Inside "The Bogle Effect"

But it did start. Once upon a time, we got in a car and we went to Malvern, Pennsylvania, and we interviewed a legend, Jack Bogel for Trillions, And what came out of that interview actually ended up inspiring you. What what was the part that lit a lightbulb for you to write the book? Uh? I interviewed him two other times before that, but that particular interview, what I

walked away from was how prophetic he was. Remember that's the interview where he said, and I had never heard him say this before, he was predicting that a lot of the large asset managers would mutualize. There would be a mass mutualization of the fund industry, which basically means they'd convert for for from being sort of for profit to the vanguard structure, which nobody has copied since and we'd say, well, why would they do that, Well, they're

going to get that desperate. Why, Well, because nobody's buying their stuff anymore. And he went, you know, he basically traced out what's going to happen twenty thirty years into

the future. And while that wasn't the only thing that interests me after he passed away, that stuck with me of as to like, maybe someone should try to get some of this down on paper, not just the stuff he predicted, but just how impactful because if some of the stuff he predicts comes true, I mean he will have really like completely, like not only reformed the industry, but but I wouldn't say destroyed is not the right word, but seriously shrunk it reformed it um just with just

his with his his sheer will of personality and that Vanguard's structure um. And I think this is I mean, how could you not be fascinated by by this guy and this topic. So that's what that's what inspired me. And it was that an interview in particular. I will say I did find out later that he wrote a book called Stay the Course, which was his last book, and in that book he also talks about the mass mutualization.

So what we got in our interview, by the way, was a lot of the material from what he wrote in his last book, and so I was able to sort of like tie up a lot of after reading that book, our interview in that book, to really nail down what he was trying to say. So the name of the book is The Bogel Effect. If you're hearing this, it is out now. I want you to pre order as many copies as you want. We're gonna get Eric's sales numbers up on Amazon and turn them into a bestseller.

And we're gonna be joined today by Annie Massa, our colleague in Bloomberg News who covers asset managers and e t f s, to talk some about your favorite insights about Jack Bogel, who passed away about a year after we had that interview with him on Trillions, this time on Trillians The Bogel Effect. Annie, welcome back to Trillians. Hi, thanks for having me. Are you going to have Eric autograph your copy at our book party on May five? What the heck? I already have The Bogel Effect with me,

but Eric, you didn't autograph it yet. I'm gonna have to hang you down in the office. Happily. I didn't want to assume I'm not Stephen King. Some people like, why didn't you autograph my book? I'm like, well, I mean, because you know, there's probably be somebody who's like, why did you autograph my book? You're not Stephen King. I don't want to presume it, so but Annie, I'm happy to do it. I will stop by your total. I specifically hunted you out for an advanced copy though, and

drop it off of your desk. I had to ask people around where does Annie sit Actually till I was bugging them, they were mid writing. She said, a bunch of near a bunch of writers, and they were like, I'm there anyway. I found the desk and I put it there. You put it there. And one day I was working from home and someone actually wrote to me and it was like, hey, I saw you have the

Bogel Effect on your desk? Can I borrow it? And I was like, yeah, as long as you give it back to me, it's it's already working its way around the mek Eric. Eric, We're gonna do five hot takes from the Bogel Effect with you and I'm going to start with number one, which was we excerpted this in the latest issue of Bloomberg Business Week, and I want you to talk about how Jack Bogel was actually a punk rocker. Yeah, this is a metaphor. Everybody knows. I

love music. I love my pop culture metaphors, and I don't take this lightly. But Bogel, whenever out here him speak, I'd be like, man, he looks like a latter day Henry Fonda or your grandfather, and you always had like a sweater vest. He just looked very approachable and folksy, but the words dropping out of his mouth were just completely different. Like he'd be on Financial TV basically saying like market timing is is an exercise and futility. Why

would you trade stocks? YadA, YadA? And he would basically, you know, the whole the whole network is designed to see how you can make money by trading stocks. I mean that's just like and so here comes this guy and he would do it. At the e t F conference, he'd say E t F s are awful and rate to an et F crowd. Then he'd go to Morning Star, where there's a lot of active managers, say active manager, you gotta lower your fees. You guys are awful. And

I found that to be kind of punkish. I mean, this is a guy basically, uh, you know, purposely sort of being contrarian in front of an audience. But then, as I dug deep breath, thought the punk rock metaphor was actually even more apropos because I found this interview with Johnny Ramone, who a lot of people think the Ramones started punk rock in seventy four, and if you listen to that first album, it's pretty much the basis of a lot of what came after, including grunge and alternative.

But he said, all we did was take out the stuff from rock music that we didn't like, lose influence, guitar solos, nothing that would get in the way of

the song. And I felt that addition by subtraction was exactly what Bogel spent forty five years doing, removing all the stuff he didn't think that you needed that got in the way of your returns, management fees, turnover, trading costs, brokers, human emotion, and he basically left the world with a three basis point total market index fund, which is completely frictionless exposure to to the whole enchilada. And that's why

I think it's timeless. Just as you listen to blitz creep Bob today, it sounds just the same as it did when you first heard it, or when somebody heard it in n it's it's just because there's no fat, there's no indulgence, there's really nothing that goes bad. And to me, that with that metaphor, I think work well. And then I talked to your colleague Pat at Business we can he added another one, which was punk rock back in the day was known to be sort of

fan owned, and here's Vanguard is customer owned. And so I thought, you know, and so some people are gonna be like, oh, he's crazy for that metaphor, and I I stand by it. I work it out in the book, and I acknowledge that it might seem a little crazy as certain people, But um, I think it's fun and I think it's a it's a fun way to get to some of this stuff because let's face it, mutual funds are is interesting to most people as c spand so I had to like go on Bob and beyond

to try to make this somewhat spicy. And I also really wanted to give um a gen xer's take on Bogel Most of the books UH from. He's obviously a World War Two generation, but most of the books written on Vanguard and Bogeler are written from a much more um, you know, older writer, and I felt I wanted to really freshen him up through my gen x lens. And that's why. Also I took some chances with metaphors. Yeah, that that punk rock metaphor really stuck out to me

in the book. I I love that. That's so, I mean, it really sticks in your head. And I think that there is like an aspect of Bogel where he was so willing to be contrarian. He was so willing to say the things that nobody else would say, and and he didn't mind if people from either side were would get angry with him. But then on the flip side, he's also like a fairly religious person. So it's funny to think think of them against that that backdrop. Yeah,

it's funny. Um Bogel I didn't realize just how much he thought like a sort of revolutionary type guy. But you know, he in his last book, he's eighty nine years old. Um, he writes about taking the pathless traveled. He was more interested in contrarian ideas. He says, I've not I've not done anything in my nine decades but fight. And then one of the last quotes is that Dylan

Thomas quote rage against the Dying of the Light. And you know, you you read his book and you think it's going to be about you know, expense ratios, but there's a lot more in there, and you see this guy really had a fiery spirit right till the end. Okay. Hot take number two I think is the fact that, as you write, and I think it's central part of the book, crux of the book, if you will, the index fund wasn't the thing that made Vanguard vanguard? Was it?

What was it? Yeah? No, I promised in the book that index funds need a Vanguard more than Vanguard needed index funds, simply because index funds would not be anywhere near the big deal they are if they were expensive. They're only a smash hit because they're cheap. And they only started becoming a big hit when they sort of hit the twenty basis point level, but they started off at forty five basis points. But the Vanguard mutual ownership structure was able to take them down a little by

little over forty five years. It took a long time, but once they got to that low level, it just became like the tipping point. But I'm telling you Wall Streets general thing is not to charge anything that cheap, especially to retail. They may chart let an institution get exposure for under twenty basis points because the institution is going to pony so much money. But for retail, um they need to charge a lot. They like to charge

a lot. And even the Wells Fargo Fund and which was the company credited with launching the first one, we had Mac McGowan on the show about a year ago, um that that index fund is still i think forty five basis points and has a five percent load. And that's with Vanguard in the picture. So you imagine no Vanguard and no structure. Index funds probably exists, but they're

probably seventy maybe they're down to fifty basis points. And then there's no way that this becomes a thing because active would not within not is be judged by the benchmark because you could not invest in the benchmark. You're investing in the benchmark plus fifty to a hundred basis points. So that is huge. And if the index fund never existed, Vanguard's active mutual fund business, in my opinion, would be

six times bigger than anybody else. They're already the third biggest, and that's with Bogel dumping on them constantly, well, I should say dumping on active constantly. And if he had supported those active funds, they're all cheaper than the average, they would be bringing a gun to a knife fight in every occasion, and I think they would be huge. So also, the mutual ownership structure is now headed to wealth management and it's charging a fraction of the feet.

So in other words, the lack of profit motive is really the innovation here. Whatever it touches, it's gonna wreak havoc on index funds. Happened to be the first thing that it picked, and boy, wasn't a match made in heaven. But the index fund, in my opinion, gets way too much credit for the index fund revolution, if that makes sense,

That makes total sense. And I even mentioned I think when you look out across the industry at Vanguard's biggest competitors, the Fidelities, the black Rocks, those companies are either publicly traded or privately held, and the the original goal at least is never just how can we save money for investors? But at Vanguard it was, and that was that was

a huge innovation. And now you look at marketing materials from other companies and they'll specifically name check Vanguard and say, oh, this fund cheaper even than Vanguard, because they know that they have to show investors that they're keeping up with

Vanguard prices. And this is really what we used to call, or I called the Vanguard effect, and I've used that term a lot in my writing, and I riffed off of that phrase with the Bogel Effect, simply because I think the book really centers on him, and I feel like his character it was so unique, like the structure was unique, that they the two of them were powerful combo.

But I agree with you. What also attracted me to this was just how how much of the flows are dictated by Vanguard, even if they're not going into Vanguard funds. It's astonishing. It's basically all the money in America pretty much goes to Vanguard or people who copy their low fee index funds. So in a way, the whole industry is now governed by the mutual ownership structure, even if

they aren't mutually owned themselves. And it's really it's just crazy the numbers, and it's funny, and we get so wrapped up in meme stocks and um, you know, theme funds and all the amount of money even crypto, The amount of money that goes into Vanguard every day just dwarfs all of that. Okay, Hot take number three Eric could have been an alternate headline that I played with for the excerpt in in Bloomberg business Week, which is how Jack Bogel made Cathy Wood. That is crazy to me. Yeah,

it's it's highly ironic. There's a whole chapter dedicated is because obviously think Vanguard Bogie. You think index funds and e t f s and costs coming down, and we cover all that for sure, but the rise of Vanguard and Passive has is completely reforming. Active Active is not dying,

but it's evolving. And really what's going on, ironically, is the more the core of the portfolio is filled with cheap index funds for most people, the more they're going to seek something completely opposite to add on top of it, because they don't need the SP five stocks with some small bets around it, which is what Legacy Active does because they already own all those stocks. So cathy Wood comes along and she's like, I'm going to buy all

of these really futuristic stocks. I'm gonna have Active Share versus the SMP five hundred, which means only one percent overlap in their portfolios. And I'm gonna give you a chance at some serious upside like a call option, and that sells, and it sells because it practically fits into a portfolio. I think this also benefits crypto. I think

it benefits thematic investing. Basically, people are going to stomach volatility much better because it's just this little satellite position and they already have all the fundamentally sound serious investor

stocks and bonds covered for for basis points. And even further is I think active share, or how different you are from the benchmark, is going to replace alpha as the main driver for flows for Active which I know is something It's some people don't want to hear that, but I think that's where it's going because people are just seeking out something different, and it explains the durability of cathy Wood's assets and thematic etf assets and I

think crypto to a degree. But um, this was part of the chapter where I explained why Legacy Active failed or is failing and seeing outflows, but why this new crop of Active is popping up and has a real spot in the Van Guardian future. That said, it's a little bit like Kevin Bacon's acting career started as the star of the movies and if you notice, over his career shifted to more of a supporting role, and I think Active will have to do the same. What do

you think Vogel would make of that. I feel like he would hate to hear that. In any way his legacy has gone to like, you know, bolstering arc or or crypto. You know, he would not have liked it. So Bogel was a Puritan, almost Jesus esque in his ability to not take the bait anywhere, but not not everybody's built like him. You know, they can buy into what he's saying. But also I want to have a little fun. You know, people generally like to speculate. He

would say, you don't need it. One time I was an interview with him and I said, remember we had smart beta and stuff, And I would say, well, um, I think I used an example of an industry t

F semiconductors. I said, let's say you are you think semiconductors are a great business, but there's not a lot of semi stocks in the SP five yet, what about buying a semiconductor e TF And his answer was, well, then you're speculating, and anybody who speculates it is a damn fool, you know, in his very like World War two language, and that that's a tone when I interviewed him, and I kept challenging him with these well what if what if I felt like the box that sends out

the skeets and he was the skeet shooter, just blowing each one boom boom boom. There was really nothing that he didn't shoot down because at the end of his life he was just that all you need is the total market fund. But people are are not wired like him. They're not maybe as strong or pure. And I think I don't think I think he would understand it. I

just don't think he would agree with it. But this is just the reality I'm trying to capture, and that's all I want to do is be right and help people have a guide for the future, and I think

there's something to this. But I would also say if I if I met with him again now, I would say, what about this though, What if the ten to twenty that people use to have fun and is exciting and has a lot of upside volatility and they speculate, what if that has a behavioral benefit of keeping them distracted so they don't touch that needs forty years to grow to have maxim maximum potential and the compounding to kick in. I still think he would shoot that down. But it's

a pretty good point, you have to admit. I think I think he would say probably probably world War two. Wouldn't stop bringing it up though. Okay, so hot take number four relates to behavior, right, yeah, and this is another. So there's all these books on behavior and psychology and the importance of evidence and behavior and it's great, and there's a whole renaissance in the advisory world. They're saying that behavior is now our main value add and that's great.

You have to hang in there, even if it's better to actually hang in there with an act of fund probably than trade index funds. That the point is, you you know, not selling when the market's getting scary and maybe not buying at the top. People did that in the past, and that behavioral gap became a real problem

for investors. But just introducing the index fund at three basis points, in my opinion, completely changed behavior for the better because people who people who are buying index fund in their core are resigned to the fact there's nothing better they can get, so when the market goes down, they don't think themselves, well, my index fund is underperform warming, let me hop to a better performing fund the way they used to in the nineties with active They're just like, well,

I own the whole market for three basis points. Where where else am I gonna go? This is such a good deal, I'm gonna just hold it, And so they that resignation is much easier if a three basis point index fund exists, and it doesn't get brought up in

the books a lot. It's a lot about mentally keeping yourself, and there is some of that, but just introducing that tool, I think may behavior a hell of a lot easier and gets it doesn't get enough credit um in my opinion, because I have a chapter called the Art of doing Nothing and how doing nothing is hard. It's an action almost and you know, you've got the media and robin Hood and commission free and a lot of things are

trying to entice you to trade your own brain. But a cheap index fun I think, really makes it easy um and doesn't really get brought up that much in some of the other works around behavior. It's kind of a funny twist though, now because host Vogel Vanguard is pushing so hard into the advice business, so seemingly they're

also staking their future. Besides obviously they're a huge index fund franchise, they're also staking their future on the ability to convince customers that advice is useful, right, Yeah, And Vanguard wrote a controversial advisor's Alpha and they said it's worth two to three percent a year having an advisor. I asked Vogel about advisors, and what he said was, look, if an advisor is moving you from this active fund to that active fund and trying to pick stuff for you, bad.

But if they're providing behavioral coaching and they're planning for you and doing tax management, that's probably good. And if they're using very low cost investments and not turning the portfolio over um, then they're probably worth something. So he was mixed on it, but it's a good point that you bring up. I would almost bring up that that Vanguard is in some ways sometimes pushing active a little more lately. Although Bogel was never antiactive, he was more

anti greedy, expensive gravy train active. I think he thought they should have shared economies of scale a little more gotten, cheaper, and they would have served investors better. But um, Vanguard and Bogel have a gap, forming to your point, Annie, and that is a ch a chapter called Bogel Versus Vanguard, and I explore that gap. I do think the Bogel heads get a little too crazed about some of the

things Vanguard does. But I do think Vanguard is also oddly shunning Bogel's legacy a little bit lately, and I think they're both. I think for the Bogel Heads, most of the money still goes to Bogelian funds like v O O and v T I. They're very bogel Ish. That's where the ball blob of money really goes. Maybe at the edges there's some stuff that isn't Bogel that, or there's some cash flowing, but the main stuff still there. And for the Vanguard the company. I would say, embrace

Bogel as much as you can. He was really great. I mean, it would be like work. If I worked at Apple, I'd be like, hell, yeah, I work at the company Steve Jobs created. This guy was great. Let's talk to Jobs. Um. I just I would I would just think that way. I work for Bloomberg. I'm fine. I think Bloomberg's innovative guy would be happy. I'm proud of that. I just don't get the sort of veering off of of the Bogel DNA in the way they have lately. So I do think they're closer than people think.

But there is a gap forming between the Bogel heads and the Vanguard crowd a little bit, and you can you can see it on social media, and you literally just wrote about the tension between the Bogel heads and Vanguard, right, that's right. I wrote this story about how there, to Eric's point, how there has become a bit of a

gap between Vanguard as it is now and Bogel. And it's interesting because I think that if you look at the competitive landscape, it's so rare that any company, to say nothing of a financial services company, has a founder that inspires the kind of almost religious zeal And like fanaticism that Bogel does. And people are still so excited

about Bogel and how he shaped investing principles. And the Bogol has this online community of real Vanguard adherents who are investors in the funds, who who post and share uh ideas about investing, but also everything online. Um, they've I think they've become a little bit frustrated with Vanguard in some respects recently over over things that they feel Bogel never would have let happen. One big recurring theme and and Eric, I know you um go into this

in your book as well, is customer service. Some some Bogol heads that I spoke to for the story mentioned that they feel that there's been a decline in customer service over time. Of course, Vanguard's a company that keeps its costs low, as we know, but asset management is moving in a direction where you need to spend more and more money on things like customer service and technology, and and some of them have felt that Van Guard has left those principles behind a little bit. Yeah, Annie,

it's really interesting to bring that up. I there's a chapter called quote some worry in the book where I go over all these worries of passive and most of them I think are hogwash, um, largely driven by active managers who were a little jealous, or academics who just really overthink things. I think at the end of the day, a lot of money is just moved from you know, an active fund that holds Apple, Google, and Microsoft to a cheaper index fund that owns the same stock. That's

not a big deal, um. But to your point, as I went down into some of the worries of passive, one of the ones I got to his customer service because if you don't charge anything, who will answer the phone? This is honestly part of what the pushback on bitcoin and DeFi has been. If you go completely off the system, like who's gonna who can you call if you need help? And this is a that's one of the biggest anti

DEFY arguments I've heard. Vogel was kind of like had the same ethos as Defy in my opinion, um, you know o g kind of style but not the same, but similar. And there were even people interviewed who were fans of Bogel. Uh, they privately told me they had problems, you know, getting through. They had recommended Vanguard to some relatives and the relatives frustrated on the call lines taking

too long. Also, if you go to the bogel Head site, they even have people crying out there that it's a problem. So if the bogel Head site is saying that, then you know you have an issue. And I also went to yelp dot com where Vanguard gets a one point five stars at a five. You know what else? You know what else gets one point five stars the Walmart on Columbus Boulevard, which if one one user described as the seventh circle of hell. Um. So if if you're the same as the Walmart in Philly, you need to

address that. And Vanguard, I think is too good to and have worked too hard to have a reputation that is really stellar to let this drag them down. So you know, my I think they should do is take some of them more. Instead of the profits going to lowering fees they're already like basically nothing, you know, continue

to use those to help customer service. I think their investors okay paying five instead of four or four instead of three, Um, if they have better customer service, because you're already at your cheap levels, UM, but bogel Um, this is part of what possibly could bring down Vanguard. UM. Is this customer service thing at least or at least

harm them. One person I spoke with, Aaron arvin Land, the Philippine inquirer who's covered Vanguard locally, UM said that was their achilles heel and a couple of people so the same thing. They said. They're dealing with it better, but that's something UM that possibly could slower their growth.

One sort of conspiracy theory I've heard to that point is, uh, the idea that Vanguard almost doesn't care, like they're like, let people buy Vanguard funds from Fidelity, like in Fidelity accounts, no problem, We'll just keep the cost slow here and leave the customer service to what you know, choose your platform. There are plenty of places to buy Vanguard funds, so that's not you know, that's just kind of a conspiracy

theory that's out there. But advisors I spoke to you have said, We've seen people say I'm fed up with the direct from Vanguard customer service. I love the funds and I still want to be in the funds, but I just go to some other brokerage to buy them. Yeah,

and it's funny you say that. I've also heard a conspiracy theory to that point, that that's why they're subtly making the e t F share class a little cheaper so people migrate into that share which then put them over other brokers and away from the Vanguard sort of mutual fund family. And I mean, honestly, they didn't start doing that until after Bogill passed away, and I'm sure he wouldn't have loved it, given he had some complicated feelings with E t S. Okay, hot take number five.

There are many more hot takes in the book. Bogel's dream is far from realized. That's a little crazy to me. I mean, of us funds are Vanguard, and that's not good enough. Eric. What's the number gonna be? How big does Vanguard have to get before his dream is realized? Yeah? You know when we when I wrote the E t F book six years ago, that's how you and I actually met. I discovered something in my research that just

blew me away, excited me and made me um. You know, it was one of those moments when you when you go into a research project that you need to give you energy and inspiration, and that in our case was that the SEC helped invent the E t F. I did not know that from all the books I read. In this case, that thing in this research was this sentence that was buried in one of Bogel's books that hardly anybody read, called Character Counts, which is just his

speeches to the crew. He says this, The first sign that Vanguard's mission has created a better world for the investor will be when our market share begins to erode. Can someone out there find me another example of where the CEO told the crew and the staff like, I want our market share to a road. I mean, I just not just asset management, Let's try all of business. I just has that ever happened? It really hits to

the different trip he was on. But he said this in when Vanguard had less than one percent of the assets they had today. That's how far into the future he could see. He saw Vanguard getting big and it was starting to coin draction in ninety one. That was about sixteen seventeen years after it started. And now we're in a world where their market share is growing and

growing and growing. It's not quite thirty pc, but it's it's over a quarter and it's quickly going there though, and I think it might hit fort before there's any erosion. And what Bogel said that for were was because he knows that the only way to stop Vanguard is to get cheap like them. Get He liked the word stewardship fiduciary.

He would force everyone else sort of kicking and screaming to his level or Vanguard's level, and at that point, possibly the Vanguard's market share would would begin to top off and then a road And the problem with that vision for asset managers it means you're selling stuff that makes you no money. So it's almost as if he envisioned a utopia for investors, but is a total healthscape for the asset management industry. And this will take twenty

years to play out. But again, that's why I said, this book is as much about the past and the president as is about the future. But that is again and he said it in and the whole things it blew my mind helped me kind of really cement the fact this guy was just marching to a beat of a different drummer and excited me to sort of finish off this book and have his name in the title. I struggled with titles, but I was like, I think Bogel should be in the title. I think he should

be put forth front and center. I put Vanguard in the subtitle. But anyway, so that's I think. Another sort of hot take from the book is Bogel's dream hasn't even quote begun, not even begun to be realized, based on what he said, and he thought that way all the way up until the end of his life. Another kind of surprising thing he said in his final years was he mentioned this whole debate over UH over common ownership and how index fund firms like Vandguard and Blackrock

have become such huge shareholders in corporate America. It causes these weird distortions, and it I think it shows to your point on on that speech that he was willing to think through I think way ahead about how something he created could have of unintended consequences, um and and he just saw so far out into the future and and was willing to be open about it in a way that I think it's pretty rare for any kind of person in a position of leadership, certainly in corporate

America to be. It's also, um, you know, this was the nineties. This is just as the nineties economy was starting. It's interesting to me going back to that one book, Character Counts, which while it was one of his lesser selling books, is really interesting because you get to see Bogel speaking in the in the eighties and in the nineties, and you know, I'm old enough to remember those decades,

especially the eighties. There's a speech he gives in at the Christmas party and that's when the movie Wall Street came out where Gordon Gecko is out there saying greed is good, and Oliver Stone said he did it as a warning movie, but it inspired all these traders to go in and try to make a ton of money on Wall Street at the same time, within the month basically the movie that audiences are watching that speech, Bogel is talking to the to the crew about like, well,

if we can, you're gonna keep lowering fees a little bit, we'll be on the right tracks, stay the course, YadA, YadA. It sounded exactly like the way he spoke in and that is interesting to me is how laser focused he could be despite the culture and the times changing and seven. Nobody was asking for cheap They didn't. It just wasn't a big deal in the nineties, they weren't. Um. That's again that the serious vision by him. That was fun

to deconstruct for sure. Okay, Eric, congrats again on the book. Um, although we failed to mention my favorite quote in the book, which you got to speak to Michael Lewis, What did

Michael Lewis have to say about Jack Bogel? Yeah. I was really curious what Michael Lewis thought of Bogel, because Michael Lewis seems like a very curious guy, and he's going to all these interesting corners of the financial world, and I thought, you know, I wonder why he's never written about Vanguard, and also read he had vest in Vanguard, and so I sort of asked them, you know, I asked then interview him and he said yes, and we talked for about half an hour, and over the interview,

I think he started to see what I saw. Um, And I won't go into details, but one of the things he asked, he goes, you know, um, he was shocked that indexing took so long to take off, because when he read when he first read A Random Walk down Wall Street by Bert Malkiel in the eighties. He thought, why isn't everybody doing this so obvious? Um, So he

was really interested in that aspect. So I explored why it took so long heavily in the book, because I'm like, if Michael Lewis thinks that's interesting, I should probably hang there for a little bit. Um. But then he said, um, he started to get It's funny. Michael Lewis started asking me questions halfway through the interview, and he says, like, how much money did Bogel have when he died? And

I said eighty million? And he about fell off his cherry, said, I thought you were going to say two billion, and even then I would have thought, wow, he really left a lot on the table. And then he said this, which is very eloquent. He could, he commented, are trillions of dollar or and he only made a few million for himself. In the history of Wall Street, the ratio of money touched the money taken was never so high, which I almost put that on the cover because I

thought that really captured it. Um. But again I didn't want it to be so much about Bogel, the sort of like saintly guy who took less money because let's face at eighty millions and most people still a ton. And people close to him back in the seventies said that he was well paid. He never he always had a nice house. He just didn't go crazy with the billionaire thing. He just kept a nice, upper middle class sort of existence. Um. He just didn't need more. And

one of his books is called enough Even. But I did find one thing he did need a lot of, and that was adulation. You know, he could never get enough praise. And that was something his son talked about. And in the chapter on explaining Bogel, I talked about his ego and some of his deficits. But um, I think that made a miscast for Wall Street. Most people who want agilation make go in the arts of the priesthood. Um,

he's being able to do a mutual of fun management. Um. And but it actually worked out well to have somebody who was arguably miscast in this industry, as it really helped, I think, move the industry towards a better, more fiduciary place. Eric, congrats again on the Bogel effect any thanks too much for joining us on trillion. Thanks thanks for listening to Trillions until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify, and Warber.

Else you'd like to listen. We'd love to hear from you. We're on Twitter. I'm at Joel Webber Show. He's at Eric Faltunas. This episode of Trillions was produced by Magneth Hendrickson. Francesca Leave is the head of Bloomberg podcast by