The Most Successful Investor Of All Time
It's not who you think
Buffet. Munger. Dalio. Soros. Lynch. Wood.
These names represent the Mount Rushmore of savvy investors. These are the names that people think of when they think of the most successful investors of all time.
But not of them - not a single one of them - can hold a candle to Jack Bogle.
How might you copy Jack Bogle’s trades?
It’s not what you know that get’s you in trouble; it’s what you know that just ain’t so.
- Twain
NEWSFLASH
Jack Bogle's investment thesis from Princeton, written in 1951, lead to the creation of Vanguard. With $8.1T in AUM, Vanguard is worth almost DOUBLE Fidelity.
So you might ask, "How'd Jack be nimble? How'd Jack be quick? How'd Jack jump over the candlestick?"
Jack Bogle became the most successful investor of all time by leveraging Janusian Thinking.
The Worship of Janus
Janus was the Ancient Roman God of god of beginnings, gates, transitions, time, duality, doorways, passages, and endings. Janusian Thinking is the ability to think in contradictory terms - black white, up down, beginning end, or as Einstein thought, motion and rest. Naturally, thinking in opposites, polarities, and contradictions at the same time can be quite difficult for a child, let alone an adult.
What does this have to do with investing? Simple.
We used to think if you put a bunch of smart people in a room long enough they'd devise a system for investing that was fool-proof. Turns out that just isn't the case.
- Munger
Smart People Can't Invest For $hit
Conventional wisdom would tell you that smart people are smart investors. However, we now have enough data to show UNEQUIVOCALLY that this just isn't the case. The truth of the matter is, hedge funds do not outperform the S&P 500 over a time span of 15 years or longer.
Why is this the case? Because smart people believe that the market isn't being manipulated. The truth is, the smartest people on the planet manipulate markets instead of investing.
So the question is, how do you make money in manipulated markets? Simple: you do what Jack Bogle Did.
What Bogle Did
Bogle outperformed everyone by managing his portfolio like George Steinbrenner managed the New York Yankees: by buying the top 10 players and cutting the rest. He figured with the best line-up he’d win The World Series, and he was right. Now, did this make him a popular General Manager? Absolutely not. Did it win him championships? Absolutely.
In fact, famed GE CEO Jack Welch did the same thing, only this time with people. Every year, Welch instituted an HR policy that saw GE fire the bottom 10% of its staff. Sound cruel? Welch argued that the bottom 10% of his staff hated working at GE more than GE hated them working there.
Similarly, Jack Bogle invoked Janusian Thinking - the ability to think in opposites - to derive and execute the most successful trade of all time.
Bogle's thesis from Princeton is 1951 was derived from an exhaustive, data-driven study of the market. In his thesis, he proved that hedge funds couldn’t compete against the market. His solution?
Simple: invest in the top 500 companies. That's it. Whatever the top 500 companies were, that's what he invested in. If a company fell off the S&P 500, he'd sell that company and buy the company that took it's place. THAT'S IT.
So How Come Hedge Funds and Banks make so much money?
You bail them out every so often. Or haven’t you noticed.
How would Bogle Invest Today?
If Jack Bogle was alive today - and he wanted exposure to the digital currency market, how might he invest?
Simple: he'd buy the top 10 coins on coinmarketcap. Whenever a coin dropped from number 10 to number 11, he'd sell that coin and buy the coin that took it's place.
How do I execute a Bogle 3.0 Investment today?
Simple: hold the top ten coins, regardless of what their name might be. That’s it. C’est tout.
In His Own Words
