John Bogle on Investing: The First 50 Years

Part III

ECONOMICS AND IDEALISM: THE VANGUARD EXPERIMENT

THESE NEXT FIVE chapters describe how Vanguard has developed over the years. Together, they describe not only why and how the firm came to be formed, but the philosophical ideals inspiring our novel “mutualized” corporate structure, as well as the investment ideas and human values that have remained, to this day, at the very heart of our enterprise.

In Chapter 16, I present a short chronology of our history, focusing on the seemingly endless series of random accidents that made it possible to test my idealism, financial ideas, and organizational values on the hard anvil of the business world. These fortuitous events begin with the genesis of my Princeton senior thesis in 1949, followed by my first job, offered to me by my great mentor Walter L. Morgan; a failed merger, the happy event (as it turned out) of my being fired; the founding—and even the naming—of Vanguard in 1974. Each of these events offered the opportunity to take “the road less traveled by.” Without them, Vanguard would never have come into existence.

From the outset, given the unprecedented nature of our structure and strategy, I frankly referred to our mission as “The Vanguard Experiment,” part of the title of a speech I gave to the Federal Bar Association in March 1975, six months after our founding (Chapter 17). In it, I urged, perhaps too boldly, that our ...