Bogle’s “Enough: True Measures of Money, Business, and Life” Impresses

When John Bogle founded Vanguard and launched the first-ever index fund in 1975, many in the financial services industry thought there was no way he’d succeed. Forty impressive years later, however, his critics have been silenced and his role as the conscience of the investing world is assured. Bogle has proven that you can, in fact, succeed by putting the customer first, by not charging outsized fees, and by aligning the interests of both fund providers and fund investors.

Bogle is a prolific author, and his book Enough is a great starting point for anyone interested in learning more about the man himself, his path to starting Vanguard, and his views on everything from Ben Franklin to modern-day financial innovation. Published in the fall of 2008, it reads now like an eerily prescient indictment of all the bad behavior that led to the financial crisis, and it’s just as relevant today as when it came out.

A plea to stop chasing “things” and money in order to measure what a life’s worth, Bogle hopes for a return to more humble, honest times when it was enough to work hard, treat people fairly, and love your community and family. He decries the “me-first” culture of Wall Street, where businesses exploit their customers by charging them too much for too little and where financial “innovation” often only serves to further enrich those at the top rather than actually improving the status quo. In his words, “On balance, the financial system subtracts value from our society.”

Bogle is particularly concerned about the shift from investing to speculating that’s developed in the markets throughout his long career. This change, combined with the fees charged for many actively managed mutual funds, means that it’s a near certainty that investors are not getting their money’s worth. When you compare the low-cost index fund, which guarantees the market’s return, to the vast majority of active funds that charge more and then lose to the market, his point is tough to argue with.

Granted, his praise for the index fund could be seen as self-serving, and he’s the first to acknowledge that perceived conflict. The truth remains, though, that it does deliver more in returns, on a net basis, over time to investors than most other options. Everyone from Warren Buffett to Peter Lynch is a fan.

Bogle advocates for simplicity, whether he’s describing a meaningful life or talking about the best solution for investors. I think we’d all be wiser and better off if we listened to him.

(Originally published here: http://msbusiness.com/2015/03/louann-lofton-the-father-of-the-index-fund-on-the-good-life/)

In order to succeed, fail well, argues “The Up Side of Down”

Spending 320 pages reading about failure may not seem like the most compelling idea, but hear me out. Economics and business journalist Megan McArdle’s first book, The Up Side of Down: Why Failing Well Is the Key to Success, makes a strong and thought-provoking case for the importance of failure.

McArdle walks us through failures of all kinds: her own personal failures, numerous stories of business and entrepreneurial failures and even society’s failures. She convincingly demonstrates how vital it is to try things you might fail at — and if you do fail, what lessons to take away from those experiences. Indeed, her argument as it pertains to business is that this characteristic is at the very heart of what drives American innovation.

Failure obviously makes us uncomfortable. Even the thought of failing at something can give the most confident person pause. However, being willing to take risks and fail — and recognize those failures — is critical to your own life and the success of your business.

McArdle spends one chapter, for instance, on the long and protracted downfall of General Motors, and the ways that GM’s management was unwilling to react to many cues inside the business that all was not well, until it was too late. They fell prey to normalcy bias, or “acting as if things are fine when they quite obviously are not.” Not being able to deal with the failures as they happened meant that later, things for GM were much, much worse.

One of the things I liked best about this book, and McArdle’s work in general, is her ability to boil controversial topics down to their economic effects. She’s got a knack for making you question your own assumptions.

For instance, she argues, quite convincingly, that the relative permissiveness of U.S. bankruptcy laws help support small business development in a way that, net-net, is a positive thing for society. It allows entrepreneurs the ability to take risks, start businesses, fail, and then not be bound to those failures for the rest of their lives. They can then try again, starting new businesses.

This cycle contributes to what makes America’s economy so vibrant, supporting the growth of small businesses. Sure, some folks may abuse our lax bankruptcy laws, but overall the effect is a win. Were we to tighten up, she argues, we’d de-incentivize small business growth. Many European countries, for instance, have much tighter bankruptcy standards, which results in far fewer small businesses there as “innovators decide it’s not worth the risk.”

It’s that kind of contrarian thinking that makes this book a great read.

(Originally published here: http://msbusiness.com/blog/2014/07/25/book-biz-looking-bright-side-failure/)

Books: On Investing the Templeton Way

One word sprung to mind repeatedly as I read Investing the Templeton Way: courage. Simply put, courage defined the life and times of the renowned global value investor Sir John Templeton, and reading about how he approached investing left me both impressed and inspired.

Born in 1912 in the small town of Winchester, Tennessee, Templeton would go on to pioneer the idea of global investing. He was exceptional from the word go, managing to attend (and largely pay for on his own) college at Yale. He also became a Rhodes scholar, and traveled extensively in Europe, the Middle East, and Asia.

This insatiable curiosity and drive would lead him to work hard throughout his long career to uncover the best investment bargains worldwide. Well before U.S. investors were willing to look overseas for undervalued companies and markets poised to prosper, Templeton was actively researching and buying shares in foreign countries.

Templeton was focused first and foremost on uncovering bargains. By allowing himself to look outside the U.S., he was able to profit handsomely when U.S. stocks were overvalued. He didn’t place needless geographical limits on himself. He simply followed his research into the best places, and as a result, built a fortune by being brave enough to do things most investors would find unthinkable.

For instance, he recognized after World War II that Japan was transforming itself into a global powerhouse. This was not the view held by the majority at the time, given the country’s WWII defeat. But he presciently saw the future for Japan and began investing in the 1950s in the country – and, just as importantly, he got out after everyone else caught on to the Japanese story in the 1980s, moving his money to bargains elsewhere.

One of the greatest lessons from Templeton can be found in this quote from him: “If you want to have a better performance than the crowd, you must do things differently from the crowd.” That sounds a lot easier than it is, though. It takes courage to build a career by doing what others are too scared to do.

Written by his great-niece, Lauren Templeton, and her husband, Scott Phillips, who are exceptional investors in their own right, Investing the Templeton Way provides actionable advice for ways to unlock your own bargain-hunting tendencies as an investor. As counterintuitive as this sounds, learning about Sir John Templeton’s ability to think independently as an investor can improve your own ability to do so.

(Originally published here: http://msbusiness.com/blog/2014/08/22/book-biz-inspiring-instructive-look-value-investing-great-investing-templeton-way/)

Books: On To Sell Is Human: The Surpising Truth About Moving Others

Quick, answer the following question: “Are you in sales?” Unless your profession involves selling insurance, or cars, or something else specific, you’re likely to answer this question with a resounding “no.” But not so fast, according to best-selling author Daniel Pink’s newest book, To Sell Is Human: The Surprising Truth About Moving Others. In it, he argues persuasively that though the U.S. Bureau of Labor Statistics reports that one-in-nine Americans are in sales, the other eight of us actually are, too.

Using colorful anecdotes to personalize the points he’s making (including the story of the last working Fuller Brush Man in existence), Pink walks us through how economic and societal changes that began in the last century have affected how we define a “salesman.” To start, where formerly there was an information asymmetry in favor of the salesman, now thanks largely to the mass of information available online, the balance of power has shifted to the consumer. Consumers are better informed about their choices and what they want to pay for them than ever before. A car salesman or an appliance salesman has to be ready for this, knowing that there’s a good chance the person walking through their doors has done extensive research and can’t be “sold” in a traditional way.

The larger point, though, that leads Pink to determine that nearly all of us are selling in one way or another is the growth of small businesses. In smaller companies, roles and job responsibilities are by necessity fluid. The founder of a small business has to be able, for instance, to convince venture capital firms to invest in his company, to convince banks to loan him money, to convince stores to stock what he’s producing, and to convince his employees to remain engaged and loyal.

It’s this act of “moving” someone to part with something in exchange for what you’re offering — whether you’re asking them to part with time or attention or shelf space or actual money — that Pink’s referring to as “selling” in the new economic landscape. And just about all of us are doing it in one way or another, whether you’re trying to convert co-workers in a meeting to your way of thinking or even trying to talk your kids into finishing their homework.

Pink provides lots of practical guidance and tools in his book for those of us interested in improving our ability to move others and sell effectively. And if you still think you’re not actually in sales, this book might just surprise you.

(Originally published here: http://msbusiness.com/blog/2014/01/10/book-biz-new-look-world-sales/)