so sure.

00:39:52.400 | - So we only have a few minutes left.

00:39:55.280 | If there are any questions, Christine's,

00:39:57.600 | oh, Christine already has them?

00:39:59.480 | - I have a couple, but I'll take one.

00:40:01.280 | - All right, we'll try and rattle through these

00:40:03.480 | as quickly as possible.

00:40:04.640 | You need to be a little less loquacious, Charlie.

00:40:07.480 | (audience laughing)

00:40:08.840 | - Okay.

00:40:09.680 | - All right.

00:40:15.040 | All right, coming back to David Swenson.

00:40:18.000 | Should investors make room for alternative assets

00:40:21.240 | in their portfolio?

00:40:22.360 | - No.

00:40:23.200 | (audience laughing)

00:40:26.280 | - Would you like to elaborate?

00:40:28.440 | - Well, you told me not to.

00:40:29.640 | (audience laughing)

00:40:32.640 | Let's be realistic about markets.

00:40:40.080 | If I were running an alternative investment fund,

00:40:45.000 | I know where I want to go,

00:40:47.880 | where big money makes relatively quick decisions

00:40:52.840 | and sticks with them for the long, long time.

00:40:55.520 | That has nothing to do with individual investors.

00:40:59.480 | I wouldn't dream of talking to individual investors.

00:41:04.080 | I'd concentrate entirely on endowment funds,

00:41:08.920 | and you would never be able to shake me loose from that.

00:41:13.920 | However, if I were running a,

00:41:17.960 | I've got to make money somehow enterprise,

00:41:22.480 | and I couldn't compete successfully with institutions

00:41:26.240 | for institutional money,

00:41:27.640 | I might very well find a way to create an access

00:41:33.080 | for individual investors.

00:41:37.880 | Nobody's mother would ever say,

00:41:39.840 | "Go ahead, go ahead and deal with that guy."

00:41:43.320 | And anybody's father would say,

00:41:46.240 | "Don't touch the son of a bitch."

00:41:49.800 | And I think they'd be right.

00:41:51.200 | It's a fair market out there,

00:41:55.000 | but that doesn't mean that all the players are fair to you,

00:41:58.680 | and if you don't belong there,

00:42:00.240 | you're going to be treated unfairly.

00:42:02.840 | I don't belong there, and I think most individual people

00:42:06.000 | don't come near belonging there.

00:42:08.240 | - All right, second question for you.

00:42:11.240 | Are there any market segments

00:42:12.920 | where investors use actively managed funds?

00:42:15.480 | - No.

00:42:21.800 | - Not emerging markets?

00:42:27.120 | - Well, no, certainly not.

00:42:29.120 | Let me just be fair.

00:42:34.960 | If you are fluent in Chinese and are resident in China

00:42:39.960 | so that you can access a lot of the information

00:42:46.840 | that might be available,

00:42:48.360 | because the Chinese market is still overwhelmingly dominated

00:42:53.600 | by individual investors,

00:42:55.280 | you could, if you were a logical, hardworking person,

00:43:01.400 | gather information that would give you

00:43:03.040 | a comparative advantage,

00:43:04.400 | and then if you were very disciplined

00:43:06.160 | in your investing activities,

00:43:08.560 | you could probably do better than the Chinese market.

00:43:12.760 | I have two grandsons who are half Chinese, half American.

00:43:21.680 | They're fluent in Chinese.

00:43:23.480 | They might be candidates for this.

00:43:27.120 | These two kids are really super bright.

00:43:29.200 | 16, and they could do it.

00:43:34.680 | But if they came to me and said,

00:43:36.600 | "Grandpa, that's what we think,"

00:43:38.840 | and they call me Charlie,

00:43:39.840 | but, "This is what we think we do.

00:43:42.240 | "We are gonna go to China and make our life there

00:43:46.080 | "investing in Chinese stocks,"

00:43:48.160 | I would plead with them to do something else

00:43:50.520 | because they've got quite a lot of talent,

00:43:55.280 | and they could do something

00:43:56.360 | that's a hell of a lot more interesting

00:43:58.680 | than buying and selling stocks.

00:44:00.400 | - All right, so final question.

00:44:03.360 | This one is for me.

00:44:04.680 | What's your favorite Jack Bogle story?

00:44:06.800 | You can give us two.

00:44:11.720 | You have three minutes.

00:44:13.800 | (audience laughing)

00:44:15.960 | No pressure.

00:44:16.800 | - Jonathan, you should have given me a pre-warning

00:44:27.040 | that that's what you were gonna ask because--

00:44:28.600 | - All right, so as a warm-up for Charlie,

00:44:30.440 | while the cogs turn, in the early 1990s,

00:44:34.680 | I was covering mutual funds at the Journal.

00:44:37.920 | That was my first job at the Journal,

00:44:39.640 | and my counterpart at Barron's was Leslie E.

00:44:44.640 | And Leslie wrote a piece for Barron's

00:44:48.560 | where she referred to Jack

00:44:50.840 | as the ever-self-righteous Jack Bogle.

00:44:54.320 | The day the piece appears, her phone rings,

00:44:58.480 | she picks it up, and on the other end

00:45:01.240 | is this voice that says,

00:45:02.600 | this is the ever-self-righteous Jack Bogle.

00:45:05.000 | (audience laughing)

00:45:08.520 | He loved it.

00:45:09.880 | - That was Jack.

00:45:12.120 | It was an article that had Jack and Warren Buffett

00:45:16.720 | analyzed jointly, and Jack was pissed off

00:45:19.760 | because Warren was mentioned eight times

00:45:21.680 | and he was only mentioned twice.

00:45:23.320 | (audience laughing)

00:45:26.760 | - It's one of the great mysteries of all time,

00:45:30.880 | which is you go to the campus,

00:45:32.640 | you will see a statue of Jack Bogle,

00:45:36.200 | a substantial statue, more than life-size.

00:45:39.480 | And you may be the person who,

00:45:43.400 | for the first time in world history,

00:45:45.720 | figures out who ordered that damn statue

00:45:48.400 | to be put up in that complex.

00:45:54.480 | I know the directors were not part of that decision.

00:45:57.160 | I know that the management wasn't part of that decision.

00:46:00.720 | And the only person that I can imagine

00:46:03.040 | is a certain curmudgeon that wanted not to be forgotten

00:46:08.040 | and wanted to be, wanted desperately, desperately

00:46:12.800 | to be a hero to ordinary investors.

00:46:16.680 | And so it came to pass.

00:46:20.520 | Or, as one of Jack's assistants from many years ago,

00:46:25.040 | Kevin Laughlin, used to say,

00:46:27.040 | there are only two groups of people in the world

00:46:29.640 | who walk to the office every day

00:46:31.480 | and pass a statue of their boss,

00:46:34.800 | the people of North Korea and me.

00:46:37.400 | (audience laughing)

00:46:40.400 | Thank you, Charlie, for your time.

00:46:43.120 | - Thank you, Charlie. - It's been a great conversation.

00:46:46.120 | you

00:46:48.180 | [BLANK_AUDIO]

Bogleheads® Conference 2023 - Jonathan Clements with Charley Ellis

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