 Our distinguished guest of honor is the founder of the Vanguard Group and president of the Vanguard's Bogel Center Financial Markets Research Center. He created Vanguard in 1974 and served as chairman until 2000. He entered the investment field immediately following his graduation from Princeton University where he graduated magna cum laude with a degree in economics in 1951. If I listed all of his honors and achievements, which most of you already know about, we wouldn't have any time left for his presentation. So I'll dispense with this and ask you to please welcome our very special guest of honor, Mr. Jack Bogel. I really appreciate that. Thank you so much. That enthusiastic welcome, I think is in part, I assume is in part. Let me get myself together here. I assume is in part because I had a little problem yesterday, a little problem resolved yesterday with my heart which was out of rhythm and I wasn't sure I could be here at all. So I'm obviously happy to be here. And in my 89 and a half year, happy to be here. Don't knock at me. Let's say all I were doing yesterday and they've done it to me before a number of times is when your heart gets out of rhythm, shock it back into rhythm. And this little machine happened to be designed by one of my first cardiologists, Dr. Bernard Landlap in Boston, called the Cardioverter. And this is a shock and it's over and you're out during, they give you a little very light anesthetic and so it's back, got back to normal yesterday. And I'm pleased to report that I've already sent it on my iPhone to my cardiologist this morning. And the first words I saw were normal and I've seen so few normals in the last couple of years that don't quite know what to say about that. Well here we are again. Here's my wonderful Mike Nolan who I couldn't get anything done. And there's my staunch Emily Snyder and we have a photo of the three of us and actually with Kathy Yunker, our kind of part time person in the new book, I'll get to that later. And it says, never was so much owed to so many by, never so much own was owed by so many to so few. That's a Churchill expression about the Royal Flying, Royal Air Force in World War II. And so our three of us and Kathy are our little team and man do we crank it out. It's pretty exciting and everybody seems to get along well together, does get along well together. And without them my life would not be a hell of a lot of fun to be quite honest with you. When I come in in the morning they're often chatting and they immediately sit down and get back to work. It's as if someone says, here he comes. And we have a good time together I think and I know I do. So here we are again. Bill has 17, particularly like to welcome Tim Dempsey, who is here for his 17th time. Are you there, Tim? I told him I thought the cruel and unusual punishment was prohibited by the US Constitution, but apparently not. So I've got a presentation and not the same as, obviously not the same as last year, but similar in a lot of ways. It seems to be what you like and Mike has helped me out, done all the work on the slides, which is a huge job we keep revising and changing. So we have a large number of slides, some of which will take only a second. And so here we go. We're going to start off with some of the bigger news clippings of the year. And there's a nice cover story on Barron's. I look a little, maybe morose or something on the cover, but we quickly look happy when we get inside. And even shows I went to Princeton, by the way, if you look carefully, which is nice. Another really substantial article called, it was an advisor perspective by Larry Siegel, who was the chief financial expert for the chartered financial analyst CFA, the Professional Organization. And it was nice, it was a very substantive interview. And I'll come back to this later. There was only one thing, I didn't bring it up here with me, but I said something very controversial to a lot of people, I guess, when you, I'll get to the chart later, but it expressed my opinion that I think growth and value, which is the better choice and I'll talk again, I'll talk about that later, is basically people, it was all the good years for value were concentrated at the beginning of a 90-year period. And the recent years, 30 years probably, it's been back and forth, back and forth, back and forth with no difference. So what I said in the article in the interview with Larry, that I assume that was because having seen the past 30 years ago, people decided they would get into growth, into value, and out of growth, and that bit up to value stocks, and down the growth stocks, and so we had no reversion to the mean. This would not be uncommon. And a person took, there were a lot of response to that in this article. In fact, Mike was nice enough to send it to me, I could look at it last night, should have put me to sleep. 61 pages of comments about that conclusion, 61 pages. And many of them were from Larry Swedrow, who had the first one. Larry Swedrow's in the bogal head, is he? Is he here? OK, then I'll continue to speak freely. And his first sentence was, Jack Bogle is wrong again. And it's easily possible, of course, that he's right. But 61 pages of comments, and I'm talking about a little tiny type on the page. It's unbelievable. I didn't bring it up here because it's too heavy. So that was a bit of, it was overall a nice article. And I just throw this one up here, influential financial revolutionary, with no interest in crypto, simply because I had this wonderful phrase, a grandfatherly assassin. And I don't know, I've never been called a grandfatherly assassin before in my life. And we'll probably be called none again. And then this next Bloomberg Business Week by Justin Fox said something I found very heartwarming, if you will, no pun intended. When he says, I called Bogle because he's the author of the clearest outline of the economic role of the asset manager that I've ever read, ever. And it's 1951, for instance, senior thesis, the economic role of the investment company. It's nice to see people still reading that. It's not all that good, it's in one of my books. And it's okay. But if people want to overstate my abilities and contribution, who am I to stop them? And then finally, I guess under the clips, even on vacation, of course, I do a little work, and this was at the Lake Placid or out of Rondack, I should say, roundtable. And it was a really nice speech. I did it in a little bit different style, and it ended in a standing ovation. But I think that's because, the full house, I think that's because I ended with a prayer, a Lake Placid prayer that we do in our family. And so in any event, that was a fun thing to do. And then another article here in the Enquirer says, it keeps saying, Bogo, Bogo, Bogo, Bopho for Bogo. But it's about the Bogo Heads Philadelphia chapter. And that photograph there, of course, was taken here last year at the National Chapter, if you will. And it's really a nice article and a nice tribute, in fact, to all of you. And I should say at this point that you mean a lot to me, all of you. And to have this full house here, this full gathering and getting such an enthusiastic welcome is you can't imagine how it feels, how comforting it is. I'm getting a little bit old, and so I'm starting to reflect a little bit about my career. And I've never wanted to do that particularly because of following Sophocles, and when you're in trouble, always quote Sophocles. One must wait until the evening to enjoy the splendor of the day. And I used to say, my evening is not here yet, so I'm not fooling around with the splendor of the day yet. But I think my evening is here. And I don't look much like that, but there it is. Another, I'm always like to be a little rabble razzler, you know. And so the Wall Street Journal had an article about corporate social responsibility fund not doing as well as the market. And I got, is the S&P 500. And so I wrote back a nice short letter, they like them short. I'm out of work with the editor, the letter's editor, they have a special guy in that job. And just said, so does everybody else like the S&P 500 essentially. So gives me a chance to plug in the last sentence. The S&P 500 remains a tough standard for all invective managers to outpace. Most fun was a letter to the editor of Barron's by a professor at MIT. And I'm sorry, PhD from MIT, professor at Harvard, who I saw an article in Barron's, I couldn't let it go. And the article said, in the specular bubble everyone buys because everyone else is buying and then the bubble bursts and everyone sells. And to which I responded, really. The simple self-evident fact is that when, quote, everyone is buying, someone else is selling, dollar for dollar. And when everyone is selling, someone else is buying. This is the eternal reality of the financial markets. So the fun thing was that Barron's wrote, put my letter in like a special box in there, and put his response. And his response was, first let me say, you are a hero of mine. This guy really has good openers. And then he adds a little icing on the cake. That isn't something that I have said lightly or ever. For 35 years, I've put my spare savings in the Vanguard index funds and done very well with it. I think he means them, but I would never correct a Harvard professor. But I was a little bit concerned and I thought his escape hatch was not such a good one. And now to your questions. One, you were right of course that for every buyer there's a seller. Doesn't seem to me that's a particularly big concession. The language you identified was knowingly loose for journalistic purposes. I would never use those words in a more scholarly paper. Well, I write a lot of scholarly stuff and you don't have to. You can write the English language. You can write the truth in a journalistic purpose or a scholarly purpose. And I overlap a lot. Then we must talk about a couple of fun awards that I got versus the American Indian College Fund, which I've supported for a long time. And they claim that I've helped 500 young Indian Native Americans with their college educations. I don't think it's that many. But when I send them the money, total scholarship for an American Indian college at the American is $1,000. That's all it is. And so there may be to get to 500 maybe partial scholarships that I've given, I don't know, but that's their number. And that made me very happy. And they offered me the Bill Apache Award, and Bill Apache, meaning friend of the people, their big award, at a big party they have. I told them I just am not up to doing big galas in New York City. And so my daughter accepted the award, and that is her, with her glasses looking very charming there as she is. And she did a great job. I actually sent my son with her, and he held up his phone so I could hear the speech. And she did a really wonderful job. I'm very proud of my kids, all six of them. But what I particularly like was she cited this quote from Chief Sitting in Bowel about warriors. And there's an article in the American Airlines magazine, called The Warrior. I think it's called The Warrior. And you think of warriors in a certain way, we all do. But for us, the Indians, warriors are not what you think of as warriors. The warrior is not someone who fights because no one has the right to take another life. The warrior for us is one who sacrifices himself for the good of others. His task is to take care of the elderly, the defenseless. Those who cannot provide for themselves, and above all the children, the future of humanity. And I could not write any better what I have tried to do with my career. And then there's a big award, kind of a fun one. They offered me this award down in Florida. It came with, off the record now, it came with $50,000 bucks. And they don't usually give you any awards. Sometimes I think they charge you for the award. But I said I can't come in person. It's just too much for me to get to Naples, Florida. And so they said, how about if we fly you down? And I said, well, that would be fine. So the mic and I get out of the airport. You've done like it when I travel alone. And I have great, mic is great company. And so I get to, we get down and pull into Naples Airport. And you can't land in Naples with a commercial plane. Oh, no, commercial planes in Naples. And with all the big Ritz-Carlton's and all that money. No, no, no, no, no. So and there's a limousine to meet us. And we go and give the speech and get the awards. And I gave them a pretty good, I was, some of you, have suggested that I should get the Nobel Prize in economics. And it's not going to happen. I don't do that kind of work. But two of the three people that gave me the award were Nobel laureates. And so we had our picture taken together to show that I came close. But I did when I traced the history of the index. And this is really important. There's so much untruth about the development of the index indexing generally. Nobody argues that I mean, everybody understands and agrees that I started the first index mutual fund. That's a given because that's an easy fact to identify. As to starting indexing, there's a lot of lore in there which doesn't, it seems to say that other people were doing this too. So let's say they are. And there were people working on it. But I said in my talk there to all these people, am I saying that one with a mere AB degree from Princeton and an MBA from Wharton, that would be Jan Tordowski, my assistant, are smarter than all these those with PhDs and master's degrees who are groomed at the University of Chicago, Stanford, and Harvard? Of course not, truth told. Yes, I am. But it didn't seem like the right thing to say. But the main thing is that there were a whole lot of roiling going around about indexing when I started the first index fund. I didn't happen to know about any of it, not anything. I didn't know about the efficient market hypothesis. I didn't know about these guys that won the Nobel Laureate, I guess that would be French and Fama or Fama. And when I found out about them, I didn't think they were right. But in all our fussing around indexing, this is the important thing. Because they all brought out something, maybe seven or eight different enterprises. Not one of those fledgling efforts in indexing bore fruit. Not one of those early pilot lights ignited the flame of indexing. That's a pretty good sentence. All of those tentative forays failed to create a single index fund that was sustainable and successful. All except one, Vanguard Index Investment Trust. First index investment trust. So whatever the case, I find myself defending my parentage for the want of a better word of the index fund. And I've had a good chance to make that clear. We're going to books for a second now. Number 12 has come out. I'm heading for a million copies, as you'll see at the top, 949,000 copies. It's just amazing how well these books sell. And sometimes for odd reasons, I think when you look at common sense on mutual funds, 10th anniversary, 59,000 books. It's almost as many copies as its original, which was 1999, which sold 67,000 copies. But I think the reason the second edition did so well is the publisher, not I, but the publisher, as David Swenson to write the board and David Swenson is a word that elates investors, excites investors, impresses investors. And he turned out to be a wonderful, a wonderful friend of mine and actually sent me in, I guess, respect. Yale gave him 30 bottles of expensive wine, Chateau, I think it was called Chateau, $5,000. I don't wanna tell you the price, but they put it right on the label and he sent me one. And that was about as thoughtful as you can imagine. And when actually I sent him, he wrote me a note saying, he'd love to have a copy, some copies for the new edition, the 1999 edition when I changed the cover, it was an ugly cover and I changed it to a beautiful one, I think that's fair. I do like what I've done myself the best and he said, I'd love to have a copy for every member of my staff. So if I send them down to you, would you sign them? I wasn't born yesterday, I waited two days. And then I said, dropped an email, David, look out your office door, they're right there, all signed. Cause I just signed them and set them up FedEx and waited two days to respond to his email. So he was duly impressed and I think should have been. But you know, I love to do those things, little things mean so much in this life. You know, I'm a little off subject here, but I get letters from investors, letter from crew members, people who are in deep trouble, someone that I worked with in Wellington Management Company three years ago dying and his daughter thought that would be nice if I would just send a little letter, of course I did. I mean, what kind of person would not do that? Doesn't matter how busy you are, make the damn time. And that's my philosophy no matter how little. And we'll talk about, we'll talk about stay the course, the story of Vanguard and the Index Revolution. Later on, that'll be my closing section today. And here we are, there are other people writing good things about books and Bogleheads. And so I'd like to congratulate Taylor on his new Bogleheads book, which is doing very well. I will say the Bogleheads seem to love it. You know, you read the responses on Amazon and they're just so enthusiastic. I didn't have a chance to look and see how well it's doing at the box office, but it's fine. It's a good book and it was my honor to write the forwards. So let's talk a little bit about speeches. One of the more interesting ones came shortly after Bogleheads, 16. And if you can look down at the bottom with that big black thing, you'll see two things of note. A major address by John C. Bogle and a special introduction by Chairman Jay Clayton of the SEC. As to the major, I didn't know what I was gonna write about until I got the program. And you know, I wasn't born yesterday. I thought, I guess I better give them a major speech. I mean, it's not what you would do. And so I didn't, it was actually good. And later printed in an essay form in the financial analyst journal. But even more interesting was special introduction. And I said to the people running the public company accounting board, accounting oversight board, had you ever talked Jay Clayton into coming over? He said, we didn't talk anyone. He called us up when he heard you were speaking here and said he would like to do the introduction. And I'm thinking, huh, or was it duh? And he gave this lovely speech and a short, sweet, and I'll just read you one paragraph which I think I can do. I guess I better get my binoculars on for this. You wanna put the second page up, man? He had three different ideas he wanted to talk about. One personal, one intellectual, and one professional. And I'll just read you the intellectual one. I love markets and the study of markets and both amazing things. They do and the failures and imperfect way, imperfectly. Mr. Bogle is a student of markets and the best kind of student who can see the change before they arrive and plan for them to make markets better. John has to make life better to a long-term individual retail investor. Mr. Bogle's every effort reflects that goal. Well, I must say I was basking in. I was sitting out there listening to it. And I just, I mean, I think it must be something almost without precedent. But a very nice guy, by the way. So that speech was the modern corporation and the public interest. And there's the essay that it was turned into. I often try and do that if the speech is any good. And this one goes way back at the beginning and goes back actually in my Princeton thesis or my Princeton studies of the role of investors in corporate governance. And so I was pretty happy with that. That was my third and three years lead article in the financial analyst journal the previous year, second quarter of 17 was a really good one. I think balancing professional values and business values. And they asked me to do a piece on this order. And I wasn't sure how to do it. So I went back and, to me, quite a compliment. And I went back and looked at some of the things I've written before. And it was stimulated, greatly stimulated by the fact that I'd given a speech called mutual funds, business or profession. And when I saw that, I knew immediately what a jackass I was. Because everything is both business and profession. Everything might be a little teeny weeny business and a big profession or a big little profession and a big business. But it has to be balanced. And that was the theme I used there. And so I was happy with that. And the year before that, I had a piece in the January, February of 16, again the lead article, about an indexing. And I can't believe this article was that big a success. But I said, when I was talking to them about the following article, they don't tell me anything about this in advance. I can't believe this was going to be the case. But I said to them, I understand this was the most popular article, most widely read article in the Financial Analysts Journal in 16. And they said, no, no, no, that's not true. It's the most widely read article in the history of the Financial Analysts Journal. I couldn't believe that. I like a good compliment every once in a while. And that's a good one. So then I'm still doing a little speaking. I'm cutting back, actually, a good bit. And so I'll be going to London in October, right after I get back from Mumbai, and then speaking to the Philadelphia Analysts, Philadelphia Country Club. No, I just lied to you. I will be doing a video to accept the financial news asset management award for lifetime achievement in London, be doing video. And I'll be doing video for the Morning Star investment conference in Mumbai. And God willing, I'll be able to do both videos at the same time because it's going to be very effective to do. So let's talk a little bit about business now. Let's talk first about, we've done this before, and these are updates, the index revolution. And you'll see that chart, those of you who've been here in previous years have seen it. And those lines get closer and closer to the semi-log scale. And I think one would expect them to cross probably in 2021, something like that. And indexing will then be the real driver of the mutual fund industry. It's gone from 10 million, that's 10 million over at the left, to 5.8 trillion, a growth rate of 36% a year and rather uncommonly high, while active manager has grown thanks to the market at 13%. Indexing share of mutual fund assets shown on this chart, you see in stock fund assets, it's already up to 44%. Just think about that when we talk about the index revolution. And that's the end of my subtitle. For state of course, my new book, Story of Vanguard and the Index Revolution. So it is a revolution. And those lines I think are going to keep rising and rising and rising. There are a lot of things that don't keep rising, they get interrupted. But I believe that these things will keep growing and indexing will become more and more important and make more and more of a mark on the industry and do better, better job for fund investors. Indexing, however, has taken two courses now. Traditional index funds, an acronym, which I have had absolutely no one else using. But I will continue to use it until hell freezes over. Thank you. And traditional index funds and exchange traded funds. And you can see what a tiny beginning it was, even as recently as 90. And don't forget we started the first index fund in 1975. So 15 years of patience and for the want of a better phrase, staying the course. And finally it begins to take off in the 90s and starts to grow and grow and grow traditional index funds. That's the blue section of the chart. And right now ETFs have grown even faster, exchange traded funds. And they're quite different. I think I have a chart on this later. But there are intelligent ways of using ETFs and non-intelligent ways of UT using ETFs. And for that matter, intelligent and non-intelligent ways of using traditional index funds. But the big non-intelligent ways are concentrated in the ETF area. You open the Wall Street Journal and we have the most exciting news for investors. Someone somewhere has created a vegan ETF. You can buy stocks that don't like meat or something. So it's just a wild business. But it's been a rapidly growing business. And we just go back to 1998. You'll see in the next chart. Traditional index funds have been growing at 99%, ETFs 19% and thanks to the market active managers at 4% a year. So ETFs have replaced have replaced traditional index fund as the main source of indexing. Now that brings up an interesting, fascinating point. And that is where did the growth come from that got them bigger than the ETFs and this chart's a year old. But what you'll see there is ETF exchange-traded funds have had $1 trillion of their 1 trillion nine of assets coming from cash flow, people buying them and 790 billion coming from performance to the market. While traditional index funds have had cash flow only half as large, 500 billion, and market appreciation of 1.1 a trillion dollars to get to their 2 billion of growth. And I guess I said something wrong there. That's cash flow. And therefore when I looked into the why we got performance, which is measured by market appreciation on the two sides, we got an 8.4% investment return investor return compared to a 5.5% ETF return. And people will learn from that sooner or later. My new book is a little more tolerant of ETFs than some of my other words. I don't wanna be too tough on them because they do have good uses. It's just not used very nearly enough. But they're not the same and the institutional ownership is very different. If you look at the largest traditional index fund has turnover that's our fund of 21%. And then you look at the ETFs, the largest ETFs that turnover our turnovers 135%, which I would have said was awfully high until you look at BlackRock at 435% and State Street at 1,280% annual turnover. I think it's fair to say these are not long-term holders of stocks, they're long-term traders of stock, they're short-term traders of stock. So when you get into the really active ones, the hot shots, pro shares, 2,808% turnover of the shares of the fund and something called Directional 4,752% higher than anything else there. Does it just place us for people to speculate? It's very clear. We don't have an investor in there, do we? Not yet. Not yet. Okay, well, those that are hanging on to every word we'll get the investor number to you later. Now, what we do have going for us in the mutual fund industry and the index business and particularly the index business is people are always trying to beat the market. They don't realize how difficult it is. I mean, look at how difficult it is from simply saying how competitive mutual funds are, how competitive market indexes are compared to large groups of mutual funds. On average, I'm not sure the average is in there, but 95, I think it's 93%, yeah, there it is. 93% of the time, 93% of the funds are outperformed by their appropriate indexes. 93%. Just think of that. I mean, you wonder how anybody can do anything else. And what's of particular interest in that page, which is a little bit of a sequence here, is when you see we have, at the bottom line, chart 38, at the bottom line, we have the annual advantage of the index over the actively managed fund. And you can see these numbers running around 1.5%, 2%. I decided to do one other exercise here. Just say, how do we do it in large cap funds as a group, mid cap funds as a group, small cap funds as a group? And the index advantage is in large cap 1.5%, 4%, in mid cap 2.01%, and in small cap 2.24%. This is so intuitive, because we know some things about small cap funds, for example, one is their fees tend to be higher. Two, they tend to have a high turnover at a higher cost because they're dealing with smaller stocks. And so it's an intuitive answer that may even be right. But it's worth thinking about how it suggests that this is not random, what you've seen about the 93% outperformance, that it all comes out of expenses. Now I've been writing that since, I don't know, 1975, I guess, and believe it more than ever with each passing day and have a large number of allies on that same point. And I asked Mike, we weren't, we didn't get too far on this. But I said, I'd like to see on Google the number of times that mutual fund expenses, mutual fund costs, and mutual fund fees were mentioned in 1980. And how many times they were mentioned in 1917, in 2017, excuse me, 2080 in 2017. I'm sorry, 1980 in 2017. And we couldn't really quite get our hands on that, but it looks like it would have like 8,000%, 80,000% the numbers, it was just staggering. We're gonna continue to work on that and see if we can't get a better number for you. But it's become, the idea of expenses has become part of the business of investing. It's not a sideline. It's not something that no one even thought about, which they didn't when I came into this business. Nobody gave it a second thought. And now it's just about everything. So of course, yeah, the costs are there and yeah, the index wins. But I like to pick winners. So you pick winners. And here's a reversion to the mean chart, quite striking, that shows you how difficult it is to pick winners. If you visualize 20% for each of these columns is the highest return funds, which were 20% of the total. 14% of them continued to be in the highest quartile, highest quartile, I guess, quintile, excuse me. And how about worst, 20% fell into the low quintile and 24%, 44% in the lowest two return categories. So, and this is a very counter, this is a very intuitive chart too. It's a little surprising in some areas and it's probably overstated at one example. But the middle, like high and medium are almost exactly predictable in the middle. And they start in the middle and they ran in the middle. So it's at the extremes that you see this. And of those lower rated stocks, the beginning 20% lower rate, 30% had higher returns and only 16% had lower returns, lowest returns and only 10% had lower returns. That's 26% out of a possible 40. So you look at that and say, past performance doesn't get you very far. And in talking to Chairman Clayton on a different occasion, we talked about the possibility of banning the use of past performance figures because they're so misleading. And you know, we know, you know, we can't ban them. But people ought to have a much bigger caution than the future may not represent the past or something like that. There should be a big warning sign because the reality is when you bring out a really hot fund, you know that it will not repeat that record. You know that. And I think we ought to be able to come across that better. So, okay, so picking in this period and in recent period, it's been an indexed market, good market for indexing. So what happens when we get into a stock picker's market? Ooh, a stock picker's market. There's no such thing now or ever. Why? Because as I told the professor, each smart investor has to buy what it buys from a dumb investor, so-called dumb. There's just, I don't know why people don't get it. The reality of investing is you're betting against the person that's doing the other side of every trade. And so we may have stock pickers, good stock pickers doing well, but we will have bad stock pickers doing exactly as the same amount of badness as they had goodness. So it's just a realization of what the market is. And then there is let's leave the stock market and forget all those performance things and go to Bitcoin. And this is a happy example. My timing wasn't quite right, but I was invited to speak at the Council of Foreign Relations in New York in November 28th, 17. And I was asked some of, first question, first question I was asked. Of course it was New York City and a lot of financial people in the room, big crowd. And someone said, what did I think of Bitcoin? And I answered with my usual tact, avoid it like the plague. And so how good was that advice? I also added, and don't tell me I'm wrong when it gets to 20,000. I'll tell you what it's worth when it gets to a dollar. Might as well be extreme. And it got to 20,000 or almost 20,000 a week or two later. And there's the descent. It's just a speculation. So maybe it will do well, maybe it won't because speculators control their own returns. And they, things get bit up, they don't. There's no fundamental value here. And so if you have a little tiny bit of Bitcoin, I wouldn't con you out of it, but I'm disinclined to do it at all. You can imagine I wouldn't dream of doing it myself. It's one more speculation. You don't need that. And now we're gonna turn to a little different subject, factor investing. And I wanna start off with the big factor, value stocks versus growth stocks. And this is the chart that got me into all that trouble in Larry Siegel's article. And you can see right here what I'm saying, and that is up until 1972. Value did much better, 10.7% return per say 0.8. When you take it over all those years, almost, what would that be, 32, 33 years, or is it 40? Well, you do the math for me, mate. And it's the difference is staggering. Why would anybody buy anything but value? Oh, there we are, it's right there. Well, even for the full period today, it's 11.3 and 9.2. And so value is worth a million 141. I'm sorry, we should have these in dollars, but it's up a million, 491,000%, and growth is up a mere 269,000%. That's the full period in the chart, 28 to 17. We're talking about 90 years. But look what happens in the chart. The advantage of value is steady, moderate, all the way up until 1972. And that's where the big advantage is. And then it's pretty quickly gonna come to an end. And if you go back to 1973, it's an all-time high, that's the ratio of one to the other. And now it's 5.5. And then it was 4.5 and it looks like 1980. So basically since 19, let's see if I've got this right. Well, 1999, let's use the number on the chart. Value has done 6%, 1999, that doesn't look right. Is that right, right? 62 and 48. But if you look at 1988, then 1999, value 21.3. I'm sorry, value 15.9 and growth 21. So you can see there is cycles of growth. And this is what got me into all that trouble with Larry Swedrow. First he didn't under, he said, I picked this chart from mutual funds, value and growth. And I didn't, but it doesn't, nobody knows whether value will do better than growth. All I was trying to do was illuminate the fact that if you think something will be better forever, it's highly unlikely that it will be better forever. And when you break down things, and I love this old one-on-one chart we call it, sometimes the boggle chart, because that shows you, if you're starting to look at something and say how did growth and value do, and you see 11.3% versus 9.2, it's fact, but it's so different when you look at the various cycles of value and growth. I mean, it's just, it looks like randomness to me. So I don't believe it. However, another vanguard first is we created the first two factor funds. 1993, I had said in a speech a year or so before that the creation of growth and value index funds awaits only the creation of growth and value indexes. And when Standard and Poor's created them in 1993, we quickly started our two funds. They happened to be the two oldest and the two largest so-called strategic beta funds, factor funds, whatever. Don't be mad at me for that. What I did was I thought very rational, and that is you could accumulate, it was not a terrible strategy, you accumulate money in growth funds where you had a lower income and therefore lower tax deduction until you retire and then you go into value index funds, have a higher yield which you want then, a need then, a little lower volatility, and a much higher income. So that was the reason for creating them. And when I did, I was not born yesterday. I said, don't trade them. The returns over the next 25 years are have to be the same, growth and value. I'm not sure how many people would have said that, but if you read the end of this, resist the temptation to abandon, this is from a 1994 annual report, to abandon one strategy and move to another inevitably after performance disappointments. And the next year I was even stronger in my trying to remind investors that these are not to be traded, they're not factor funds in the sense that you think value is doing better in growth, or growth is doing better in value. I'm gonna read most of this. You may recall, and I mentioned to you one year ago the various market segments seem to enjoy cycles of superiority in their unpredictable returns, but over longer periods, their respective returns tend to converge to be sure investors must stick to their objectives with consistency and firmness, ignoring the siren songs that suggest moving money back and forth from one segment to another will result in a sustainable advantage. Such market timing is all too likely to be self-defeating. Whichever of the trust portfolios you have selected, a long-term steady as she goes approach is virtually certain to be the most productive strategy. Now the record, well my guess, I mean this is really a good guess, that the returns would be the same over that 25 year period, 24 year period. As certainly came true, growth index fund 9.52% and value index fund 9.64%. You really can't get much closer than that. You know I don't know if I was really making a prediction, but it certainly came out nicely for the funds first quarter century. But look at the investor returns below those 952 and 964. The investor, these are investor returns, not fund returns. And the investors lag the fund by 2.2% a year in growth and by 1.3% in value. So the net result when you accumulate them is the investors fell short of the fund return by 385%, that's just accumulating all those 2s and 1s and in value index they fell 264% short. Now that's, those are, if there's any of me, what more information do you need to say it's just not a good idea to have funds that are traded because people go with the hot fund of the day. And so overall, I won't spend too much time on this chart which has too many numbers. That's my fault, not anybody else's. But just take a look at the bottom line on this idea of long term value advantage. And you can see in 2014 through 2018, the value lost in 2014, lost in 2015, lost big in 2016, lost in 2017 and lost in 2018. That is a lot of losses for people that think their future is in value which has began with all these factor funds back in around 2014 is when factor funds started to come into play. It's what you expect to happen when something gets popular and sometimes it doesn't, sometimes it doesn't all admit that but when something gets popular, it's probably a good idea to avoid it. And when mutual fund companies are advertising and hyping and promoting these funds and even giving them shaky records by buying new issues and stuff when they're small, you want to avoid that as much as you can but there we are looking down the chart, the Vanguard Growth Index, 86 million, almost twice as big as contender and Value Index, almost twice as big as its big contender. So these two lousy ideas prove to be the two ideas which together make sense separately do not make sense. And yet here we have what you see there and that is the, it's not anywhere near extreme, I'll admit that as I expected but you can see that in the Value Index you shoot up from 2.1 billion I guess in 2015, 8.4 billion in 2018 is all this catches on but I think it will go down and you can see that the other value funds, another number of the other value funds category have gone down. So just one more argument and I know I don't need to make it here to buying and holding the market forever. Don't shift, stay the course. You've heard that before. Now Vanguard recently brought out some new factor funds to which Bloomberg said, add the hot sauce, hold the bogey. I think that's a very accurate description. They've actually done okay. There's their return in short term, March through August and they've done very nicely in performance but for better or for worse, they have not attracted much investor attention. You will see that Value is the biggest but all these other things, I'm sorry Value is the biggest individual factor and when they're all collected, that's even bigger but they're all on the million dollar mark and that's small change for us. So I take, I guess some comfort from that and let me just say this. I try to avoid criticizing Vanguard as much as I possibly can. I can never, never say something that I believe to be untrue and so we have arguments about size and I get in trouble. I hear it never directly from anybody but I hear when I say Vanguard may be getting too big and I get criticism for that to which I respond in my usual tactful way. If every member of our top management isn't worried about getting too big, they should be fired. Did I make myself clear? And another one is International versus US. I don't know if Jason is here today but he had a very good article about it last week. Is he here? Where are you, Jason? I just stepped out. Well that was a hell of a time to do that. I'm not, you can tell him I gave him an accolade but he said in his article and I'm now on the S&P versus EFA cumulative returns, that one on the one chart that you shouldn't write off international or non-US I should say much more accurately. And there's nothing, nothing about it we're saying that at all. He may be right, he may be wrong. I may be right, I may be wrong but the first time I made my prediction in 1993 was in my book Bogo on Mutual Funds and I talked about balance and diversification and I said you do not need to own any non-US stocks. Gave my reasoning. And if you do want to own non-US stocks, no more than 20%. That turned out to be a little bit like growth in value. A remarkable impression comment because over the next from 1993 to today to this date, roughly, the S&P is up 9.8% a year and the EFA is up 6.2% a year. Now, like so many other things, those little percentages conceal so much if you accumulate those percents. Those that stuck with the S&P 500 had a 904% gain and those that stayed in EFA had a 341% gain. That's a huge difference and I don't think ever make that up, not for a long time anyway. But when Jason says you should not give up on non-US, I'm inclined to agree with him because when something has done so well for so long, I mean, look at that trend from about 2005 to 2018 and look at the overall trend from 1993 to 2018 with that one interruption. And it seems it's not gonna go on forever but I'm still a US market, I believe it myself. Now, let's talk about competition. Vanguard and the mutual fund marketplace and something difficult's going on here. I presume it will persist for the end of the year but I don't even know that. Look at Vanguard's cash flows. These are annualized. The 2018 data are annualized and from 359 billion inflow last year, it looks like we'll do more than around 212 billion this year. That's a big drop. I think when I talked to you last year and we were at the 359 billion mark, I raised the question of what is enough? Well, apparently 359 billion is enough. And I don't regard this with any panic or any concern. I regard it as natural and this business is getting more and more competitive and I'll show you that in a second. But I can't tell you that that gap is gonna hold through the year. We still have September, October and November and December but for the first eight months, annualized, we're way behind last year and I'm sure we'll end the year behind last year, no matter what. Now, when we look at that cash flow slow down and this is year to date, we didn't annualize these data and you'll see that in 2017, we did this year to date. I can't even read my own writing. Our volume on traditional index funds is now, that would be our big strength, is now from 137 billion to 75 billion. 75 billion, 75 billion and we're sorry about it. Our ETFs are down even more. 94 billion and 49 billion and our total funds are down by more than half. 244 billion, 212 billion, that's essentially what you saw in the previous chart. So when you look at the overall picture, you'll see that it's, except for TI apps, traditional index funds, where our market share is going from 81% to 60% and that may be some big liquidations from, I just don't know, maybe liquidations up, maybe volumes down, but it's certainly a warning sign and our ETFs were 33% of ETF business last year and 35% for the first eight months this year. So that's actually improving and our total share of mutual fund business, despite that big drop, is at 53%. And I don't think it's possible. We have an industry issue as well as to some extent, at least a Vanguard issue. And we're always gonna be based on the industry one way or the other. And if the industry does well, we will do well, maybe better, maybe worse, but well and the same in reverse and vice versa. So it's gotten to be a very competitive business, you know all that. Most recently, Fidelity with zero funds and they even have zero in the name of the funds. They can't very easily walk away from it. So they're gonna be selling their index funds at zero and they've reduced accordingly their other funds. And that's gonna be tough competition. Particularly when you get into the million or two million or three million or four million, that's gonna be tough competition for new business. And I think not, I hope not for old business because if somebody with three million dollars with a cost basis of one million shifts into Fidelity and pays a 26% tax on two million dollars, it's gonna take a long time for that one 0.1% or 0.4% to be justified that saving. So it's not the end of the world. And it is, when you think about it, and I like to look at things this way. I think, what would I do if I was in the box that Fidelity was in? You know, they mocked the index fund at the beginning. Ned Johnson said, our clients would never be satisfied with market returns and they weren't getting them either. That's another story. And so now they are on the bandwagon. And so we'll talk about, there's another little chart about what you'll show Fidelity, but they've clearly made an effort or making an effort to make a big show in the index business and make nothing, make nothing. Well, how is that possible? Because the rest of their business last year, well, business was not just the fund business, but the record keeping business. So had a net profit, operating profit, was it 2.9? Was that a yes? And the profit of their company is 2.9 billion. And it really doesn't matter whether they bring in this money at zero basis points or two basis points or three. It's gonna be a big loss leader for them, but they've got this huge package. And so it's what I would do, I think, of our Fidelity. You know, you gotta break in, you blew it for all those years. Let's do something wild and dramatic and advertise the hell out of it. And so that's what they have done. Nonetheless, we still dominate the industry cash flow vanguard. Up to date, it's amazing that since 2015, actually since 2014, January of 2015, the industry has done 1.2 trillion dollars of which vanguard has done 961 billion. And all other firms put together 241 billion. So we've been doing 80%, 80% of me, it's so unprecedented. It almost takes your breath away. But you know it will not continue. Anyone that thought that would continue was just a damn fool. Because things don't go on forever. Trees don't go to the sky, you've heard all the things. But indexing is still the key to what we do here at vanguard, I guess I'm still allowed to say we. And you can see that it's helped our whole business and we started at 5.9% market share back in 74 and stock and bond funds only. And actually went down to 1986. I forget how I explained that in 1986, but I probably didn't talk about it. That would be more likely for me. Talk about how much our assets have grown, how much our shares has fallen. And then it's been onward and upward, almost every year, if not every year, higher market share. At 24.6, no one else has ever gotten anywhere. Close to that, the old industry maximum was 15% and we're way ahead of that. So that is going to be very hard to sustain in a more competitive world. So let's see what the competitive world looks like. Here are the assets of our large competitors. We were, at this time, 4.9 trillion, fidelity 2.1 trillion. So we're 2.8, 2.8, am I doing this right? 2.8 trillion larger than fidelity. And we were 204 billion back at the beginning of that chart. So that's one of the most remarkable turnarounds and gives me a lot of comfort in the sense that it's helped a lot of people to invest more wisely. You can see BlackRock is growing steadily, but still even smaller in fidelity. American funds, which uses stock brokers very widely, is kind of holding its own on assets and losing market share. And then the new inference, State Street is of course 751 billion, is by and large an index fund. So we have Vanguard, BlackRock and State Street. All the big three of indexing, I'll come through exchange traded funds. So I also thought we didn't do this, but we showed you that chart last year. But I thought we'd do this, show this chart. These are kind of the winners of the last 18 years, this century so far. And here are people who don't look like such good winners. You can see they've grown a lot, starting with Invesco, and that's the green line. They've grown from 297 to 434 billion, way behind the industry. Putnam, poor Putnam, I mean, I tried to get them to mutualize and you probably heard that. It's in the new book, I tell the story of trying to get them to mutualize. And their assets have gone from 234 billion to 76 billion. They're down, what would that be, 60% or something. And they're 80%, I don't know, you do the percent for me, Mike. Actually down in assets in this boom period for everybody else. And I know this proud old name went the wrong way and is paying the price for it. And anybody that looks at that chart from Vanguard who doesn't realize there is such a thing as the wrong way and we better keep doing it the right way or we will be doing exactly the same thing. And Janice had its ups and downs, as you can see. I guess that's the green line and it's down a little bit after a big bump in 2006. I think that's, they're just steadily down. The one that stands out here is of course PIMCO. Started at 55 billion and is now 375 billion, no mean accomplishment. But when they had the great Bill Gross, who I'll ask, my friend Bill Gross, is not doing so well with the Fundy Runs for Janice, but they had his and when he left, look at that, dropping assets. And that's another risk to which Vanguard is not exposed. We don't have anybody that was ever that dominant in assets. So there's the other side of the street, how difficult this business is. I wanna spend a minute now on a kind of a fun thing. And I was talking about two companies that were big competitors at the beginning of the period. When I came into this business, Vanguard being much smaller, 154 billion compared to 354 million compared to 386 million for Mass Investors Trust. And that, you will recall, was the company that was written up in the article in Fortune that caught my eye and brought me into this industry. So I have a kind of a kinship with them. At least I feel that way. And you can see that we had pretty much caught up to them by 1980 and now the semi-log chart doesn't really do justice to the change. But the numbers speak for themselves. We were both 2.6 billion in 1980 and now we're 4.6 trillion and they are 234 million dollars, 234 billion. God, I can't keep the damn thing straight. I must be getting old. It's fascinating to see how that could happen. And that's this next chart, which puts it into a little different perspective. That's market share for the two of us. 15% MIT and now Mass Financial, they brought out a new company that ran MIT and other funds. 15%, 7%, 3%, 1%. They really can't get any, you can get lower than 1%. But they're just kind of holding their own now, which you can see 1% in 2010, 1% in 2018, where Vanguard is six, five, crosses the line, five, 15, 25. How could that have happened? Well, read the note in the middle. From through 1969, Mass Financial was run by its own trustees. It was sort of a quasi-Vanguard. They didn't do distribution or anything and they didn't do administration, but the trustees ran it. And it was very cheap. Expense ratio in 1969 was 0.20. Then they went private. The trustees and their wisdom privatized the company and gave themselves the stock. Trustees give themselves the stock. I mean, I find that kind of not so good. And the expense ratio immediately goes up to 0.75, not immediately, but in a decade. And then, not satisfied, I guess, with how well they're doing, they sell to some life of Canada. So in 1980, since 1980, they've been owned by a conglomerate, financial conglomerate, and the expense ratio has gone up to 1.2% for the average fund. That's six times what it was in 1969 when these lines began to think about crossing. So what about Vanguard? We were private until 1960, expense ratio of 41. We were public until 1974, that was a bad thing, and the expense ratio went up to 0.79. And today, we are mutual, and the expense ratio is 0.15. So it's an interesting story that in 1974, early in the mid-1974, as our directors at Wellington, we're trying to figure out the best way whether to go along with my idea to mutualize. And so, of course, they went up to Boston to see the trustees of Mass Investors Trust. And the trustees of Mass Investors Trust said to them, you guys must be crazy. We just did the opposite thing. We know what's going on. We did the opposite, and here it is. You tell me who's crazy there. So, but they stood that, and the directors blessed them. And it all lies in, I think, mutualization, trying to run mutual funds for their shareholders and not for their managers. And we'll hear more and more and more about that. So Vanguard's share of index assets keeps rising. Believe it or not, I mean, we're at 84% back in 1985. We didn't have much competition at all, and we dropped to 44%. But since 2006, we are actually going over the 50% mark in index fund total assets. That number is going to come down. Our regular share of assets is in traditional index fund. Obviously, my choice as a way to invest is come down a little bit, but our huge growth in ETF share of ETF index assets is all the way up to 35% now. So it's all different, and we have a little problem. Of concentration, and I'll talk about that in a minute, a little more. But what's my time? Is it okay if I go on a little bit longer? I thought you'd say that. Sorry, just too much to cover. We have an issue about the concentration of index fund assets in three firms. And I have used the word oligopoly, which I think is the correct word, or our management properly, perhaps. Doesn't like the term oligopoly, but certainly the term big three fits this with them dominated by ETFs entirely. And we're up there because of our share of the TIF market. And so you see the big three with 71, 80% of total index assets. And that is a lot of concentration. And then there's a lot of firms. But oligopoly usually is firms that get together and keep prices high. And the problem with this oligopoly of such a B is that we keep prices so low that no other providers wanna enter the business, except Fidelity, and they have their own entry way to do it, and they will become more important. So they will become one of the big four, I think, in a period of a decade. So concentration of assets, I'm gonna skip that one that just said, talked about Fidelity is in there, 12% of the TIF business, and Fidelity's equity assets are now 25% of their total, index assets are 25% of their total equity assets. That's growing a lot. But there are threats to the index fund, and they are big threats. And I don't know, can I have that sheet, Mike? I don't have the same thing you do. Do you have it handy? We won't wait. The first one is there's a big move, academic move, to ban the ownership, common ownership of funds in a given industry. That is to say, a fund can own, no more than one airline stock, one blank stock, one this. No large investor can own more than one company or industry. Now, that's in the abstract, I don't know what to call it, it's not ridiculous, but it's not true. We have probably seven airline stocks. By the way, the only example they ever use is the airlines, and other businesses are very different. But it would do away with the index fund, and the S&P 500 index fund would become the S&P 173, let me say. I've been after these writers for two years to tell me what that number is. Okay, we're gonna do what you say. How many stocks do we own? So I can tell you the S&P 500. And in two years, I have yet to get an answer. I know why it's so difficult. So they have their view that it's anti-competitive legal implications, the Clayton Act bans possible cooperation between, among companies, and they wanna argue that owning all airlines stocks could be using their example. In other words, we're telling the airlines keep prices high and keep wages low, and we'll make sure your competitors do the same. As if we had that much of a voice with the airlines. So there's that issue, and there's who decides what an industry is, it's very complicated, ends up probably being a government bureaucrat, and it would destroy the equity, it would destroy the S&P 500. And it would be a terrible problem for people like American funds, which has lots of holdings in each industry. But the worst impact would be on the large index funds. And they're well-meaning, perfectly decent people. Actually one of them is a friend of mine who was the valedictorian at Princeton in 2007. And he's still a friend of mine, and he's allowed to think what he wants, but they write pretty violently about, where they tell us that the index fund is the cause of the golden age and the gilded age that we had today. Well, that's a little pushy. The other threat is I'm gonna use this example, the hidden power of the big three. This is a concentration of ownership, the likelihood that in the near future, roughly 12 individuals, I would use a smaller number, will have practical power over the majority of U.S. public companies. And that is a concerning issue, a real issue, unlike the issue of common ownership. It's almost the other side. And think about that. They say 12, I'd say six individuals might be more like it, with a practical power to control the majority of U.S. public companies. You know, right now, Vanguard's about eight, BlackRock's about eight, and State Street's about four, and that's 20% now. How long will it take that 20% to go to 30%? I don't know, it's gonna have to slow down. And I think I can guarantee to you, this might sound like a funny statement, that we will never get there. U.S. public policy will never permit Vanguard, or any other large, giant institution, from having practical power over the majority of U.S. public companies. I can't tell you why it will happen. I can't tell you when it will happen, but I can tell you it will happen. It's just not gonna be allowed for a few individuals, really, chief executives of these management companies, these individuals to control American business. I mean, it would be absurd, who the hell are they? I mean, I was one of them, I know, I couldn't control American business. I wouldn't even want to think about trying. So that's yet two big issues, but I'm sure the S&P 500, as everybody knows, the greatest invention for the individual investor in the history of finance. Is it's, we're never gonna get a Congress to approve this kind of divestiture, leaving aside the tax impact and all that. So it's not gonna happen that way, but growth will slow down, and there may be a whole lot of new ways to deal with the issue of governance. I'm gonna skip the next two in the interest of time, it's about time. Just to say on these two, I'm just pointing out that we are really more of an index company than anybody. Knows or thinks, because so many of our stocks are so closely correlated with their target indexes or target competitive groups, and welling in fund, 97% of welling in funds performance is explained, for example, by the performance of the S&P 500, 65%, and the S&P, the Barclays Bloomberg Bond Index, Total Bond Market Index, 35%, and it's competitors too. So we have just about all of our big funds have that kind of a number, 95, 96, 97, prime cap's an exception, and a nice exception. Now, as to future returns, you've probably read what I've had to say about this. We're looking for, and we'll go through this quickly, Mike, 6%, 4% for stocks, and you can see 6% fundamental return, minus 2% speculative return, lower valuations, and for bonds, way below since 1974, 8% versus 3.5%. So I think combination of returns of bonds and stocks could be, and we will use this chart, could be more like 4%, compared to 12%, these are equities only, 12% over Vanguard's history, 12%. I mean, you guys that have been investors that time, most of it last, well, I've got 60 years here, nobody's been that, but 60 years, it's kind of an investor's lifetime today, and look what happens when you compound at 12% versus four, and the math is easy, you divide the number into 72 and see how often it will double. So at 12%, you double every six years, and at 4%, you double it every 18 years. So at 4%, after 60 years, your original dollar goes to $11, and at 12%, your original dollar goes to $898. So small differences in return or even big differences in return, the differences in return more or less than I expect, suggests that we are basically, our reasonable expectations are better save more money, we'll better save more money, better get more costs out of the equation. And so when I get to, I'm gonna go over to 72 now, I guess I'm not alone. My number for future equity returns are around 4%. It's shared by just about everybody, it's amazing. AQR, which is Cliff Asnes, 4.2%, Keith Amback, Chair of Canadian, who writes a really refined, thoughtful newsletter, 4.5%, BlackRock 4, Vanguard 3 to 5, GMO, that's Jeremy Grantham, minus 4.7, that's the only outlier. State Street 4.1, so do I take cover in this? Being the same as everybody else? No, because I was brought up with the idea that the crowd is always wrong. So who knows what to expect? You don't need to take that as gospel. And in the wrapping up, I'm gonna skip the wrapping up page and go to the book. And what number do you have for the Princeton? No, I wanna do, where does this go? All right, okay, now I'm out of the book. This will be a little fun way to end. I chose the title of Stay the Course after a foray into a couplet by Johnny Cash, which ends, the songs I sang will still be sung. And everybody hated the title except me. And that may be even more determined to do it. And then Johnny Cash to the state won $25,000 for the use of that. And I told the publisher, was about to tell the publisher, tell them 2,500 and that's it, we're out of here. And I woke up the next morning and I thought the hell with that, we're out of here anyway, so I changed it into a much better title. Stay the Course, the story of Vanguard and the Index Revolution. And it turns out to be not just an investor's motto, a winning investor's motto, Stay the Course for your investment program. But an entrepreneur's motto, a lot of it in the book is a lot about this, about how tough it is to really build a company out of nothing, to build a skeleton into a full body. And so it's also the title of a book as well as those mottos, those two different mottos for investors and for entrepreneurs. And here's the cover. I saw the cover of Jim Comey's book and I said to the publisher, I am a really pain in the neck. I said, I want the cover of my new book to look exactly like that. So if you think this looks exactly like Jim Comey's book cover, you're right. Now, we're running much too long, I'm sorry. We'll hand these out, I think. But we have great endorsements. The nicest one by far from Paul Volcker who really reveled in the book. Another one from Cliff Asnes. You'd think of competitor who's the end of alternative investments. Very big, a couple of hundred billion dollars. Might not like indexing, he loves indexing. And I think you could say he loves me. Jim Collins, another one best selling author of Good to Great, and co-author of Built to Last. And finally, the wonderful Andy Lowe, professor at MIT who I have a very close relationship with and interview with him and all that kind of thing. So it has a good heritage. It has a, stay the course, here's the table of contents. You won't be able to read them now. But it just takes Vanguard through various errors in the tough, it was not easy to build Vanguard. And it took a long time for indexing to catch on. And you'd be amazing, at least I was amazed at the number of things I had done that we had to do to stay alive. We had to create a lot of funds. And most people didn't like any of them. Everybody loved PrimeCap, by the way, afterward. So I wrote the book about around the idea of landmarks and with the seven or eight steps that had to be taken to get that little skeleton doing very little of anything when Vanguard started, the new company, 28 employees to get into the largest company in the world. And so was the landmarks kind of book. And I read it about the third time and I thought, this book really stinks. I didn't like the way it was written because it left out the most important thing of all. And that is the character of Vanguard, what I tried to build into this firm in terms of people, including all of you, including the people that worked there and work here. And all of our shareholders. And so I added a chapter called Caring, the Founder's Legacy. And then I changed the earlier chapters, amended them. And I think we actually have a pretty good book. That's the first part, that's the guts of the book, the first 10 chapters. Part two is chapters on the individual funds. You can talk about Vanguard, they'll help read those over. But if you don't talk about Welling and Fund, if you don't talk about the Index Fund, if you don't talk about the Windsor Funds, don't talk about the Bond Funds, the Prime Cap Funds. And then chapter 16, The Funds That Failed. This book is, by the time you get through reading this book, if you do, you'll think that boggle is probably the biggest jerk ever to come across. I linger on my mistakes of which there have been so many. And then part three, the Future of Investment Management. With the last minute, only 10 days ago, I decided to change that from being one chapter to three. So the three chapters of the fund industry becomes mutual. The challenge to the S&P 500 Index Fund, which I've discussed, and then chapter 19 is the Financial Institutions Act of 2030. We will get new legislation, because the old legislation doesn't fit the new industry. So I thought I'd learn about the Future of Investment Management by having a private seminar. I picked Princeton University to do it in, and invited the smartest people, most independent people I knew, a very small group. You want to put them up? There we are. And there's Cliff Asnash, you'll see. There's Gus Sorter. I don't know where it is. Here it is. No, here we are. I can't see what you can see. There's Andy Lowe reading over. There's Eric Posner, who's one of the leaders of this, no more than one company per industry. I thought it was a good idea to invite the enemy. There's John Reckenthaler. Not there as a journalist, but as someone who knows the industry inside and out. There's me. There's Bert Malkiel. There's Ted Aronson, local investment advisor, very outspoken. There's Gus. There's Cliff Asnash. And there's the biggest contributor of all, Michael Lowe. And it was a fun day. We started around 10 and finished at 3. But this entire group sees very little change ahead. They think indexing is going to grow and grow and grow it. 75%. Now, I do not believe that. So I got it more as they're wrong. And so I wrote my chapter. I'd written my chapter before. I didn't see any reason to change it on the future of investment management. That was the subject of the forum. But it was an interesting day to see all of us together, advocates and detractors, really good minds, really outspoken minds, people that are not known for shyness, led by a person that was not known for shyness, I think. So that's the story of the last chapter. Then there are a bunch of photos. You'll like them. I stuck two in here. One is these two handsome guys. One is Blair. And one is Princeton. Grab your book pictures. Got even a good-looking kid at Blair. And then he started to get fat. And then as a peculiar coincidence, at the Nassau Inn in Princeton, Nassau, I guess Nassau Inn, the Yankee Doodle Taproom has kind of a wall of fame, famous Princetonians. And when I was at Princeton, they were all football players and maybe a couple of basketball players thrown in. But they've now changed that. And they have business people there. And right next to each other are what I call two Princeton entrepreneurs. One is me, people who have been the most destructive entrepreneurs of the modern age, right next to each other on the wall of fame of the Yankee Doodle Taproom. There's John C. Bogle. And that's for those who can't read it or don't recognize him, is Jeffrey P. Bezos. So he did a little better financially than I did. And you'll also enjoy. This is just a fun one. My mother, who had only lived by another year, took a picture of me with a little brownie hawkeye. And getting my AB degree in 1951, you'll see that over in the left here. And then when I got my honorary doctor of laws degree, there I am again, two different degrees. And it's fun to have that little run-through time. And now I am with a decently long quote at the end. Let me say that the book ends with something that I think all of you will enjoy more than any else in the book. I decided I wanted to incorporate a sort of memoir, A. And B, I decided I didn't want to write anymore. Writing is very hard for me to do, particularly at this age, I think. And you have transitions. You've got to worry about repetition. So I didn't want to write a memoir as such. So what I decided to do for the first time in history, and I think this will never be adopted by anybody else, but if it is, it worked well for me, I just took the alphabet and went right through it and things that mattered to me during my life. Anywhere from advice to, I don't know, there's obviously four or five paragraphs about Princeton, four or five paragraphs about Blair, two or three paragraphs about American Indian College. And then quotes that I've liked. The shortest one is under G. I have big initials there. Under G, God. And it says, is there a God? Yes, that's it. I mean, I didn't know what to add to that. And I'm just going to quickly, it's a quirky way of doing it. But it's sort of fun. And some is very sad, because there's all been a lot of sadness in my life. I mean, I have far more joy than sadness, but you'll see it, it'll come out to you. And then I wanted this to be the last quote. And so it's under, it was going to be the universe, but then work would come next. And I wanted this to be the last quote. So this is the final write-up in the memoir, part of the book, and the end of the book. You and me in the universe. Our Earth is but a single planet in the solar system, which in turn is part of the Milky Way galaxy, our huge galaxy, 100,000 or so light years in diameter. Our galaxy in turn is but one of at least 200 billion galaxies in our universe, each galaxy with more than 100 billion stars. If you want to measure the relative importance of a single human being, just do the math. And yet, and yet, to dwell on our own insignificance in the grand scheme of things doesn't seem particularly useful. There's work to be done here on Earth, and we best get on with it. We might begin by acting before it's too late to save our own planet. Beyond that, our task is to live productive lives, to raise our families, to contribute to our communities, and to serve our nation and our global society. That's the end of the book, and that is at tortuous end my remarks this morning. Thanks for bearing with me. It's so great to be with you all, and I thank you for another standing o. I don't know how many more years I can do this. Nobody knows. I'm not saying I can, but you'll see a little poetry at the beginning of my book, which suggests it's just a fun book. Actually, I love where it is now. I hope it'll come out. But it's just such a thrill to be able to be with you. I don't know if I'd make it or not. And to see all of you, to get your enthusiasm, really feel it, as well as hear it and see it, just like to thank you very much. That means everything to me in my validates, my long career. Thank you. Thank you, Jack.