The Clash of the Cultures: Investment vs. Speculation

[SwedishValue]

[amazonsearch]The Clash of Cultures:  Investment vs. Speculation[/amazonsearch]

 

This book by John C. Bogle had my high expectations after seeing Buffett recommend it alongside The Outsiders in his last letter to shareholders. My short summary of the book would be that it is of no to little use to the intelligent value investor, whereas it should be of some to considerable use to the normal stock market investor.

 

Positive:

The emphasis Bogle has on cost and the effects of compounding costs.

 

Negative:

Pseudo-scientific and long dwellings on Beta as a sound measure of risk.

 

I will not recommend this book to anyone I consider smart with investments.

[Guest longinvestor]

<<Positive:

The emphasis Bogle has on cost and the effects of compounding costs.>>

 

Agree wholeheartedly!

 

This is the overwhelming theme of our times. Just like a piece of iron is sure to corrode away, costs are simply wiping away the vast majority of investment return potential. Bogle has made this the central theme of the Vanguard investment style. Avoid all activity(like frivolous research/analysis) that comes between clients and their wealth. Most of the funds don't follow this, so this makes it important for investors to understand this well before investing. After all, 95% (?) of the funds don't beat the index over the long term. Bogle is alsolutely right.

 

<<I will not recommend this book to anyone I consider smart with investments.>>

Smart can mean many things.

 

Hope it does not mean being a busybody. Especially when you are handling other people's money. Too bad that many investors will find out afterwards that their money was not smartly managed and they paid for it all with their trust and money. The "smart" ones got paid to stay busy on someone else's dime. 

 

The proven smartness is of the Bogle type (and Buffett-types). It highlights for us fiduciary responsibility, something that the investing world is grossly lacking in.

 

Bogle is a must read, the world needs it! In my opinion, we cannot get enough of Bogle.