Robin Wigglesworth on the Creation of the Index Fund (Podcast)

all the d f A folks. I mean, I I feel like I really know this space, and I learned a ton of new stuff from the book. It's deeply researched. He spent a lot of time doing a deep dive into the area. I was kind of surprised by a

number of things. And if you're remotely interested in the rise of passive and indexing and all the academic background and how that translated in the real world into the practice of of investing, well, I think you're gonna like this book, and you're gonna like this conversation with no further ado. My interview with the f t S Robin Wigglesworth, This is Mesters in Business with very renaults on Bloomberg Radio.

My special guest this week is Robin Wigglesworth. He is the Financial Times Global Finance correspondent residing in Oslo, Norway. His focus is the biggest trends reshaping markets and investing, including technological disruption and quantitative investing. But more importantly, he is the author of a fascinating new book, Trillions, How a band of Wall Street renegades invented the index funds and changed finance Forever. Robin Wigglesworth, Welcome to Bloomberg. Thanks by,

it's so happy to be here. I'm happy to have you. Let's let's start with a little bit of background about you and your career. How does one go from the London School of Economics to the United Arab Emirates. Tell us about how that happened and how that led to a career in journalism. It's basically a happenstance. Um. I thought I always wanted to be a physicist, but realized eventually that I, you know, I was good at numbers, but not good enough to be anything other than the

mediocre physicists. And journalism sounded interesting, and I studied journalism, but I didn't actually like that that much. I did a master's that the LC and international relations Political Islam. You know, it was very much the topic of the day. And I was working as a subject at The Guardian, just doing online putting pictures and captions and things like that.

And I saw a job for a financial journalist in Dubai and I thought, well, you know, I know nothing about finance whatsoever, but you know, to bio sounds kind of interesting. I've studied the Middle East. This could be cool. It's either that or do my my service in the Norwegian Army. We start conscription over here. So yeah, I grabbed my bags and jetted off to Dubai to cover Islamic finance. Quite interesting. I totally relate to being interested

in physics but only being a mediocre um mathematicians. So they're they're when's that. So you're in Dubai, what was your first big story? A day after a landed, I interviewed the local sheiks about Islamic reinsurance, which is as esoteric as it sounds. So Islamic insurance is actually called takaffle, and Islamic reinsurance is called a retakuffle, and it's actually got a quite a cool, interesting twist to its fundamental Islamic finances, all about risk sharing that he's not supposed

to getting money for nothing. So famously, interest is banned, it's hot um under Sharia. So they were were various work grounds there that ranged essentially from gimmicks two actual series interesting mechanisms to make sure that people share in the risk and reward equally. And it was fascinating. I was petrified. I knew nothing about insurance reinsurance instead of not Islamic reinsurance. But you know it just it fascinated me.

I loved learning about new things, and here I was getting paid to learn about something new and interesting from interesting people. So I fell in love with journalism that day. And they have never left and never will leave. Industry really quite interesting. So let's talk a little bit about journalism. Uh, the Ft is printed five days a week. That's right, there's no weekend edition. The New York Times is seven days,

The horse Rejournal is six days. What's it like having to shove all their content into the more of that daily beast? How how much of a stressor is needing to keep the beast built? Well, it's actually a lot of fun. I mean, it's stressful, but it's not stressful compared to a lot of other jobs out there. My wife is a nurse. She used to work in a cancer ward. That certainly helps kip a bit of perspective.

And uh and you know, and my my first job in some of a big mainstream organization was actually Boomberg News and that's certainly know, a competitive driven organization. And you know, it was very much oriented around news and yeah, feeding the beast and getting stuff out there quickly. And I loved it. You know, I always joked that, you know, I mean that the ft far longer now, but if you cut me and I still believe a little bit

of orange, it really left its marks. So you know, these days, actually my job is fantastically relaxed because I primarily write columns, features, um long form stuff and and the occasional book when time allows it. And this was your first book. Did you have to stop working to dive into this or was this a side project? Well, it started off as a side project because it overlaps a lot with my day job. You know, I cover paths of investing a lot. It's one of the biggest

trends in markets and finance these days. But my plan was to take a decent chunk of off to write it. So I've been doing research on an ongoing basis, but writing is something I find, at least long form. I needed to vote a big chunk of time to do it properly. Unfortunately, when COVID hit I had to those plans just completely collapsed. There was no chance I could take any time off work. I was essentially doing twofold time jobs, trying to homeschool the children because my wife

was not home she was a nurse. And yeah, writing this every time I had like a spare evening, a weekend, every holiday in and parts of one went to this book. So it I think it worked. But I think if I'm having to write a book again, I'm going to definitely managed to carve out some proper time off and pray that there isn't another pandemic, to say the least. So you've been writing about markets and investing for well

over a decade. What do you think the investing public doesn't know about the business of news that that they really should. Now, it's a really interesting question. I get this a lot. In fact, sometimes we discussed it internally. Um, I think one thing that surprises people isn't purely business related, but it's the lack of a house view and even Frankie politics in journalism. I think fundamentally most journalists actually just think like journalists. It's a culture rather than politics.

We think in terms of good and bad stories, rather than pandering to owners. Advertising is and so on the way that many people think it operates. A lot of what outside is a tribute to ideology or commercial imperatives, is sometimes simply the culture of journalism, for good and bad. But on the business side, I mean, it's no secret that running or working at a newspaper is not a

great way to get rich these days. To paraphrase Richard Branson, I think the best way to become a newspaper millionaire is probably to start off as a billionaire and buy a newspaper. But I think where I changed, but I'm a little bit different from a lot of my colleagues, is that I'm actually quite optimistic on journalism as in the practice of it, as opposed to the business or the future for journalists, because I actually think the quality is getting better on average, not worse. We just have

so many more tools at our disposal. There's so much exciting stuff going on, so I try to remain an optimist, and I still think this is just a phenomenally fun thing to do. I'm going to agree with you, but I'm also going to credit the non journalists for forcing

journalism to up its game, at least in the finance space. Historically, financial media coverage, especially in the nineties and two thousand's, it was it was really superficial and a lot of clickbait and and you know, just what is the sexiest, flashiest thing. And I think a lot of people from from bloggers to now sub stack and newsletter writers forced a reckoning where the major media outlets how to how to up their game. They used to be pretty mediocre.

They're not. They're much better than they once were. No, I completely agree. Actually, I think you know, the dirty secret is really that nobody used to dream of being a financial journalist when they grew up, right. You know, I'm no different and I wanted to be a walk correspondent. I got to pay a walk correspondent for half a year during the Arab Spring when I worked at the FT and it was incredibly exciting. But just the intellectual

stimulation of financial journalism is just incredible. And I think the financial crisis was the tipping point that before then people ended up in financial journalism because that's where the jobs were for a long time and they generally paid better than other jobs. But since the financial crisis kind of hammered home to absolutely everybody how essential business finance

economics markets are. I just see the quality of the graduate trainees we have coming in just so much better when Frankie, when I applied for jobs, and these are people that want to be financial journalists. I actually know and have, you know, expertise far beyond what I had when I stumbled into that conference room to talk to a shake about Islamic reinsurance. So I definitely think things are getting better. Yeah, I think your absolutely answer something

with that. Let's talk a little bit about passive investing in index funds. It's really well trialed ground. There's only so much to say about it. One inspired you to write a whole long history of it. Well, as I mentioned, you know, the the rise of passive investing was something that I was covering, maybe not daily, but a lot. It was the the overall backdrop to almost everything I was writing about for a long time when I when led the market's coverage for the Financial Times in New York,

and you know, it was unambiguous. Lee this hugely important story that was not just affecting the investment industry. We know obviously the pressures it's brought on fees, but reshaping how the financial industry works in many ways, and investment banks were retooling their trading desk to deal with this phenomenon. Markets were functioning and acting differently in the area of path investing. So I started scratching around into the back story this. I mean, I'm not just a financial nerds,

come one. I have always loved history, and I do believe that we understand better where we're going if we understand where we came from. And lo and behold the history of the invention of passive investing. It was just far more interesting than idea to hope. It's just filled with these combative, titanic personalities having huge arguments and getting

shunned by their own industry. So you know, when when you're a journalist and you have a combination of an important story and a fun story, you just you have everything you need, or you you have everything you should need. And the more time I spent with it, I realized, No, this isn't just a magazine piece or a long feature.

This this would make, I hope, a really gripping book, a way to kind of explain this huge, important trend, but through the prism of these people and and what they did and who they were, because they were just fascinating people. Really, So let's talk about his history. As I was reading the book, I was surprised how deeply researched it felt. Tell us how you did this deep dive?

How did you uncover all the little tidbits that you did. Yeah, there's a there's a published history, you have Bogel's biography, and there's a bunch of other stuff out there. But you really went very deep into this space. Well, I mean it sounds incredibly um over the top that you know. Isaac Newton once said, if I've seen further, it's because I stood on the shoulders of giants. And I am no Isaac Newton, but like you say, I stood on the shoulders of many giants that went before me. So

Jack Bogel famously wrote many, many books. There are many people that have written about parts of this. You know, people journalists and Bloomberg have written phenomenally interesting features about the birth of ets. Peter Bernstein the financial history and has written a really interesting book on on on Wall

Street in the seventies and the academic ferment. Then. So what I try to do was essentially combine and synthesize all these disparate sources and combine them with just I mean, god knows hundreds of of interviews with you know, primary characters, secondary characters, other people that fill in blanks hearing there, and just an exhaustive dive through the archives of institutional investor and pensions and investments in the Wall Street Journal

and combine that into one holistic narrative. But essentially it was just a lot of work and juggling a lot of different strands of information and then cross checking what person A said versus what person B said, and what the contemporary these newspapers might have said at the time. Because you know, as as the cliche goes, success has

as many parents. You know, the Index Fund is definitely a success story, and there are many many people that after the fact sometimes seek to yeah, paint repaint history a little bit, maybe give it a bit of a chine that it might not always have had. So I'm gonna skip over some of the early history, the Wells, Fargo, Sam Snight, and a lot of the academic history and just fast forward us up to Vanguard, because it, in your telling, it almost looks like the Index itself was irrelevant.

The Jack Bogel, the founder and first CEO of Vanguard, his cost matters hypothesis almost made the group of holdings irrelevant. It was the fees that mattered most. Discuss that a bit. No, it's a great point, and I think Jack Bogel is a far more complicated character than Frankie. He pretended himself and a lot of people um semas. I mean he was undisputable, you know, one of the great men of history. I mean, he is one of the most incredi of

people I've ever had the privilege of interviewing. But I actually think he's more interesting than he pretended himself, because he was not a necessarily a fan of Index thing, not even all his private Vanguard. This was this is an accident of fortunate accident. In his defense, he was definitely always a fan of low cost investment. That seems to be backed up with his writing going back to his days when he was a wonder by at Wellington.

He was a senior executive at Wellington and the air apparent to Walter Morgan there uh he and he liked the idea of mutualization, well at least he at least had thought of it before Vanguard was set up. And with this unique ownership structure being owned by its own funds. Let's let me stop you there and jump in, because in your telling, the mutualization of Vanguard also seemed like

an accident. It was a function of their contract that they previously had with the company they were with Wellington, that they ostensibly were trying to it free from the idea of a passively managed index was hey, it's unmanaged, therefore it doesn't violate our manage no managed funds contract and the idea of creating a mutual allowed them to escape a fee structure they didn't want to be involved in. Him. Am I overstating that? Or is that a fair assessment? No?

I think so, But I mean so. Jack would often afterwards talk about, you know, strategy follow structure. So if we start with the structure, the reason why Vanguard is mutually owned it's not just because Jack Bogel liked the idea of mutualization, which he did, but I doubt he would have mutilized if he'd stayed the CEO of Wellington's.

But the fact is that he merged Wellington with a hot shot go go fund manager from Boston in the sixties, and when the sixties go go error ended with a bang, essentially the other people his partners own more stock than he did and they sacked in the CEO. So as a hay Mary, he went to the board of the Wellington Funds because all mutual funds and need to have their own independent boards in theory, at least in the US, and trying to argue that they should essentially buy themselves

out of Wellington's. And this was it was a hail Mary and Frankie. The legal representation at the time was very clear that the SEC will not like this. Clients consue us, Wellington consue us. So as if favor to Jack Bogel, the boards of the Wellington Funds, the independent boards of the Wellington Funds said that they'd set up an administrative company that just did all the clerking jobs,

all the paperwork for the funds. That would be owned by the funds themselves, but the investment management, the distribution, the research, the trading, all the sexy part of investment management would stay with Wellington. But Jack Bogel basically this really you know, first of all, the sacking hurt him, and he used this as his platform to essentially get

revenge on the Boston Partners that sacked him. And like say, Index Funds, he later said that he had never even heard of this until he read about it in the Paul Samuelson article. And I think that is, first of all, just actually inaccurate, because he pseudonymously wrote an article attacking the idea of Index funds and anonymously, you know, many years earlier. But he also saw the potential right and he saw that this was unmanaged. It was a gimmick.

It was essentially a ploy to get out from under the thumb of the Boston partners and it worked quite interesting. Let's talk a little bit about State Street. They're the first ones to market with the spiders. Spy become one of the largest CTFs ever. Tell us how that came about. Well, essentially, that story starts with Nate Most who was this unusually brilliant, eclectic, pretty old by then head of derivative product development at the AMEX, the American Stock Exchange, you know, very old,

came out of the curb side in New York. Uh, the kind of found derivatives as a way to kind of try to stay relevant in an era where you had Nisy years that as a big brother that dominated listings, and NADAC was kind of the hot rising exchange. But they still they needed to find something. So Nate Mos had the brilliant idea together with one of his partners

called Stephen Bloom, to basically lift tradeable index funds. They thought they might go somewhere like Vanguard for example, and get Bogel to list index funds on the AMEX so people could trade them throughout the day, because then they might get more customers and the AMEX will get trading revenues. Now, it turns out that Bogel absolutely hated the idea. It was just anathema to him, the idea that you trade

a fund in and out all the time. He wanted people to buy a Vanguard five fund and hold it forever. So he turned them down and Nate Most went to State Streets instead. A State Street had a big institutional business in indexing, so they thought, well, yeah, we could

totally do this. This is probably possible. But it took years and years and years, and ironically a group of Canadian exchanges managed to essentially copy the plans and they got help from the AMEX because the AMEX didn't see them as a straight competitor and managed actually to list this isn't wide, you know, the first ever ETF is actually listed in Canada. They managed to just steal ahead of the State Streets and AMEX team because the SEC was very, very slow about this very new fangled product

that had a lot of hair on it essentially. But that's how that happened. And it's quite a journey from where it wasn't to where it is today, to say the least. And it's become you know, a few bibs and you know the interesting story. And I recall this and I think All Street Journal a couple of years ago, Hey, how did State Street end up losing their leads there? They're one of the pioneers in the US on both passes and ets. How did they get dethroned by Vanguard

and Black Rock? It's a great question. That actually, look, I have an answer in my book, but it is an answer. I think sometimes these things happened, but I think it came down to basically State Street not realizing what it had in its hands. So you have to remember that this was primarily in AMEX idea that State three did because it worked well with their strategy. But index fees on the institutional side were under massive pressure, so they just didn't think of indexing as a potential

cash cow. They didn't see the potential of ets as these basically lego like bricks that you can build broad portfolios with. So they did it, and they put something money into it, they just didn't invest enough, and at the beginning, e T S was not a great business. Ironically, Barkley's Global Investors did also launched soon afterwards something called Webb's World Equity Benchmark Securities, which is kind of a copy of of of the spider that am X and

State Street had done. Webbs and spides I was like the intentional gimmick, and they'd also struggled. But what b G I later did under you know CEO Patty Donne, I think one of the great under estimated CEOs in American corporate history and pretty remarkable for being not as a woman but also somebody who wrote from to be

secretary to CEO and chairman. Uh. She, together with a guy called the Crane, first realized the potential of this, got Barclay's the UK Bank to commit to massive funding, and they essentially did what Silicon Valley today call blitz scaling. They basically launched tons of ETFs, just chucked ets out there and lies, if your first you can win, you can become the incumbent. So I think it was a mix of State Street kind of doing fine but not realizing the importance of what they've invented, and b G

I eventually realizing it and just chucking resources at it. Vanguard. I think it's later done well purely because it's Vanguard and they have an enormously positive brand among retail investors. So let's stick with b G. I. How did how did we go from Barclays too I shares to black Rock? Give us that history? Well, it goes back to the first index fund communiately for my book narrative of course, but wellth Fargo set up a new into unit called Wealth Fargo Investment Divided Advisors w f I A to

house the first index funds that they did. Now, the issue was w f I A was that it was filled with lots of brilliant academics. I mean, it's one point six noble laureates consulted for that unit. It was one of the biggest economic think tanks in history. I'd argue, UM, but they cost money, and index funds didn't pay a lot of money. So w f I A was always incredibly brilliant, but it didn't actually turn a profit until

the eighties, so then it was taken over. Basically almost came close to collapsing in a battle between w f I A and Wealth Fargo the mothership, but eventually they hired a guy called Fred Grower, and he managed to turn the ship around just as the U S stock market started on the biggest strongest bull run that's ever had pretty much, and you know, so there's a bit of luck and a bit of skill. But then he merged it with a Japanese asset manager, but eventually managed

to sell the whole thing to Barclay's. The man merge it with Barclay's asset management unit UM, but essentially just became w f I A. Two point but under the name more Barclay's Global Investors. That was where Webb's was invented first, and that was a bit of a nothing burger. Frankly, Webbs became Ice Shares and then black Rock. I could see where the world was going, where the investment world is going, quicker than many other people, and when Barclays

was up the creek without a paddle at all. In the financial crisis, Barclay's basically had to sell the family silver and black Rock was quickly cheap and they paid to pay more. Historically, it looks like it was a pretty cheap sale. What do you recall what this was sold to black Rock for. Well, the agreed price was thirteen and a half billion dollars in cash and equity.

So by the time the deal closed at the end of two thousand and nine, I think it was the final tag because black Rocks shares have gone up, was

around fifty billion. But yes, I mean, by far, probably the great I mean, certainly the greatest deal in the history of ATM management, and probably the greatest deal in the financial industry as a whole, and possibly I mean, I'm I'm trying to think of a such a slam dunk in hound sight acquisition in the history of M and A really obviously the history of M and A litted with with car crashes. To put put some numbers on it, black Rock now manages a little over a

little under nine and a half trillion. That's trillion with the T like the title of your book. And their market cap is just under a hundred forty billion. That that fifteen billion dollar acquisition is really, you know, just world beating talk talk about r O Y. It's quite amazing. It's incredible. I mean it's just I mean you can see it on the profits. I mean, black Rock is more profitable than Google. I mean, the profit margins in as management are actually quite good. Despite me of the

pressure that the industry is under. The dirty secret is that it's actually quite a profitable industry and black Rock is best in class and it is large thanks for the acquisition or b g I, and it's et f unit isshes and the broader indexing universe and a lot of the more quantitative investing side that they also inherited along with the purchase. So it's been incredible. I mean, you know, basically the b g I now is just

that part. If you split that out, I'd argue that's probably worth more than all of Barkeleys today, Barkleys has essentially gone nowhere. Black Rock is now bigger than Golden Sacks in market cap right, quite quite amazing. We were talking a little earlier about how deeply researched the book was.

How much access did you get Because a lot of these figures are still around, They're they're not youngsters anymore, um and Jack Boggle passed a few years ago, but a lot of the main characters in the book they're still all around. Did you get access, uh, to people like Bill Sharp and and David Booth and Gene Farmer. Yeah? So, I mean my access was great for the most part.

I mean, I genuinely do think most humans are actually quite helpful if you can, you know, make sure that you you impress upon them that you're not gonna be wasting their time. And some people, like you said, had sadly passed away, like Lewis P. Kelly obviously pass away almost a century go. Jim Verton at Wealth Fargo was an important figure. He passed away just before I started reporting it. Bill Faust passed away in the process of it ate most passed a few way quite a few

years ago. And there were some people who won't name that just didn't respond to emails or calls or just who were the difficult people and getting the book together, you don't know they know. I mean they know who they are. Let's go that way. But broadly speaking, look, I mean people are busy and maybe they're working on the Room book project. I don't want to give away the crown jewels as it were. Um So there are

many reasons why people declined to interview. And I have to meet like as a journalist, I want everybody to talk to me all the time. But I think now you have to be understanding that not everybody feels comfortable with that. And a lot of people were incredibly generous with the time, including Gene Farmer aspect too many times mc McCown. David Booth built sharp but is an incredibly kind, generous, interesting,

genial man. And a lot of these people are in the eighties and some of them are in almost in the nineties. And I swear if I'm half as sharp at half the age, I would be a very lucky man. There's something about fine that's an economics that seem to keep a lot of people quite young. Well, that's a little bit of survivorship bias in the sample set, because you're only speaking to people who are alive, literal survivorship bias.

Tell us about something with without spoiling the ending, tell us something from the book that was really surprising, because I'm going to share a few things with you that I was genuinely surprised about. But what surprised you? And I'm looking forward to hearing what you think. I mean, I think that that the Bogel issue that we touched upon, it was really interesting that here was a far more multi facet character. Uh. Then I think people realize and I wish I knew all the stuff I know I

now know and could talk to him about it. Not because it's salacious or anything like that, but he's he's become even more of a hero in my eyes because he is more multifaceted. I think that was really interesting. Uh, And probably sadly a lot of people only felt comfortable talking about some of this stuff after he passed away

in twenty nineteen. One thing that didn't surprise me in the research, but actually happened almost fortuitously in the middle of writing my book, but it was the stress test that happened for the E t F ecosystem in March.

I guess fortunately it is the wrong word, because obviously that was a horrific period for the world, and I was generally worried that we were going to have a obviously we're having a global health crisis and an economic crisis, but we were perilously close to having a financial crisis on top, and especially bond ets came under a massive pressure, and before the fact, I would have predicted that we would have had serious breakages. But I was actually positively

supplirized by the resiliency of bond ets in March. And I know a lot of people don't agree with me on that, but I think that was one of my big takeaways that I've moved from the Quartius skeptic, virgin cautious optimists on on E t F and credit ETF to being more wholehearted behind that this is actually more resilient supple product and people sometimes give it credit for So first, you're right, and the proof is in the

pudding the people. And we're going to talk a little bit about some of the criticisms of passive and indexing and ETS in a bit. But if ever there was an opportunity for for those vehicles to collapse, well, not only did they all survive O eight or nine fine and the flash crash in on ten and later, but they came through. I mean, how many disasters do these products have to live through before people will admit, Hey,

they seem to be robust and resilient. They survived just fine. Yeah. No, I I think people look at the Federal Reserves intervention, the extraordinarily aggressive intervention, as a bailout of ETS, and I definitely think like the FED bailed out markets, and

they did by ETS. But I am increasingly convinced, having talked to people about this and been digging around this for a while, that we came far closer to mass closure of bond mutual funds traditional bond mutual funds then we did serious breakages in the credit et f ecosystem.

Those structures might not be perfect, and maybe the next crisis will reveal some fault line we don't know about, but I think that nobody can be honestly looked at March and what happened there any people from the Federal Reserve to the Bank of Canada and other people looked at this and it will come broadly to the same conclusion that credit ets were at worst not a contributor to the issues, and actually probably in some respect helped dampen some of the issues we saw in the financial

system at the time. Dampener is a really good, good word for that. Let's let's stay with the book. There's a quote from Paul Samuelson. I really like that your reference. He ranks the birth of the vanguard five hundred funds alongside things like the invention, the wheel, the alphabets, the printing press, wine and cheese. Is he overstating this a bit? What that? That's really um? You know, he left out fire. But other than that, how is an index funds comparable

to the wheel and the alphabet? Samuelson, aside from being, you know, one of the world's greatest economists, I mean his his textbooks are quite literally still of the textbooks that most economist read. Um, he was that he would He was a bit of a joker as well. He liked tweaking people, so I think there's a fair bit

of over the top wittiness there. But he genuinely did believe that this was an incredibly important invention because you can imagine, you know, sometimes the gains of this are so ephemeral that we we don't really focus on it. But the fact is that everybody on the planet pretty much who has savings has benefited from the indexing revolution, even if they don't invest in index funds, because of

the price competitive competition that they have brought. Not only can you now put money in an index fund that you know, I've seen people calculate, have said Americans just in the past twenty five years three d and fifty billion dollars. They've saved all of us trillions of dollars in total, because the average cost of a mutual fund or hedge fund even has fallen by a third over the past two three, three decades. And maybe that would have happened without the invention of the index fund, but

I don't think so to the same extent. And you know, these somethings are going to be in the trillions. So in a small way, but an important way, the invention of this, how is helping hundreds of millions of people have a little bit more for retirement than they normally would have. So is it fire or the printing press. No, but is it genuinely one of the finest financial innovations in history and certainly of the past fifty years, And ambiguously I would say yes. You know, you're not going

to get any disagreement from me about that. UM. In the US, passive has been pretty robust. More than half of the mutual fund and e t F world is now consumed by by passive. It hasn't quite caught on as aggressively in the rest of the world, but there are signs that's changing. Tell us about this as a you know, not necessarily US only phenomena. How quickly is the rest of the world catching onto passive as an investing strategy. No, it's it's an interesting theme seeing this

become more globalized. I mean, clearly the the you know, the the origin story of of index funds is clearly American, even though you know they the origin story of of pooled investment trust goes back to the Netherlands and the UK and hundreds of years ago. UM. It has caught on in certain markets, but it depends a lot. And this is somewhat technical and dull, but the distribution models take Europe, for example, in Europe. The overwhelming distribution mechanism

for investment funds is banks. Banks are the sentralled locusts, and banks tend to not want to steer people into cheap products managed by other people. They tend to steer people into products that they manage themselves and have pretty

empty fees. So you can always see there's not a perfect correlation, but pretty close to one between you know, how dominant banks are in distribution and the adoption of passive So there are some markets where this has gotten pretty far, and there are some markets where there's a lot of quasi passive. Think Japan for example. There are a lot of investors there that might not say that they are passive or this is an index fund, but

they are essentially passive um. But clearly this is something that works elsewhere that there are some markets that are less efficient. Emerging markets are less efficient than large cap us equities, so you can see that active managers do do better there on average before and after fees, but

in the long run they still underperform the index. So I think the data is a really hard taskmaster here, and as the day it becomes more widely known in more markets, whether China or India, or Europe or Norway where I'm based. It's just going to grow and grow and grow, because I think there's a lot of room for money to shift from expensive on average underperforming products the cheap passive ones really really quite interesting. Last question before I share my surprises from the book with you,

what sort of pushed back did you? Again? And any whole decide? The people who who ghosted you and never responds to emails, any of the organizations or individuals push back, Vanguard, d F A, Black Rock, anybody say, hey, your conception of this is all wrong. No, they they were all helpful, but too very varying degrees, and at various times maybe one organization will fall on for this is an amazing story. Yes, we'd love to help you tell it. And then they

suddenly ghosted me and refused to from my emails. Um and broadly speaking, as you might imagine that the chapters that deal with more present day issues were more sensitive than the historical ones, even though the historical ones were in many ways harder to report because frankly a lot of them characters had sadly passed away or memories had dimmed sufficiently that it was sometimes hard to piece everything together.

But broadly speaking, I have to say, you know, whether it's a black Rock or Dimensional or Vanguard or State Street, you know, people were incredibly helpful. I mean, the journalist lives and dies by their sources, and my book would be a pile of crap if I hadn't gotten so much help from so many individual people, sometimes at these organizations, because sometimes the organization itself might be standoffish, but there

might be other people in there that designed. Actually I'm just going to help out anyway, because meantly, most humans are actually kind of helpful. So you know, I cannot fault anybody really, um everything. I'd love people to have opened up their personal email correspondence or letty correspondents going back fifty years, but within you know what was realistic. I don't have any major complaints. Really interesting, all right, So I'm going to share. Look, two things in particular

that I was genuinely surprised at in the book. And I kind of knew around these some of things, but I didn't I certainly didn't know all of it. And and the first was just how really incidental the index was, along with the mutual structure to the rise of Vanguard. There's no doubt in my mind Vanguard would have been successful regardless, but there's an incredible amount of just good fortune that turned Vanguard into a behemoth. Is that a

fair statement? I think so. I mean, I think maybe the secret here is really that in any success story, we sometimes over attribute it to the brilliance of the people involved, and under a attribute it to just blind luck sometimes. I mean, when I think of my life, I'm sure you can do the same with yours. And we know, you know, luck in serendipity, you can be

good at taking advantage of that break. And Jack Bogel was unambiguously brilliant, and like you say, you know he was not going to die of failure almost whatever he did.

But a lot of it was timing. I mean literally just imagined that Jack Bogel, the reason why he ended up in investment management was just he happened to be at Princeton's Library and reading out the Fortune magazine that had an article about this hot new invention called the mutual fund, and he thought he was interesting and cool, so he wrote his thesis about that, and that got him his first job at at Wellington's and then he got sacked from Wellington by the people he had merged with.

Imagine if he hadn't imagined if Wellingtons had decided, no, we are not going to merge with anybody who We're just going to keep plowing on with our boring conservative funds that looked really unsexy in the Go Go nine sixties when everybody wanted xerox in IBM that it was

the third dot com bubble. You know, actually, Wellington's would have looked really good when the dot basically the sixties bubble bursts in the seventies, because they would have looked really steady, and he probably would have retired eventually as an immensely successful but largely anonymous CEO of a major mutual fund company in America, and nobody would really know the name Jack Bogul outside of some corners of finance. So his sacking actually ended up being the making of him.

And then even when like when they basic form bangor there's so many englisttle lucky breaks that happened, you know, him just reading an article by Paul Samuelson about indexing when he was sitting there skewing and angry and wondering what he was going to do with this new grand the those grandios be named administrative company called Vanguard. I mean, it was a company that did paperwork from mutual funds

called Vanguard. It had to do something sexy, but he didn't know what it was until he read Paul Samuelson an article saying, Hey, I see lots of really interesting pension plans are doing some interesting stuff for and index funds. I wish somebody would do this for ordering investors. What if you hadn't read that article? So it is incredible to think about this and the I love this in all history books, all stories about people, really just how much serendipity plays a role in how events turn out.

You notice say that, say the very least, we seem to often be one random left instead of a right away from the world being very different than it turns out. Uh. The second thing I wanted to ask about that I was shocked, having interviewed Bogel once and Jack Brennan twice, is I had no idea about that fallout. That fallout is really something substantial, and you know, obviously neither of

them advertise it. Brennan still speaks very glowingly about Bogel and the opportunity he created, but that that really was kind of a surprise, how everybody stopped talking to each other. No, it was you know, people can fall out, and good friends can fall out and maybe stay enemies or don't talk to each other for a long time, but this

was far beyond that. And I have to admit that I think I have the broad contours of what happened, but the two main people, Jack Brennan Jack Bogel, have never ever talked, not just publicly about this, but frankly to even people that know them. I spent a lot of time talking to some of the people are very close to both men, and none of them said they really knew the exact details of this schism. But I think it was incredibly painful for both because they were

so close. I mean, Jack Brendon played the role that Bogel had played for Walter Morgan at Wellington before the ear Apparent, the boy Wonder, and he was the yeend to Bogel's yang. Bogel was all vision and charisma and statesman like behavior, and Brennan was probably again one of the great underrated CEOs of America, just somebody who everybody I talked to said he was a phenomenal manager, that Vanguard would not nearly be what it is today if

he hadn't taken it over at the right time. But yeah, they fell out, and you know I have in the book, you know, the broad contours. It was Bogel's heart failure and he basically couldn't keep working. So he handed the reins over to Brendon and then he got a heart transplant and made him miraculous recovery, and when he came back, essentially thought that he was going to take over the company again. And that ended up with a big battle with the board, and the board sided with Brennan and

he was no bringing chicken at that point, right. I mean there was a mandatory retirement age coming up regardless, yes, and the all the mandatory retirement age that Bogel had instituted himself, right, But I think I mean clearly the board, and this is Bogel's argument, the board could have overturned that if they wanted to. The dirty I mean, it's not even does think The obvious secret here that everybody

knew at the time and all the press knew. You can see it in the subtext of the writing was that yes, the board could obviously have overturned this, but they thought that Brennan was a better CEO for the Vanguard of that time than Bogel. And you do a nice job in the book explaining that, hey, Brennan could not have founded or launched Vanguard. It needed someone who

was more visionary. You know, the parallels today are Steve Jobs as the visionary behind Apple, but Tim Cook is the guy who makes the trains run on time, the the you know, the operations wizard. That parallel was very much there with with Brennan and Bogel, No exactly, And I think it's it's something we see again and again in corporate history that different types of seers work at

different points of a company's lifespan. You know, you just think of in personal relationships, who you might have dated and when you're in your when you're eighteen nineteen is not necessary who you maybe should end up married to write, And Brennan was exactly the person that Vanguard needed, and Frankie had been running the place for quite a few years before he formally took over. The tragedy was that

they never made up. When Bogel did kiss and make up with the Boston Partners that had fired him decades earlier. He'd read the story about Hamilton and Jefferson and how they made up and was inspired and got in touch with them and they used to hang out together. But he never made up with Brennan. Even on his deathbed when people, some of their friends trying to engineer some sort of reproach more and you refused. And that's tragic. Yeah, that that was the single biggest surprise, uh in the

book to me. Also, I want to push back on some of the criticism of indexing, because let me just start off with this Paul Singer quote. We are always amazed by decent ideas and insights which are stretched so far beyond their original version that they become caricatures of themselves and sometimes contrafunctional. So so that's a true statement, except I don't see how this applies to either passive

or indexing. What's the beef with indexing other than it's costing Wall Street a lot of fees, it's costing big firms um to have to provide more services at a lower charge. Other than that, Mrs Lincoln, what's the problem

with passive? No, it is it's the you know, twenty trillion dollar question now probably right, um, So clearly you know you cannot entirely disentangle the criticism from the fact that this is essentially cheap, simple product being offered in an industry that does not like cheap simple products, plexity and expense. But I think I think sometimes indexing proponents, including men you, right, we sometimes it's too easy to

dismiss the criticism as pure sour grapes, right. I think at some point you need at least try to engage on the factual basis. And I think there are some areas that I think are essentially total ball, the criticism or the total ball. And you don't believe that indexing is a communist plot or anti American r No, I do not. I think it's very much. You know, it's a free market. You know, it's most the perfect embodiment

of capitalism. But what about the criticism that, hey, all these companies know they're all owned by big indexes, so they're gonna get together and conspire to fix prices. I don't mean the investment companies, but hey, all the banks are owned by the same companies, and all the airlines, and we're going to see price fixing. Yes, so this is the common ownership theory. Um, so it has many passes to it. So funny. Mean, I do think this is one of the thornia ones. I do not think.

I am convinced that, you know, these companies, these investment companies are not getting together with portfolio companies because they're a black rock and Vanguard own yes, a big chunk of very major bank in American every major airline, and every major hotel group and telling them to essentially fix prices. Uh why why wouldn't they do though? Isn't there a ton of upside for them in in their struggling businesses? Would they want to engage in illegal antitrust behavior because

they're all doing so poorly? I mean, the theme the thesis could be one of the stupidest ideas I've ever heard in either of finance or legal that these three giant, wildly successful companies who couldn't care less about the cost of hotels or airline tickets are somehow can to engage in a conspiracy to fix prices. I don't like. I'm looking for some rationality there, and it's just talk about flinging stuff against the wall to see what sticks well.

I mean, it's brawling it down. It's about whether incentives matter. And I think that we can all agree that incentives in some form of fashion do matter in how we structure the moderate economy. And I think I completely agree that there is no cut how behavior whatsoever going on. And I think the the example that the perfect example that people have kind of shown in data that kind of struggles in the face of common and this common

sense is airlines. The idea that airlines you could see that, you know, whether it's great cross holding between investment managers and airlines. They seem to compete less aggressively. The problem is, of course, there's hard in industry that's gone more serily bankrupt for half a century than airlines. Massive consolidation. What are they're like for what are their four major carriers today? They used to be fourteen. It's just they they you know,

that's the exception that proves the rule. They had to use airlines, but they ignored technology, they ignored finance, they ignored consumers. There's a million other sectors that they had to ignore because there's no evidence. So almost randomly, you know, airlines have never been a good business, at least dating back to kitty hawk, And so think about all the

airline companies that have gone belly up. It shows you if you're gonna use airlines as your example, and you can ignore technology or consumer goods or fine, as you've already lost, you've admitted your your thesis is intellectually bankrupt. Well, I mean, so we need to split out the theory from the evidence. And I agree that the reason why they use airline is purely that they had very granular data on the costs of individual lines and competition between

hubs and so on. So this is what they had good data for. The theory is and again this is something that you know I can I am very much on the fence on and probably leaning through the all skepticism. But the idea that if you are a CEO of a company and you know your major shareholders are also the major shareholders and all your competitors, does that somehow even subconsciously dent your winningness to compete aggressively even by a little bit. Now, I think there are all sorts

of other incentives embedded in a CEO job. I mean, just the fact that obviously they comp is usually time to share price. So if competition makes sense, then they will compete aggressively. But it is within I think theoretical possibility that if you are the THEO of a company and your major shareholders are all major shareholders in your rivals, that you might be slightly on the margin less inclined to compete aggressively. That is at least possible. But I

see these concerns is more a manifestation of this. Why the concern that the big three, State three, black Rock, and Vanguard, but primarily Vanguard and black Rock are just so enormously gigantic now and I'm just going to get bigger and bigger. And this was something that bothered even Jack Bogel before he passed away. So so to put pieces of pushback on this and you could see you I've spent some time thinking and writing about this. The first is everybody wants to talk about the fund industry,

but that's a tiny percentage of the overall assets. Have more than half fifty something per cent of mutual funds and ETFs are passive, not active. But you know, that's a twenty trillion dollar industry out of a hundred plus trillion dollars. The vast majority of stocks, bonds, and other

assets are still owned actively outside of funds. So within that little group, you're gonna ignore the balance of the ownership structure of your that that's what makes this a fever dream of of law professors and and not reality. I mean, the reality is most equities are held actively, majority of funds are passive, but funds are a minority

of of investing dollars. Tell me where that's wrong. No, No, I agree, And like I said, I'm the reason why I said I'm still on the fence rather than fully kind of shrugging off this there it's not just a concern about where we are now, but where we are heading, right, I mean, given the economics of indexing, black Rock, State Street, and Vanguard are already you know, the biggest and the cheapest providers of index funds and in funds in general. And this is a an oligopy that benefits us in

the form of cheaper investments. But they are now account for around the quarter of all vote casts on average in the sure Yeah, and with the next couple of decades, we're going to be colosted given the growth rates. And this is something Jack Bogel not exactly you know, an enemy of indexing said that this kind of concentration would probably not be in the national interest. So I see that the common ownership theory is just one part of

a multiheaded hydra. That is the the gigantism that the the inexorable logic of index funds and the economics of index funds means that the big will become bigger, and at some point we are going to be in a world where essentially they control the majority of most major companies in America and even in the world. But to get there we have to ignore. To get there, we have to ignore. The past two years have not been about indexing, have not been about passive investment. It's been

about memestocks and robin hood and actively trading. And by this cell that you know, the mind share that active um investing and trading has grabbed from passive since the financial lockdown has begun, has told you that half the world are our closet day traders just waiting for an opportunity to come out of there um spidy holes and uh start trading. How do you explain the rise of everything we've seen over the past two years in the face of efficiency and low cost of of the passive

side of the world. Well, fundamentally, I think hope springs eternal. Everybody thinks and wants to try and beat the index. Everybody wants to get rich. And we've seen throughout history these these manias, sometimes the last for a few weeks

in the weird esoteric corners of the market. Sometimes they've been you know, countrywide or even global, such as the dot com bubble famously, and over time they they tend to end always the same way, in a massive burst, and people get their faces ripped off, and there will be congressional hearings and so on. I think this is a little bit different in that there are secular changes in the financial system, such as free trading, gamified apps,

social media. That means that this is probably going to be a little bit different at some point that things will settle down, but it's not going to settle band to what we saw before. But even this year, a year that has I agree, in the past eighteen months characterized and largely by the the rise of retail trading and active funds have actually taken in billions of bowls

this year. It's more it's almost the exception that proves the rule that even in a year where this has been going on and active has had inflows for the first time in over a decade. Essentially, hundreds of billions of dollars have gone out every year from active funds, year after year after year after year, essentially for fifty and sixteen years since the dot com bubble, and this year they've got taken in. There were I think a

hundred fifty billions. Passive is still taken in. I think close to five or six hundred billion dollars, And if include market gains, we're still saying it's it's gaining market share, it's growing, and it's broadening out. Index bond funds, passive bond ETFs. They are now growing. So what was primarily an equity phenomenon is now gaining groups, setting routs and

far broader swaths of markets. So definitely this year is all about active, but we know that the data will show that the majority of active managers at the end of one will have underperformed, and over the ten years, past ten years, the vast majority of them will underperform and the money will keep shifting because a lot of this is an autopilot target date return funds, pension funds,

let know the data. They will just put money in cheap index funds and forget about it, essentially and do better than most of the active traders out there, who sadly, I think, you know, at some point some of them will become millionaires, but most of them will end up losing a lot of money and it will be a very sad denial. More. Yeah, farmo is a big deal.

And as much as people like saving money and being passive and guaranteeing themselves some beta, you know, the idiot next door buys some hard stock or some crypto coin and makes a ton of money and suddenly everybody thinks their day traders, So let's talk. Let's talk a little bit about um. You mentioned smart data and factor investing seems to have been struggling over the past couple of years.

Value oriented funds like d f A you have seen a performed performance lag value has underperformed growth for more than a decade. How do you put that into context? We we thought we saw a factor investing and the farmer French factors as as a sea change. Is this going to turn out to be a temporary phenomena or or or is this the underperformance temporary. Uh, it's it's one of my favorite themes. I mean, apart from some past investing, it's the quant investing is one of my

main favorite subjects out there. I think, I mean katy. Factor investing has fallen out of favor primarily because, I mean, some factors have done well. Momentum has done wealth quite a while, but the big mainstream ones like value especially has had a awful run. I've seen studies that show it's done. The worst is basically financial records began essentially like two three hundred years ago UM and most most

notably a lot of quant hedge funds. You know, the more sophisticated complex strategies also did suffer a lot in because we entered an entirely newmarket regime and models that were trained on existing financial data essentially, you know, data that that didn't have any pandemics in them um discontackle. So they they fizzled. But I think the broader phenomenon or factor investing in quant investing, certainly it's still alive and well because fundamentally, I do believe the data on

these factors is pretty robust. The problem is, I think that when it comes to the factor stuff. I think for a lot of order investors, the discipline needed to hold onto them is so enormous that the vast majority of people should stick to boring play dumb beta, as you know, one might call it, because essentially, yes, over a twenty thirty year period, you might do better in

a value fund. But you know, when you've got a ten fifteen year draw down like we've had now the long run, you know, in the long run, we're all dead, right, it just becomes so difficult to hold on. The reason why these factors work is because on the drawdowns to large extent, West Gray famously said even God couldn't stay invested in a deep value fund. No, I think, I think, I think God would have bailed out a few years ago.

I think it's only a few very dedicated value people and Cliff Fastness left standing and that in that trade. So good year, now, right? Yeah? No, this year, This year has been good for both both some value players and some of the quant funds. Let's talk about that a second. You you cover quant funds in the f T and it kind of seems like, I don't know, the past eighteen months twenty four months cover Ridge news flow on it has really died down, perhaps following some

softer performance of the big quants. What's going on in the world a quant well, I think broadly speaking it because you know I talked about the cultural journalism, right, I mean, we knew is better than old, bad is better than good, and kind of nothing to write home about is nothing to write about, essentially. So when quant was considered hot and sexy and fun and that's what where all the money was going, there was naturally a

lot of coverage on that. And when quant funds had a terrible time in twenty a lot of them that famously, even Renaissance, you know that the big daddy of the quant world had a terrible years in many of its public funds. UM people wrote a lot about that, including me. But now it's kind of just generally a story of improving returns. Nothing kind of sensational, nothing that's going to make the front page of the journal, war or the ft, but you know, it's just better across the board a

qu are. There's a big factor quant fund is doing better as well. But for the reason why I spent so much time thinking about this and covering about this, it's just fundamentally whether way our investor is going to be using more technology to invest more systematically in the future or less, And I think the direction of travel is just clear. So that's why I spent lots of time on this, because if you want to understand how mark is actually functioned today, let's learn how they are

going to function in the decades time. You need to understand the quant ecosystem. So I'm just trying to go where the puck is heading. And I think we are going to see convergence as more and more discretionary people kind of become more quantity and some of the quants even add a bit of a discretionary overlay that this kind of always a little bit blurry line between systematic and discretionary investing is is going to get washed out a little bit, I think in the coming ten years

or so. Let's tackle a bit about skating to where the park might be going. You briefly mention um direct indexing. What do you think about this? It's small, but it's rapidly growing and it's a very interesting take on the concept of passive investing. No, there's a fascinating trend and I do actually think it has a great future. People clearly do want customization. I mean, I might make it like it in many areas as well. We've got to

use it some many other parts of life. That makes perfect sense that this is coming to indexing as well. But I still think that the vast majority of people still want simplicity and especially in their financial products. So you and I, you know, slightly moved, slightly more interested in these things than the average punch on the street. Might want to fiddle around with a broad let a a Vanguard total stock market fund and take away the

companies that might do stuff we find reprehensible. Or maybe American Airlines dumped you from a flight and you feel angry about that. Or you might want to cut out your employer, right because you don't want to have double economic risk or expise working there. Yeah, so that makes perfect sense. But the vast majority of people don't want to fiddle around with this, right, I mean, who likes

doing their taxes? Nobody? I mean, so I can see it as a really useful tool for a lot of financial advisors, but most people are still going to be basically better off and prefer buying broad index fund. So I see this it can easily become a trigging stolar thing. But I do not see it as the truth of indexing three point oh as some people see it, nor as a viable, genuine competitor in size and scale to ETF and some traditional index mutual funds. So there's a

huge trend. They're definitely going to grow, But right now I feel some of the hype around it is probably people are getting a little bit over their skis. Yeah, I can see that that makes some sense. I'm intrigued by it, but I want to get your take, so I only have you for a fine amount of time. Let's jump to some of our favorite questions that we ask all of our guests, starting with tell us what you're streaming these days? Give us your favorite Netflix, Amazon podcast?

What's keeping you entertained during lockdown? Well, I mean, I just had our third child, so I have to meet my sort of entertainment time budget has been a little bit destroyed lately. But during Lockdown, one of my my paying guilty pleasures when I actually did have a little bit of time between work, childcare, and and writing the book, was actually rewatching Buffy, the Vampire Slayer series from my teens. Okay, and I thought it held up really well. It was

quite a lot of fun. Um. So yeah, I still recommend that to people. It's still very it was a nostalgic, guilty pleasure. UM. I recently watched Turning Point, the nine and eleven Netflix documentary, which was excellent. I knew a lot of the history of again, but something sometimes putting it all in one place together in a nice bowl just really worked. I thought that series was really good. UM. I watched the low Key Marble series, which was entertaining. I mean, I've got kids, so I had to get

Disney plus UM. On podcasts, obviously Masters of Business. I hear great things about it. You've got fantastic guests, especially today. But New Bizarre it's a podcast started by two of my former colleagues at the FT. I've listened a few episodes of that. That sounds really promising. I like a lot of the economic podcasts. I tend to be more oppositistic when it comes to the podcast, So when there is a specific topic or guest that I really want to get into, I don't have it on in the background.

It's more for specific reasons. Yeah, and then yes, essentially, yes, I'm constantly entertained by the antics of my children, which never seemed to end that maybe will at some point and obviously start missing it. Then tell us about your mentors. Who are the folks who helped shape your career. I wouldn't mentor is such a big word, and I don't have to downplay their their importance, but maybe, um, who are the influential people who affected you? Yeah, well, let's

say three. So Paul McNamara was my my boss at my financial journalism job covering Islamic finance in the Middle East. He was a very acerbic guy and I loved them to bits, and he gave me my first job and I learned a lot from him, mostly just that sense of that actually enjoying the job because this held a lot of fun. When I joined Bloomberg News, I had a guy called Chris Kirkham was my team leader, and

he was phenomenal. He was also stardly, even more on the on the gruff and grumpy side of the spectrum, but just a phenomenal editor, a really great guy who you know, Bloomberg can be a little bit tough at times, and he knew the right time to yell at you. And they're the right time to sort of take a metaphorical armor on your shoulder. I remember especially one time I made a genuine screw up, like a huge mistake

and it was and he didn't yell and me. He said, look, I think you know you made a mistake, so I'm not going to say anything more. Ground have a drink and expense it and we'll speak tomorrow. And I really appreciated that. And at the FT, my first editor, the guy that had to have beat my copy into FT shape was a guy called James Drummond, again very much on the on the grumpy side of the spectrum, but

he was great. And I've learned from so many people and John authors, Jillian Te, James Macintosh, through phenomenal colleagues too,

of which sadly are with the FT anymore. You know, they've gone to the enemies at Boomberg and the journal Um and just so many people outwhere in the industry, and it is really areas where you can just learn so much from people like Jason's I got the journal right, I mean, a phenomenal journalist still that just churns out stuff that every time I say, I wish I had written that, so I think that's that's my mentors are all the people I read and love their work. Essentially.

That's the key line is when when you see something you say, damn, I wish I wrote that. That's how you know someone's doing really, really good work. Um, let's talk about everybody's favorite question reading. What are some of your favorite books and what are you reading recently? Well, I've got a backlog because of the work related to

my book. Given all the work in that, that that was the one thing that just had to end, like any sort of pleasure reading, But I picked up again The Emperor of All Maladies, book on the history of cancer, came out over a decade ago. My wife had already read it, but I've wanted to read it for a long time, so I finally got around to us reading that. I'm almost done. So I've also started reading The World for Sale, by two former colleagues, history of a busy

commodity trading. It's absolutely fascinating. I'm very angry at Jack Farcie and having a blast for leaving the Ft and joining the evil Bloomberg death Star, but it's a phenomenal books. I'm enjoying that. There are many fifty in really really quite interesting. What sort of advice would you have for a recent college grad who was interested in a career

uh in financial journalism? Who financial journalism is hard? I mean, read a lot, a lot, and maybe develop a niche that that you know really well, because that can help get you your first job. Uh. And you know this is advice that lots of trolls give all journalists on the internet. But you know, learning to code or at least understanding some of those fives is incredibly helpful. The days when journalism used to hoover up so humanities graduates

I think are over. I think the value of a journalism degree is primarily in the piece of paper saying that you are a journalism graduate, but in practice it is pretty minimal compared to the practical experience. I'd rather have somebody who, let's say, studied finance, took an internship at a bank or an investment fund, absolutely hated it, and try to get an internship at the FT or Bloomberg or the journal I think that's far better than having,

you know, studied as I did. Sadly journalism and history and the international relations. It's worked out for me, but it's going to become progressively harder. I think for the next generations of journalists, and I would I mean, this is also well trodden ground, but we desperately need more diversity in journalism. So I joke a lot that I'm

the Norwegian diversity candidate at the FT. We don't. We only have one other journal and Norwegian journalists, but um, we need more people from all walks of life applying and thinking about careersing financial journalism. So if anybody's listening to this and it's mildly curious, then drop me a line. I will jump on the phone our slide with anybody,

because that's something I care quite a lot about. And our final question, what do you know about the world of investing, finance, journalism, indexing, quantitative investing today that you wish you knew when you were first getting started twenty or so years ago. Mm hmm. Well, aside from maybe if I had a time machine I traveled back and tell myself to buy long dated out of money, Apple calls, well, that's a cheap. This isn't a This is less a

time travel question and more a process question. What what what have you incorporated into your process now that would have been helpful to do, you know, years ago. Uh, there are certain things I've always been good at, like taking notes, keeping notes, writing stuff down. There's always been a fairly handy mnemonic tool for me. It helps me remember things that once I've written something down, I remember it pretty well. And I see quite a lot of

people that aren't good at writing stuff down. And if it works electronic, no otherwise do that. But that's not the advice I give to myself. I'd say, and this is very sad and tragic, but very cynical and useful, which somebody told me this, um, and it worked in many professions. But every job is sales. Yeah, it's it's the dirty truth that people don't want to always say. But every job in sales is yet sales. And when

you're young, everybody has this realization. Some people realize it in the mid twenties, some people in their thirties, maybe some people later. But you always think that, you know, good work will always get recognized, and it can. Again, you can be lucky or you can be unlucky. But every job is sales. Um and that is certainly not

something I appreciate for a long time. Um, And yeah, it's It's not the fun, sexy, inspiring piece of advice, but it's probably something that more people could do with Harry. Thanks Robin for being so generous with your time. We have been speaking with Robin Wigglesworth. He is the financial correspondent for The Financial Times and author of Trillions, a

new book on indexing and passive investing. If you enjoy this conversation, well be sure and check out any of the nearly four hundred prior discussions we've had over the past is it seven years? Yes? Since you can find that at Spotify, iTunes, wherever you get your podcasts. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Sign up for my daily reads at Rit Halts dot com. Check out my weekly column at Bloomberg dot com slash Opinion. Follow

me on Twitter at Rit Halts. I would be remiss if I did not thank the craft team that helps with these conversations together each week. My director of research is Michael Batnick, My producer is Harris Wald. My project manager is a tick of Alban I'm Barriers Hubens in into Master's Business on Bloomberg Radio