 So, I won't bother introducing myself, I'm going to be pouring it out. The first thing I want to say is very, very important thing. We wouldn't be together if we weren't for Taylor Lamar. He's not here with us. I don't know if he's going to tune in or whether Rich will get him on one of those videos. But, Taylor, we wish you the best. We constantly hope you'll be able to get yourself together and get back here another year. But, a lot of what I'm saying is dedicated to you and the inspiration that you gave me. That said, I want to start off by saying we're talking a little bit about books. I was with the great Bill Bernstein, Dr. Bernstein, here this morning. And he did something that was kind of mean-spirited. The book, Bogle on Mutual Funds, has been the number one book on Amazon. Since the day it was published seven and a half years ago. And it continues to be the number one book today. It's amazing. I don't know. Any other book in any category has that sustained kind of leadership for seven and a half going on in eight years. Applause. So, that's common sense. It's a little book, but that's the one that does it. Well, that's number two, by the way. So, if Amazon is a good guy, I think it's as good as any. A lot of volume comes out in there. Probably 40% of the books sold in America may be 50. That's a pretty good test. Obviously, I'm pleased with that. But Bill, darn him, brings out a book on retirement. Are you ready? I think it's called. It's a great book. It's a short book. He gives it away. He's number one. I don't do that to me. There's not a mini-vanguard there, man. Cutting costs all over the place. But in any event, I think everybody exists now. It owns Bill's book. So, I can come back to number one again. I do want to concede that on the mutual fund list at Amazon, he is not in the same genre as, say, 50 shades of gray. Now you should have read that. You must know what's in it when you're laughing. But in any event, it's been great to see those books do so well. And there are three of my books that I most wish for, books on Amazon. And still selling them. I think it ranked in all books. Honestly, not number one. But maybe number 2,500 or 3,000. And they have, I think it's 5 million books selling on Amazon. So, it's pretty good. And it's an awful lot of fun to have done that. And to have it work out so very well with the acceptance of share holders. There are two more books coming out, even though I promised my wife. And I probably told you earlier, we're writing more. These aren't real books, but we're going to give you, and do it with your loyalty to being here, that we're going to give you copies of each of them. And when they're out there, we don't want to have them now. We should all be reading them. And then I want us a very short, more of an ad book and a book. Well, The Man in the Arena. And it's the transcript of a follow-up to the Legacy Forum. They had the May 60-year Legacy Party. They had it for me at the Museum of Finance in New York. And we had four really distinguished people who took the day off. And basically, they come to New York and talk about me. It seems kind of amazing to me. I'm sure it seems kind of amazing to you. But with Alan Blinder, professor from Princeton, the Economic Studies, Center for Economic Policy Studies, professor there for many years, and former head of the Vice Chairman of the Federal Reserve Board, frequent contributor to the Wall Street Journal, regular contributor to the Wall Street Journal. We had Cliff Asnass, a hedge fund manager, probably the biggest group of hedge funds in America, who had a double-sided story. He tells this story in The Man in the Arena in this transcript. He says he has a license plate on his car that says WWJD. And someone says, wait a minute, Cliff, aren't you like Jewish? What is the Buddhist Jesus doing there? And he says, no, it's not Jesus. It's what would Jack do? He's got a great sense of humor. The third one was Jim Grant, the editor of Grant's interest rate observer. A brilliant writer, not just about financial stuff, but many other things. He's got a biography of John Adams, a biography of the Speaker of the House many, many years ago. And he was there, and his thing was about Bizarro, oh, and you all, are you familiar with Bizarro? Anybody here? Bizarro is the anti-superman. They used to talk about him as Seinfeld, and I had never watched Seinfeld, but he's the exact opposite of who he's supposed to be. So Jim Grant's things will riff on me and being following a different career for different reasons. And my career is such that my son, besides my career as a hedge fund manager, Bizarro, the opposite of what I do, and it was superseded. My son then thought, you know, that's not the right way to run a business. So my son started the first index fund. And his last line was something like, whatever the case, it's all about the money. And the final one was Dick Silla, a professor of finance and basic corporate history at NYU. And he compared me with I hate to tell you this, but it's silly, but it's nice with Alexander Hamilton. And I think I came off well with the comparison. But that's the man of the arena. And then it was like this. And thanks to Mike Nolan and wonderful assistant who's here somewhere over there. We self-published, you know, selfies. Well, this is a selfie. I just decided to put this between the covers of the article I have in the New Journal of Portfolio Management called Lightning Strikes. This remarkable coincidence of in two weeks in late September, early October of 1974 starting Vanguard Paul Samuelson's article, the very first edition 40 years ago of Journal of Portfolio Management saying would somebody please start the index fund and the bottom of the bear market. Well, that happened very quickly at the stage for this new company. So that is in there. In terms of I've also written 13 essays I printed them also in here and so you can read what I've chosen. And then two over-voted, the most outstanding articles the outstanding articles of JPM, two particular years and if you get that awesome a treat you're asked to write a retrospective five years later essentially. How the idea is of one of these prizes. And one, interestingly enough the very JPM is a very, very quantitative magazine and yet, Alolo's 13 articles, really 12 because this one hadn't been reviewed yet of a new one, Lightning Strikes all these quants were the ones who knew the subscribers of JPM. They were the ones who picked by least quantitative works of good, one was called so he knew no man can serve two masters and the other one was called you get what you pay for or something. Oh, there's an idea so important that you can't think about anything else and that was the title of it and for that of course the financial system and then without a lot of big data in there and a lot of complicated formulas those were selected and then I printed also the sandals of the original article and one more nice letter from Paul Sandress and that's about it that's in the book and that looks like this and I thought you'd be interested in the dedication which I thought about doing a little bit later just for the last minute and I think I'll read this for a little while I've often said ideas are a diamond dozen but implementation is everything well this book is focused on the ideas that inspired the creation both they ignored the index this dedication honors those quote, honest to God down to earth human beings you've heard that expression before who implemented those disruptive innovations and those who inspire our crew to keep in place their clients and transfers so a hearty salute to those who serve in our Vanguard crew those who are responsible for the alright well thankless task of getting a day's work done extraordinarily nice people who do their work with the world who are finding values and care holders and a second hearty salute to those whom we at Vanguard as trustees and fiduciaries are pledged to serve placing their interests first and foremost so 20 million families who have entrusted their wealth to our care we teach them as well as learn from them notably from 30,000 mobile names the core of one of the most active financial websites in the land that's the dedication so it's to you to adapt to really your own self-published and therefore instead of taking six months when should you get this to the threat for Mike's Friday this is a great country or what just sort from Taylor can I interrupt and just read the message from Taylor it says, dear male in March 2000 you and I organized the first poll we had conference in Miami condominium where Mr. Bogo honored us with his presence we never imagined that 14 years later you would be sharing the conference approximately 10 times larger and force the limited attendance participated in Jack's noble crusade to give ordinary investors a fair shape that brought beauty and enrichment to our lives I am sure it will do the same for every Bogo head who has made the journey to this year's conference I send my affection to each of you and especially to my dear friend and mentor Jack Bogo Simon Taylor that's a very nice response so what I'm going to do is talk a little bit about the personal side of things a little bit about being in arts history and I want to do that first because point deck and slides may run a little long and that may take a short shred although those slides will be available if anybody here wants them maybe take two or three hours together three or something like that but the title I picked was entitled for Walbert together human beings and algorithms vangoras as vangoras three first year beginnings so going back to the beginning the title of the introduction really drawing heavily from the introduction to the Bogo head was entitled it was the best of times it was the worst of times it was a good idea to throw dickens in there and so as September 1974 drew a close in October began it was a gratuitous moment in financial history that was taking place a new star not in the big star sense but just one more entry in the universe entered the mutual fund department a company that just came into existence incorporated that September 24, 1974 it had a unique you know this truly mutual structure owned by its fund shareholders and operated on that on this basis and it was called of course vangoras a week later on October 1st the first issue of the journal of portfolio management was published on a leadership of founding of Peter Bernstein one of the major papers in that issue was entitled challenge to judgment by professor Paul Samuels of MIT America's first Nobel laureate in economic science you could find no root evidence as he called it that any mutual fund manager consistently earned returns that separated the surpassed the returns of the unmanaged as the p500 and basically demanded somebody somewhere starting the next one in retrospect his essay powerfully echoed in the early 1951 rudimentary statistical research of my Princeton thesis that reached a similar conclusion and I'd witnessed further much more important than that my own personal experience had witnessed I'd witnessed firsthand the abject even catastrophic failure of the new greater professional fund managers following laps of the go-go era back in the mid 1960s a terrible chapter in this industry's history together his inspiration and my experience with his being Dr. Samuels shaped my decision to create the first world's first index it would be a logical basis for investment strategy that follows from and would be fully consistent with Van Gogh's business structure strategy follows structure as I said so many times just consistent October 3rd the 3rd fortuitous event took place long since counterintuitive the end of a long hour with Van Fairmark at 50% decline and early 1973 high very few managers anticipated that decline and many funds declined a lot more than that 50% the fund industry had failed the investors who had trusted the money managers and fund assets would decline almost fatally like 40% 53 billion to 31 billion and only bailed out later on by the money market business an amazing story so in that two weeks along for a new structure a new strategy for a failed industry with a hand amazing time for bleak yes the opportunity was deeply hidden and if some people totally invisible and yes the industry was in crisis the rest is history recounted in the essays that were in this book here the new editing managed 1.4 billion of other people's money OPM in October 74 and in 4 decades later in October 14, 2014 it's now 3 trillion dollars of other people's money the largest one in across the world and more than a trillion dollars in order and it's the closest peer the financial analyst journal is also celebrating of course it's 48th anniversary they've published 13 of my papers and I republished them all of this in anthology and it turns out I think this is a brief year there's three very different phases of focus in these papers the first day is 1990-1994 establishing reasonable expectations for stock market returns in the coming decade we continue to use that to this day it's proved to be pretty good and dividend yield initial dividend yield plus subsequent earnings growth plus or minus short term speculative return as market values change PEs go up and down looking together and they get the total return on the market second day is 1992 of 2002 I didn't plan it and the papers I wrote during that period focused on the investment performance of actively managed mutual funds compared to passively managed index funds and I guess I was getting a little more confident about the index fund and here I focused on the relationship with returns and risks in the power of the rule played by all these costs then in the third phase when I was entering the phase the focus of my interest shifted again but you're sharply away from data on stock market returns on mutual funds returns to the counterproductive structure of the mutual fund industry in particular and in general to the appropriate role of the U.S. financial system in modern society I wrote four hit papers on these matters of my learning strike I think I mentioned them two of them became quite popular why did I change why did I change my focus I don't know the answer to that of course as I say in the book it's perhaps my growing idealism is still unshakable and certainly it must have helped that I was now free from the rights and responsibilities of running Vanguard and my readiness as always even eagerness to speak out myself created Bowie Puppet and if this talk is too so ecistic a realization that I didn't do it there were few in any other to take up cudgels of reform Lord knows there is much room for reform in our system our nation's underfunded retirement plans our industry's bay would give individual investors a fair shake the conflicts of interest that permeate the appropriate regulation legislation for financials the reluctance of our money manager 18th that's what they are who collectively hold voting control and 70% of all of America's corporations the stock of all of America's corporations to use that coward in dealing with among other unpleasant issues excessive of that consecutive compensation loose accounting practices and undisclosed political contributions each issue reflecting the need for a federal standard fiduciary duty all those responsible for whole PM and in short there's enough work to demand that I continue to speak out at Bowie Puppet for the next two decades or three or four and I don't usually look bad and I don't think most financial writers do and that might worse in retrospect but because two of these won the financial best best article awards from JPM they asked you to do this five years later after you've written your article take a look at what it looks like every five years these winners are asked to present a retrospect on their winning papers and this little document published every five years and so so I did that speeches that I wrote outstanding articles in 2008 and again in 2009 now that first retrospective early in 2009 was on a 2008 paper as the time fell so I didn't really have a lot of time to think about it a question so important I finally got it right here that it should be hard to think about anything else was included in the five year cycle 2008 only a year before I was asked to write this essay about counterproductive support counterproductive actions or financial intermediaries it had already within a year very broad I'm not sure it was so inspired but I made it happen almost immediately a major article in the New York Times an essay by Simon Johnson National Monetary Fund and Buttonwood the incisive columnist of the Economist of London and that's all terrific people adopting this idea of the role of our financial system and subtracting value the more returns investors get and on the other hand I concluded in that retrospective and expressing my pleasure the escalating rent seeking even rent gouging by our financial intermediaries never wanted to waste an adjective have been recognized initiating as I wrote the title of course in 1998 whose time had come and you see this in the documents I'll show you later on not enough but it's beginning in 2014 just this year I was asked to write another retrospective of my award-winning 2009 essay the fiduciary principle a man concerted two masters here the tables were turned because I had fully five years to consider the impact of the library and in retrospect what I liked about that paper was the most naked presentation of my native idealism that I've ever dared to write focuses as well as the need for integrity principle and ethical responsibility and finance in a phrase fiduciary duty and particularly I was proud I hope it's okay to be proud of my sight and similar wisdom some of the greatest men in financial history Adam Smith can't beat that John Maynard Keynes Ben Graham and of course U.S. Supreme Court Justice Harlem Bistone his 1934 essay the public influence of the war provided both the inspiration yes as he wrote in that essay writing 1934 there is nothing more vital in our own day than those who act as fiduciaries should be held to both standards of sprupulous fidelity which our society has the right to demand as it does that was true in 1934 it was true in 2009 when I wrote that article it is still true in 2014 and it will be true forever and more now there's a lot more in here I guess I could say there has been yet another shift partial shift because I had a busy day and I'm trying to do a lot done and I do want to say thanks to Michael who is unbelievable helped me Michael and me and Emily and she'll be here later you won't know her Maggie Wences I think that's the right word look it up and the three of us plus Sarah and I cranked out this huge amount of work so I'd like to publicly express my thanks to you Michael for doing such a fantastic job he's been to a vanguard around 13 or 14 years and I couldn't do it without him a lot about it Kevin is out here somewhere my long lasting probably long suffering here Kevin somewhere back there yeah there's Kevin a lot about him I couldn't tell him about him in those days so these guys have really made my life a lot more fun a lot more enjoyable in there unbelievable in there they're playing a computer like Pat Aruzki I just couldn't do anything without him really so another shift and I'm spending a lot of time with our crew and my new crew teams we'll come in and be we'll bring an extra chair a big we'll come in and just talk in the last few days and you know one day it's ten crew members the longest serving of them had been here since 19 2013 the longest serving to ask for a meeting with me and then I did one luncheon with five ladies who have been there for an average of 26 years the group that works together and they're all enjoyable and they can talk about anything they want and I talked to the teams I talked to the entire parties when I'm asked and the same thing is true with the work of excellence winners I talked for an hour and a half each of them and I talked to anniversaries someone in the 20th of that and I always say I'm getting invited I will come if the coast is clear you know what I mean we've got to get in their way but I usually don't know what that's saying I know what you mean yes the coast is clear so I show up and I want to waste a lot of time but the human side of business has become so important to me as this company gets bigger and bigger I'm going to talk a little bit about that now but two recent women who are really amazingly interesting totally different one was a 25 year anniversary along with it Maynard was going to retire after 20 years with us they were on the night shift they were the tech guys that keep our machine reworking all night a thankless job but great people I got up there made that long walk to the back and a long walk around a long corridor and there were these 25 people and it looked like the united nations old young black white but you know everything was male and it was a great great evening in which they said I haven't had this many pictures taken since my wedding including the now popular selpies I may seem to love to do the selpies and it was just a wonderful evening and I got a note back from the retiree saying no big shot no big shot from maynard has ever come to see us and I think that's awful and I was happy to fill the gap and to make the more than happy ecstatic and particularly this is a little sidebar which increases my weight because it's not like me to be going late I have time when I'm supposed to arrive over in the afternoon or around 4.30 and resting a little bit sometimes even taking a nap and she doesn't want me working so hard and she doesn't want me working at night she doesn't want me not being there for dinner she's right by the way in old camps and she said what a great thing to do she understood the difference between a lot of other things I could be doing dinner for big shots like that which I just don't do anymore and the other one was for a 20-26 year retiree who just wanted to have a couple of people stop by she had three pizza pies and we were all going to have just a bite of pizza she didn't want a celebration and wanted me to come so of course will be I showed up and there are two people who are sitting around having a pizza pie, she was a lovely woman and she said something that broke my heart you made it possible for me to retire early with her retirement plan and I said boy that's a mixed emotion so I'm getting rid of you because I we're losing you but we made it easy to leave that's what we call a paradox and so I started to talk a little bit about these things I often tease them by telling them I used to speak at every billion dollar advance we made in every 10 billion and I said Susan I know you'll remember some of these speeches and it's amazing the speeches all those years ago I'm not embarrassed about it all it's a great consistency of theme and I just read a couple of things out of the books and kid around about a little thing in her case she came to us when her assets were 45 billion so I thank her for the remaining 2 trillion and I started to talk and I guess I had kind of a loud voice and this was just like cubicles of people answering the phone and that kind of thing and the next thing I look around like 5 minutes into my talk it's very very informal it's like a flash mob there must have been 120 people I had this thing happen you just can't have better days than I have people that do all the hard work so I remind you give me a chance to remind of our corporate values our corporate structure our corporate history and I try to explain to them the story of paying for it I want to know how hard it was at the beginning we got a trillion for a billion I still can't get it right a billion for our assets at the beginning and our shareholders were so impressed that we got a $400 billion for the first 3 years there's a lot of confidence for you I've capped off my article Forbes magazine talking about the new separate organizations in Wellington, Bangor and with the title we'll know it's right out of Romeo and Juliet we'll plague on both your houses and they did a polish on us but I didn't find out why it took them 23 years to do it it's a long time to wait I'll make sure to live that long but it's a story of contrarian opinion opportunity deeply hidden introspection about an industry that was losing its way I guess some courage and stubbornness had to be there in so many ways the story of that serving you know this again, honest to God down to earth, human beings for their own hopes and fears and financial goals and realizing through all that great fog that we see today or money values there is in fact, remaining issues that are white or black right or wrong and I say, no compromise never a good compromising I guess there may be a time for it but never compromise, one of our directors used to say never compromise on that I didn't spend a lot of time I don't think 4 years ago wondering about whether or not I had to celebrate our 48th anniversary obviously not everybody lives much beyond 85 and the odds are now improved when you've been in the set by profound cardiac challenges it's again, 14 years before Van Buren was even born when you began, I must have been wearing blinders to ignore the odds entrepreneurs have said are as risk averse as everyone else the fundamental characteristic of entrepreneurs is risk seeking it's self-confidence entrepreneurs may recognize probably do, that starting a business is risky they just believe their innate skills will win out a third of all entrepreneurs according to a survey thought there was no chance, zero chance they would fail looking back over my own decisions in the early years I think it's a very receptive observation I guess you could say I don't scare very easily yes, some great ideas structure and strategy are central to our ability to change the world and investing feel better, it's very clear that's what we've done but I yet repeat as I say in the beginning in my previous introduction ideas where a diamond doesn't an implementation of anything is everything so I'm shameless about taking every opportunity to be with our crew members we need to provide what leadership I can the commitment they provide the leadership and commitment the professional skills and the human values that have been essential and are made essential to vanguard success and whatever further success we can achieve before we celebrate our 50th anniversary and God willing our 100th which I also expect to be around for and then I'm very satisfied with my understanding it's 88th anniversary this year so maybe I'll be there for a few minutes but these crew members are a legacy and they are the keepers of our value leadership and the topic really can't keep those values trying to reinforce it but it all comes from the people who are working day after day together so there's been great joy in my life as you probably tell in these past 40 years I love I love working on the firing line and with the crew those who do the hard work thankless work welcome to thankless certainly serving our clients and owners and I get such joy every day of going over to our galley for lunch waiting to our crew chatting with them meeting with them on so many fun teams and I mentioned large and small on so let's say a couple more things the day is flying on of course I age I don't really feel it he says well maybe I feel it but not in my mind I recognize the time will come when I won't be able to engage in the mission that I set for myself to continue to speak out for crew to take over the character of the world and strive to build a word for investors not just vanguard investors but honest to God down to earth you've heard this before I'm repeated again human beings deserve a fair shape one strength to carry on alas does not cannot go on forever in my case the spirit is more willing than ever with the flesh so for me human beings will be part of my world career including all of you including our vanguard crew and by far it's most important aspect particularly these most recent years I'm not sure I was just considerate of everybody very arbitrary, precious, high-handed dictatorial when vanguard started I thought I had to be that's my nature anyway I've learned a lot about dealing with human beings and I've often said I like human beings better than algorithms and I like judgment better than process not the varsity the next blessing we don't require a lot of algorithms and a lot of process neither has ever been my strong point in this early years we were young, collegiate, scorned by the mid-80s we developed aluminum discontinued ever since in the same place that we're having strategy power structure so in this rapidly changing world and how many birds can say that they're doing the same thing they've been doing for 40 years and it still works especially in those early years my success was by no means assured as I told you my highest priorities would indeed be optimistic every day on how many reverses there were and how much commitment I basically had to be the longest working person there I had to be the first one in the morning and the last one out at night and I wouldn't probably not quite the first I was usually in the office at 6.30 left at 6.30 no that didn't mean I didn't join at all it's 6.30 in the morning and 6.30 at night and but to communicate openly and to give the crew the strength to carry on turn about a spare point and today is our crew and all of you at Vogelheads were giving me the strength to carry on the tables have been turned these have not been the easiest for me surprisingly but I carry on through your competence our crew's competence you're collectively the crew who would respect your admiration and as some crew members have put it I love having a life possibly be more rewarding I quoted this song in my 63rd Anniversary in Business beginning with Wellington earlier in the summer I guess because it was day of July 9 and I concluded with a nice little song sometimes in our lives we all have pain we all have sorrow but if we are wise we know that there is always tomorrow lean on me when you're not strong lean on and I'll be your friend I'll carry on I'll carry on you know the song lean on me and I know I lean on you I lean on you so it's been it's been a very reflective of the whole thing until I'm going to need somebody to lean on so thanks mobile heads I lean on you you lean on me and it's been a very rewarding part the main thing I've tried to do the main thing I've tried to do is the crew repetitive in 1974 it's a creative working environment an investment environment based on integrity and service and ethical values a place where each of us after Abraham and Lincoln each of us are touched by the better the interests of our nature so that concludes our other lengthy remarks where we can get to the depth of slides which Michael will help me with so it is pause for a minute maybe we should take maybe a five and three and we'll get these slides together okay let's just need to sit relax here applause