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The Clash of the Cultures: Investment vs. Speculation by Arthur Levitt Jr., John C. Bogle

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About This Book

In 1951, when I began my career, long-term investing was the mantra of the investment community. In 1974, when I founded Vanguard, that tenet still remained intact. But over the past several decades, the very nature of our nation’s financial sector has changed—and not for the better. A culture of short-term speculation has run rampant, superseding the culture of long-term investment that was dominant earlier in the post–World War II era. These two very different cultures have existed in the world of capital markets and capital formation all through history. But today’s model of capitalism has gotten out of balance, to the detriment of the investing public—indeed, to the ultimate detriment of our society.

As strategies focused on short-term speculation have crowded out strategies focused on long-term investment, the change has benefited financial sector insiders at the direct, arguably dollar-for-dollar, expense of their clients. In truth, that tension between investment and speculation is at the very heart of the great challenges we now face in Investment America and in Corporate America, challenges that could ultimately undermine the functioning of our financial markets and threaten the ability of our individual investor/citizens to build their wealth.

So, I’m deeply concerned with today’s ascendance of a culture of speculation over a culture of investment in our financial markets. I’m concerned as a member of the financial community, I’m concerned as a member ...

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