 A program which is really a lot of fun because now we're going to get down to serious questions. Jack likes to take the majority of the questions from the audience, but because we don't have the mics in the ceiling like we did last time, I've collected questions from a lot of the attendees. So when I call your name out and ask the question, would you stand so Jack can address you and respond to your question? The first question is from Victoria and she said, Jack, we know that you're applying significant effort on educating policy makers on prudent regulation of the financial industry. How can we help you? Victoria? Are we there? Yeah. The political system is such a mess. And I don't know how to talk politics. Sorry. You're a special dispensation, Jack. Even I have very little. Sometimes I don't think anybody is listening. I have had a number of people interested in the retirement plan system and happily for me, I gave very extensive, this would also be on the website, very extensive analysis of what had to be done to fix it in my testimony before Congress. And this is like a 20-page paper. But of course, if you go down to the Congress, they want you to summarize it in two minutes. And you do, and they were all fine, but nothing happens. So getting through the thicket down there is very difficult. I would say the best grassroots methodology you can use is to go to your local congressman, right to your local congressman if you can, and try and do it in the hope that all of us together can make a difference. It's a little bit like people saying, they're not going to vote anymore because their vote doesn't count. Well, it doesn't matter. And everybody observed that rule. We would have an even more chaos than we have now in our democracy. But the fact is we're in a testing time where the issues of which I speak are not particularly interesting to anybody in Washington. I have talked to a couple of guys on the president's, lower guys, on the president's council of economic advisors. I did talk a little bit to Jared Bernstein, who was vice president, Biden's economic policy guy, and fairly high up in the economic policy circles in the way he has, but now he's left to do something else. And so I think it was just speaking out and being totally prepared to say it had to be ignored. I mean, I think it was a time like those kids up on Wall Street where the mere fact of protesting at least gets in the papers and politicians will often listen to the papers more than they'll listen to anybody else because that's what they think everybody's going to be basing their decisions on. So it's hard to help, but it's hard for me even to help myself. So that's the best I can do with a vice president. Jack, the next question is from Mel Turner. Mel, would you stand with some Jack and Iverson? He says, what would be the regulatory response if money market funds break the buck? Well, we have a really difficult issue in money market funds. There still, as I understand it, have that treasury guarantee a couple of years ago. There's obviously policy making to worry about what would happen. There is going to be more regulation in money market funds. And I just don't see that it's even remotely possible to keep the same structure that we have now. We have free market capitalism. People can do a lot of things. I mean, not all rating services are created equal. You buy one bad bond and one bad money market instrument at a commercial paper as a reserve fund did and they're gone. They're at the place of the earth, the first mutual fund. And they're paying the penalty. This is not really a problem anymore. But their mistake, as I would explain to people, is they wanted to be the highest-yielding institutional money market fund. And it's the easiest thing in the world to do when you look at the man. One, you can slice your costs. Two, you can slice your quality. Guess which the manager did? And that's what cost him. He wasn't about to cut his revenues. And so there's a fundamental conflict of interest in that area. And if we're going to be bailed out by the government or have this Treasury guarantee continue, we're going to have to pay for that. And I had an idea many, many, many years ago, probably in the mid-80s, that we should start an insured money market fund. But the cost of private insurance was like 75 basis points. We started actually. We started with the first and only insured money market fund. And it didn't work because of the commercial portfolio that 75 basis point insurance cost made the commercial portfolio yield less than the Treasury portfolio. I mean, yeah, the mathematics are all important here. And so that was good. But everybody says it will be the end of the industry as we know it if we go to a funding asset value. You know, that may be. I said we have some people with an card working on this and will sit right near me in the office there, the legal department. And it stopped in one office. You know, they're trying to protect the present system. If anybody who's in the system now would do. And I said, you know, you really got your work cut out for you because you look at the Wall Street Journal and the Federal Reserve is against you. And Paul Volcker is against you. And I don't want to fight those two. I mean, they're too powerful. And so a lot of very intelligent people say the system has to change. And I would say the system will be changed. And I don't see what's the bad about a floating asset value. And I see it not as attractive to investors. But with our tax statements that we do, you know, I do most of my short-term investing in limited-term uni. And so I get a tax statement every year. And I either have a 275, this is a big account, $275 in short-term gains and $111 in long-term gains or losses, whatever the case may be. And it's very easy to take care of the tax thing. We have systems that take care of that. And so I don't see it, and I know it's not attractive to a marketing standpoint. But at some point we have to say we're in the investment business and not in the marketing business. And that's a discipline to be very difficult to voice out in this industry. So I think change is coming. And money market funds, almost certainly, by the way, I don't know if there's a problem with this, will be designated, oh, they've got some initials, economic, nationally risk, nationally important to our financial system. And then this new committee, the Treasury and the Federal Reserve are part of is going to come into place. Significant financial institutions have to be, I'm sorry, significant financial institutions have to be at certain controls and there will be tough controls. So I look for change, but I would look for change as being a positive. It won't seem like that to the managers, but it won't seem like that to the investors. Of course, with yields where they are now, I think I use a tenth of 1%. So no matter what you do, a lot of people are waiving their fees. And so they even have a tenth of 1% and the yields are just terrible. And we're all required to have, I think it's 40%, don't go over to this because I'm going to do a tail, but 40% Treasury, short Treasury is anyway 30% or 40%. So it's, I'm not worried about money markets going down. I think the industry is worried and the ICI represents managers and not shareholders. He's going to fight until their last breath to keep the system the way it is, but I don't think the system is sound the way it is, to be honest. Okay, this question is from Dan Smith. He asks, what do you think of Louis Brand and spoke the House of the Vogue bill? You're among French jaw-kicks. That's it. Well, first of all, I'm right. He did as kind of a check. I did ask Kevin to read it, and he did read it. He said I would like a lot of it and would hate a lot of it. I guess that's okay. And I think he did find some egregious errors in there, which were eliminated in the final draft. But he couldn't get them to change the tone. I think many of the commentators, many of you, some of you are here in the room, by the way, it's an interesting kind of book because I check it on Amazon, periodically, every other month or something. And he has these glowing five-star reviews from everybody. Everybody loved the book, which I guess is nice. But the selling, basically nothing. It would make any anything I wrote seem like going with the wind or something. It apparently has a cynical tone to it, which is okay, and a lot to be cynical about in life and in Vanguard and his local. But I think the thing most people have observed with those readers, and Kevin mentioned this too, he just doesn't have any credibility when he talks about the future of Vanguard and the future of indexing in saying new forms of indexing are going to supplant the old. I mean, I don't know what his standing is for making that kind of a statement. He doesn't know anything about it. And it's obviously, it must be obvious to you all, it's simply not possible to supplant the old, maybe for a minute, maybe for an hour, maybe for five years. But in the long run, the idea is to have a return that captures the market return and the market is valued in dollars. And so if you match it like we do in the S&P and to a lesser extent, or to a greater extent, the total stock market, that's the only guarantee out there. And some of the ETS that I mentioned have done proclaim to be much better, have proved not to be much better. Because how could they? I mean, when you look at the portfolios, we all own pretty much the same stocks. And it's just different weightings. So they're never going to be huge variations of all the Arnaud fund, as I mentioned, is so much more volatile. So, you know, the guy had fun writing the book. I liked the picture on the cover. I did get that far. And, you know, I will probably look at it at some point. And my brother said, they supported him in saying some things. He didn't say anything to say them. And apparently there's a lot of kind of nasty stuff. And that's okay. I mean, there's a lot of nastiness in life. So, what else can I say? The idea that I would be dwelling on it in some horrifying, wonderful way. Well, I'm protected by that, but I'm not reading it. But the main reason I didn't read it was honestly, when Kevin told me about it, when someone called up and said, press or something, which they never did, what do you think of it this and that? And I could say, sorry, pal, I haven't read it. So it will come and go. And it will be part of history, I guess. And a number of people have observed to me that the first book was much better. And the idea, by the way, I want to be very, very clear on this. I had nothing to do with sponsoring a thing. McRoy Hill came to me and said, would I cooperate and talk to this writer? And I said, sure. Because the first book, called John Boak on the Zangor experiment, ended 15 years ago. And I thought they were going to keep that and then add what happened in the last 15 years. But they went quite a bit beyond that. I know there's some repetition of that earlier book. And that was a nice friendly book, mostly. So we have what we have. How many of you have read it? I want that. Well, that proves what I said about that. Shooting the lights out. If you guys don't read it, who's going to read it? I think what happened to it is some of the early readers did some reviews on the forum and it didn't sound too flat on. So I think that turned... So the next question is from Joe Duggan. You've touched on this a number of times before, but he'd like an answer. How important is an international holding in the stock portion of the portfolio? Well, I mean, I talked about that at some length. He's saying, first look, what is an international? I'll just repeat my views and not repeat the speeches I didn't use it there. But my skepticism about international, my idea that international will not add a huge amount of value to your returns is based on, first, financial markets are a great arbitrage and a great way to arbitrage between the present and the future. So if emerging markets are going to grow much faster in America, that's not going to be news to the people that own Brazil and China and Russia and South Korea and Taiwan. It's in the price. Everybody is in the price. So that's number one. It's hard for me to see what would be totally different in return. And if it produces, say, a return of, let me say 3% a year, which would be huge in the next decade over U.S., and you have 20% of your money, that's 6-tenths of 1%. Well, there are so many better ways to say 6-tenths of 1%, including buying Vanguard funds instead of somebody else's. It's a guaranteed 6-tenths of 1% and not a speculative one. So that's number one. Number two is when things are hot. Well, number two really is, I should put this number one. America is an international nation. 50% is the number. IOT is 50% of the revenues of the companies in the S&P 500, presumably in the company's comprised total stock market, are in revenues and profits. 50% of the revenues, 50% of the profits come from outside the U.S. So you're already 50-50. Do you need to make that higher? I leave that to you. It used to be said that the big value was, and I mentioned this slightly briefly before, the big value was that it diversifies because foreign markets don't react in the same way to things that U.S. markets do. And that's no longer true. It will probably be true again because these things revert to the main back and forth and back and forth. Next, when does international get popular? You know, these investment advisors will often say, would you need this as an additional diversification? But they almost always would for additional diversification are the things that are the hottest. You know, no one's going to tell you to buy, I don't know, port bellies to diversify. And gold is the ultimate diversifier. It's the best diversifier you can possibly define. But people don't talk about, didn't weren't talking about diversification 10 years ago by using gold. They're talking about it now. So it makes me skeptical and the same thing is true of international. Although with a bad year for international, it'll be interesting to see, which I don't think we see yet, if money is going to go out of an emerging market of international funds back into the U.S. How the investors must be clearly disappointed. I think we had about a 25% drop in the emerging markets last year. In the U.S. market, it's almost unchanged now. And that may be, by the way, the perfect time not to get out of it, not to get into it, but not to get out of it. So I don't have any easy answers to that. And I'm me and you're you. And I would say you probably won't hurt yourself a lot if you use it modestly. I just don't see the point of having an international portfolio in which the U.S. is about 40%. In developed markets, about a little over 40%. In emerging markets, a little under 20% in very grand numbers. I don't think you need to go that far to get 60% outside of the U.S. I mean, we earn our money in dollars. We pay our bills in dollars. We save in dollars. It's a dollar economy. And so, you know, to speculate on whether foreign currencies, which is a big part of the amount when emerging markets and developed markets are different, it's currency change, and not fundamental value change, not global currency change. So I just don't think it's necessary, but if you said, what's the matter with 20%, I would say nothing. I advise you not to go to 50%, but I could be wrong. I don't think it's going to be all that different. But I don't do it myself. I'm only about 20% in equities anyway. I thought at one point about getting into emerging markets, but to confess totally, and I'll say not only a lot about investing in emerging markets came to me. I thought maybe you want to do that. The idea of putting 1% or 2% in gold came to me. The idea of getting much more conservative and when I saw how far stocks would fall, I had the same temptations. Everybody did. Stock market, why am I doing it? What am I doing with 20% stocks? And the secret of my success, such as it may be, is I don't succumb to those temptations. So I just leave things alone. The burden of proof for me is actually making the change. You really want to do it, Wendy, you want to do it, and that's a hard thing to do. I wouldn't want to scare anybody out of international. It could be something I should be doing, trying to scare you out of it. But we don't know the answer. So to make sure you're widely diversified and hang on to it, I wouldn't change your position as a relative to any of what you say or do. But just think about, and particularly that idea of that competition, about the composition of the index. It's remarkably concentrated in a very small number of countries. China is either the answer to our prayers for investing in the red, as Dr. Malki has kind of pointed out, forever, or maybe it's going to be the next great big collapse. I'd say to those two things happening are about 50-50 in each case. A lot of funny stuff goes on over there. The next question is from Sue, Lady Geek, right here in the front. She says, do you think that a 4% safe withdrawal rate in retirement is a good objective? Are you going to de-study here? 4%. Going from an era where everybody thought 5% was right, I always thought 5% was too high because when you think about the climate for market returns, it's going to be something like 7% for stocks, I believe, and 3% for bonds, 3 and a half, and that's going to give you a portfolio return of 5%. 4% isn't safe, but I think you can do that in a circumstances change. I'd keep a little eye on whether you're consuming capital and what you're doing though with that kind of return is with a knowledge certain the purchasing power of your assets will be smaller 10, 20 years from now than they were today. If we have inflation of 3%, and right now inflation is, I guess, 1% or something, and the bond market and the inflation bonds tell us the inflation rate will be up to 30 years, will be 2%, and that may be right, but if it's right, we've got a lot of problems and this economy is not going to be growing if we have 2%, if we have 2%, only 2% inflation. So, you know, I'd stick with 4, it's too fine-tuned, I think 3 is a little bit lower than it needs to be, if I was to say no 3 and a half, I'd be talking through my hat. The next question is from Chester Skoroba. I hope I pronounced that correctly. It's a three-part question. If you had a magic wand, what changes would you make to number one? What is currently available to retail investors? Number two, how Vanguard is run? And number three, the overall investing atmosphere of the country. Well... I'm thinking about the second one, I think I'm a product industry and I banned the word product I banned the word when I was running and you have to pay a $5 fine if you use such a word. And then the reason that's quite simple, we are not in the business or should not be in the business of selling products. That's somebody else's business. Whether it's Campbell Souk's business or Budweiser Beer's business, you know, make it and get rid of it. And that's not the business that is the core of what Vanguard should be about. The word is correct back in and we use it all the time. It is a... I don't mean that in two words, but in a little bit of a way. Because there are a thousand other words when you say a financial service or a trust service and it doesn't kind of... It seems a little complicated from cumbersome as a product, it's kind of a good word and so I didn't like the idea left and you know, it's just not a happy way to think about the business in which I find myself. So I think I think you said the first part of the question of what retail products or something should we have to make available products for the retail investor and I say less less. Why do we need more? I think there are thousands of funds out there. Now we've reached totally a lot of people. It's absolutely like going to Starbucks in the morning and getting that iced latte with blah blah blah. I mean you use your word and it must be terribly expensive. And by the way, I only drink many bowls, many means large by the way. Because you don't know. So I'd say less is not going to happen but the message I'm trying to send is don't complicate the job and you know, the first rule of shooting is don't shoot yourself. And you know what the second rule is? I don't think it's relevant here, I hope not. If you shoot somebody else, be sure you kill them. I've lost before you did. Vanguard, there are some things that can't be changed. We've gotten big on me and we have by the way, the most incredibly dedicated people at Vanguard. They have a high respect for me even as I've been waiting years of my life and career. They enjoy being with me. They ask me to come to their retirement parties, which I only do, religiously only do, but none of this management is not there. When I get one of these invitations, I say I'll be glad to come and talk to you all. The coast is clear if you know what I mean. I go back and say, I do know what you mean, the coast is clear. That's not a cynical comment and I don't want to interfere with the management once. They can't do all these things when we've got 12,000 people. So I'm happy to fill that gap and our crew is certainly very happy to do it. Let me give you an example. I often talk about when you talk to these crew members that I told you I did for an hour at a time. Usually we don't have a time limit but sometimes it goes longer and you never, never, never when you're talking to one of these wonderful people who haven't been there a long time and got me an award for excellence for cooperation and excellence and working well with colleagues and all that and you never say well an hour or something, that's it. I mean you just let it go until it kind of doesn't go anywhere. But we talk about the rise of bureaucracy and I think I mentioned that line. I did mention that line to you guys but it's always keep a place, a bank or a place where judgment has at least a fighting chance to triumph over process. And I say look, here's all judgment and here's all process and the bigger you get the more that line goes over and when you get big it's going to be here say somewhere three quarters of the way across. There's no way around that although I do observe that if the chief executive loves process it's going to be over here but it's never going to be back here and there's no way around that when you get big that's one of the hazards when you're growing and of course when you think of people like GE and God knows who else who have 200, 300 or more 200, 300,000 employees or more I guess not a bank or really a big at all but we started I couldn't help observing because I looked at your program today but it looks like we have around 30 I mean I think it's a really great sign by the way some kind of arms length stuff with Vanguard and Global Head Street quite a while and that seems to be all mended unfortunately or mostly mended anyway and there I think 30 Vanguard people are going to be around have these little fair where you talk to people at ATFs or whatever else you're going to talk to talk about and then the participants in the panel and then I guess a number of people that help you around A to B and I couldn't help thinking when I I didn't do an exact count with the ink clearly it's about the right number it occurred to me that when I started Vanguard we had 28 crew members so you're going to see two more people than I saw actually three because I didn't count my second so you get bigger and they can't help that I think Bill McNabe tries to keep our reign as personal as he can but you have to do so much by video which doesn't cut it for me and I know they have to do it and I think we're very sensitive on the flagship side to trying to maintain fairly easy to get your flagship representative on the phone very very important thing particularly now with Admiral shares being so much important I think I said 35%, 31% I guess, of our business and so you try and fight it where you can but the key thing the two key tasks as I see it for being one don't do anything stupid in the investment side and you could argue about some of those things and I'm not so sure about market neutral I'm not so sure about the way we're running target retirement I haven't figured out what the heck managed payouts all about yet but give me a little time I'm sure I will but that doesn't have to affect any Vanguard shareholder because you might not do the things I do wonder a little bit but the big tension in this business is always the tension between management, professional management and marketing marketing is a terrible drag when everybody else has some odd idea what a copy goes on and you know it's a strategy it's a you can argue it's a business necessity and they still remember my basic two rules of marketing which I talked a lot about at the beginning in my talk is a measure and not an objective and market share must be earned and not bought and I did mention the second of those rules when I came to my attention and were thinking about buying Barclays ETF operation market share must be earned and not bought now and I could never figure out how that would work I was not pleased but I was ecstatic that we didn't do it and I don't think it would I don't know how you have high cost ETFs the same platform as low cost ETFs and if you make the high cost they're high cost ETFs or low cost ETFs what are you buying the thing for I mean they're going all in profits and it's a very profitable business so I don't really think management is coping with difficult circumstances of growth trying to be competitive I'm the competitive guy I slug everybody in the nose and I don't understand why anybody else is doing any business at all but I think they're handling that tension as well so I really don't think I can complain this next question the overall investing atmosphere in this country crazy and I mentioned this in my talk the triumph of speculation over investment so yeah I'm sorry so what I'm saying about the overall investment atmosphere is the question is in effect ill-chosen because we don't have an investment atmosphere in this country anymore it's whole speculation what happens in the marketplace is 90% speculation or even higher than 90% people trading with each other as if they were in a great big gambling casino with no gain in society lost to those investors who were doing the trading I mean I'll give you the example that I usually use and then let's assume that each stock in the standard of the poorest index half of each stock was owned by speculators and half was owned by investors well we know that the investors who don't trade at all as a group will capture the market return exactly and we know that the speculators will also capture the market return but by trading with each other because no one else will trade with it they'll pay these croupiers so the idea of investing over speculation the triumph of investing over speculation what we have now the triumph of speculation over investment is a mathematical certainty mathematical certainty and I tried to build a company out of mathematical certainty gross return minus cost equals net return you heard it here so it's crazy and think about it this way I had the market this year below the value of American business represented by the price of stocks dropped by 2 trillion dollars say from 16 trillion to 14 trillion does anybody really think that the value in that I don't know four month period of American business dropped by 2 trillion dollars I mean it's inconceivable it was pretty much the same at the end of the period at the beginning but market expectations a big problem and it created an environment for stock prices that was divorced from values the next thing is from one of your favorite bogeys Kathleen Ryan who had to cancel the question is at the beginning but she has a note to you after that the question is being you were born in 1929 did that influence you at all with regards to your study of investing in the stock market she says when my grandmother passed away at the age of 97 years and 8 months I went through her important papers and found a fractional stock warrant dated December 10 1929 I felt that she was very courageous to invest in the stock market only about 2 months after the crash of 29 the fractional warrant was from trans-america company with a signature name from APGNN had I known I would have asked her if she met him I like to think she did how cool is that that if she had met him she would have met the founder of trans-america and I her granddaughter had met the founder of vanguard two very big captains of industry I mean wow with best wishes to you always so the question is what were the questions she wrote it at the beginning and said at the end that being you were born in 1929 did that influence you at all with regards to your study of investing and the stock market well first I'm not to belabor the obvious I was quite young in 1920 I don't remember I don't remember anything about it I saw the look in my father's eyes when he came home with the newspaper there was some real trouble but I was at that point 6 months old I think in a sense it's a pretty good question but it's not so much the 29 but the 30s was a huge amount of money for those days and it all vanished at the Montclair Trust Company we were doing the same thing they were doing in the last big bust buying the things that were hot and the buying probably leveraged those Goldman Sachs the leverage closed end investment companies that actually all went bankrupt that's Goldman Sachs for you change the script you can't change the outcome and there's practically nothing about the stock market instead of getting like anybody else these wonderful confirmations about how much our 401k plan was worth we were getting notices from the personal finance company saying if you don't pay up we're going to take over your house that's a little different environment so I remember the economic privation came out of the boom and the bust very very well and it's made me a lot made me the way I am I don't like to spend money I really do not like to spend money period and I don't buy anything for myself almost nothing I did buy a new pair of khakis last summer only to my wife's insistence I just don't enjoy that and that comes out of your own brain but in a lot of ways your persona is shaped by not having a lot of money knowing you have to earn what you get and doing good things it's an advantage in life I was mentioning this earlier that one of you came up and chatted with me about leadership I guess with Laura and I read those little things in the New York Times on page 2 every Sunday about leaders or purported leaders and what their background is and what they look for in leadership and some is pretty good some is pretty horrifying but what is really interesting is I think the third of them had been waiters when they were young and I think waiting on table is probably the best training anybody could ever get you know you gotta do it and no matter how unhappy you may be and I was never unhappy doing it and you're serving somebody else when I'm a poor kid at Princeton waiting on the rich kids in the dining hall which is the way they used to do it and I thought it was great very democratic and very fair and now we're more democratic and I think if the kids that don't have money have to work together well that's life but I think you come out with a big advantage a big advantage of knowing what it is to stand up to yourself knowing how to take responsibility and knowing sometimes no matter how difficult circumstances are you still have to smile and you can't get angry and the customer or the client or the person you're serving dinner to and I do remember dropping one of the biggest trays down lower eagle dining hall and he used to carry these trays like that probably had 12 plates 12 butter plates 12 saucers 12 cups I can still hear the noise I didn't do it deliberately by the way so the next question is from Dan Smith what's your opinion about the value of anatomy education how important is it to go to Princeton instead of Rutgers let me say this as you can probably imagine friends, classmates of mine and friends of mine here will ask me to review their kids and write a letter to Princeton I pretty much do them all maybe four a year I'm very clear about my recommendation I can't say I've done this kid all of his life, real life, and seen him grow because I haven't his father asked me to interview him and here's what I find I'm very clear about that I don't want to do any deceptive or duplicitous it's not a good idea I always say to the kids I know you want to get into Princeton the odds are terrible they're much worse than the most of the odds they claim to take 8% of the applicants and the real number I'm sure for you to count football player here and there another kind of an athlete you need a tuba player generous alumni I think they're entitled to some kind of a legacy and they are, I mean they get it and I would argue they are but that's another story but you take that group out and the real admission rate is probably 4% or 3% and I say you know it's amazing how I say to these young men and women who had enormously successful careers happy families, fulfilling lives that never went to Princeton amazing would I prefer Princeton directors? yes but you know it was just a great place for me it was much better probably it's so different and diverse now we have a lot more I think it's exactly half or almost exactly half women there was a black man in our class he didn't know what was black he was kind of dark but he was black they had limits on Jewish kids very very few Asians and all that has changed Princeton is adjusting to modern times and you know I loved it the way it was when I was there but I realized you can't give me I look back with great affection it was a wonderful, wonderful time in my life and I hadn't gone to Princeton there wouldn't be any vanguard there was no other college in the country for the undergraduates to write a senior thesis so it was a great blessing and I wouldn't take it back a thing I owe it a lot but today the world talent will emerge and I'm sure you can get a good education at Rutgers I'm sure you can get a good education at Westchester University here a little big it ends up being up to you and I'm a big believer that we have ourselves to answer for finally and the idea you don't get in Princeton say and spend the rest of your life complaining about how your future was ruined by not getting into Princeton there is the perfect identity of a loser the next question there's a little inside explanation for those who don't know Jack really does have a slide rule on his desk and he knows how to use it so the next question is from Dan Smith and he wants to know what kind of slide rule do you use pick and echo or cofl and icer which is best why do you use a slide rule instead of excel the answer to the second part of the question is coiffle and acer it's aluminum the wooden ones get very sticky and I also have a little mini one that doesn't work very well so when I started banging on my desk the fine one under all that paper there really was everybody says kind of a joke but I got into this a long long time ago I didn't use it, I was an engineer which is where you see slide rule which used mostly undergraduate days when I was in college but I was doing at the end of every month I would have to go over to our Camden office where our funds were located and get yields and I would hang in the portfolio and so that was what we did in those days and you know I had my little mineral calculator you know that kind of crank when I found out the yield on General Motors it was 6.48329 on my computer wonderful what the hell did you do with that I found out by a quick switch of the slide rule I got 6.4 and I didn't care about the 82419 I mean it's very very efficient compared to what we were doing because it's as much now but I don't think many days go by when I don't do something with it and it's because I'd rather be approximately right than precisely wrong this question is from the forum Jack it's from Joel Mr. Mogul what are your top priority projects for the next one or two years thanks for what you've done for individual investors well my highest priority and you know things keep getting though it's amazing how every day something new pops up you'd think that the demand for my ideas, services whatever would fade but they don't and in a certain way I think I could make a statistical case without even the slide rule they're actually intensifying right now and I spent a lot of time on things like the talk I gave to the endowment fund officers in Washington and I spent a lot of time doing this this morning a little slapdash for me but it doesn't you know just say well let's sort of go to some charts Mike and say that damn it work like I have now that's just not the way the system works so all these things are diversions when I really want to get out of the way for my next priority and I mentioned the deadline I lengthened because of my disability or inability as the case may be and so that's my first priority and then I don't think I'm going to write a book anymore I think that will be really will be my last book it's a lot of work and it's the it's the overhang of you know having a task it has to be done when you're 82 years old and so it'll be done by my deadline at the end of February and it'll be done well I don't want to compromise as well as I can do what I should say I don't want to compromise on quality and then there will be periodic speaking invitations I'm doing very few between now and then and I did get an invitation to speak in Lexington Kentucky 2014 2014 I told them I was busy that day and I don't much like anymore flying you know we grew up with getting there is half the fun getting there is not half the fun anymore I guess that was the Q and R line travel doesn't really appeal to me so I'm trying to limit my ambit where all possible to New York Boston which I can get to by training easily in Washington so I have little speeches National Association of Business Economists I'm going to do a seminar I must say that was greatly complimented by this I don't know how many of you followed Jim Grant the interest rate observer guy the best writer in this business without any question he's a big forum every year that's very prestigious and he asked me to just do a Q and A with him this year and he really needed me so I took that as a great compliment so I'll be up in New York and I'll attend that whole thing which probably starts at 8.30 in the morning but I'm interested in getting home at night getting home at dinner so I'm going to leave you this afternoon probably around 6.30 but I'll be there until then but I just want to see how our guys do get a chance to chat with you all a little bit and we'll chat a little bit and then if you're going to do television interviews and this is you know it's a ridiculous but if you're going to do even a simple television interview with an ignorant question they're not all ignorant by the way I mean it's just that but it's been known to happen and you have to be prepared so you end up trying every day to keep up with what's going on and if you're interested in every single thing that is happening in the world which means you're in the financial business you know it's the New York Times it's the Wall Street Journal on Saturday morning I can spend two and a half hours with those two newspapers during the week I do primary one on coming to work and one on going home because the company is still nice enough to have our mailroom guys take me back and forth and so just keeping up and being interested in everything and then after I get the book done I was telling someone earlier I don't think a day goes by without some idea in my mind for an op-ed in the Wall Street Journal for an op-ed in the New York Times or even the financial times they want me to do something they haven't even said what but they come to me I don't know exactly why maybe it's irreverence maybe it's age maybe it's wisdom, God alone knows maybe it's going done they know I'm a pain in the double back but I could write an op-ed at least every day on a different subject but I can't do it because it takes a day to write the darn thing can I just tell it a funny kind of story? sure one of my most amusing was in the Wall Street Journal and I got a little note from Tungku Vaginaria the guy that ran the an Indian educated in Britain who became that editor at the time and he was kind of an irreverent guy and we got along pretty well so I wrote a lot of stuff for him and the editorial guys almost never really didn't like much of what I was writing particularly when I wrote something nice about Elliott Spitzer and but they would print and he would ask I got a note from one day and it says don't you hate dot dot dot on the title thing and then dot dot dot on the next line Davos Davos for the World Economic Forum takes place every year so I write back and say it's absurd, ridiculous and a waste of everybody's time except for the egos of all those big shots that go there and so he writes back and says can you give me 1,200 words on it since they're all in Europe you've got to meet the deadline for the afternoon for the European edition so it has to be done by three o'clock this afternoon so I write the thing and my granddaughter was coming in for lunch and one of my granddaughters and believe me, I'm not going to she's not going to be part of my type of time schedule if you have a chance to have lunch with your granddaughter don't let anything interfere with that ever, ever, ever, ever so I got it typed up took her out to lunch obviously at the Cheap Valley Vanguard Cafeteria and came back and edited the thing and had it all up for three and it was really one of the most fun op-eds I've ever done probably the best one I've ever done it was fresh, it was irreverent and I complained about all these guys and then I said, you know I am interested enough the last lines, it's something like this I am interested enough that when I read President Clinton is flying over to give a concluding address tomorrow if he calls me up and will take me on his plane darn if I won't go with him he didn't call so it's a lot of fun and there will be things to do but the book is real and I have to tell you I love when I look at chapters in the past books, you know I don't dwell on them but I once in a while look at what I said and I really love what I've written and how I've written it's very egotistical very self-serving what I really do and I think it's my part very important issues and so but the first drafts are so pathetic that if I was your student and you were a teacher you'd say pal you got no future in the future here there's a lot of ways of what I am anyway this question is from Got There Late I know he's out there somehow do you have any regrets about your family in the vanguard and what would you do differently if you had it to do all over again well there are two things I do differently one of which I talk about and one of which I don't duh I feel comfortable in saying you know I I kind of wish that I had a general I'm basically fundamentally I think a general person but if you're trying to put a new company and do ideas into that you can be pretty unabrupt and I don't think anybody would tell you it was ever in a mean spirit but things have to be done and you can't convene a committee to do them and I never did you try things in this life and given my work ethic which is superb or pathetic depending on how you look at it you know I'm going to know more just because it's kind of personal not because I'm any smaller I'm going to know more about the issues I want to talk about than anybody around that too I don't want to have other people who know less if they know more than I do I'm more than willing to help them but they haven't thought about it they haven't walked around it it's a new exposure for them this is not different to what we are who we are and so I was probably and I've confessed to this much more of a dictator high-handed probably but I think in a decent way that people pretty much understood quoting George Bush the first kinder, gentler executive chief executive but maybe there wouldn't be any vanguard if I were so you got to take the good from the bad and no one can really imagine what it's like in those early years to try and get stuff done and you know you say and or often with a group of four or five people I don't know who's going to do what would you guys figure that out and that was it and I don't think it's a bad management style actually but I never thought about management style and someone, Laura I think again asked me about leadership, first rule is for God's sake be who you are because people can splat a phony a thousand yards away I don't think anybody has ever quote me a phony how could they, good reality is so terrible they don't need to