Tuesday, 10 March 2015 - 20:00
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Seed Weekly - Investment Greats: Jack Bogle
John Clifton “Jack” Bogle is most famous for creating the world very first index fund – the Vanguard 500 in 1976. Bogle founded The Vanguard Group in 1974 which currently operates as one of the world’s largest mutual fund and Exchange Traded Fund (ETF) providers.
Jack Bogle, currently 85, graduated with a cum laude degree in economics from Princeton University in 1951. He studied mutual funds in depth during his university days, which grew into his senior-year economics thesis which laid the conceptual groundwork for the index mutual fund. He started working for an advisory business, climbing the ranks up to chairman. In 1974 he was fired for an “extremely unwise” merger decision he approved. "The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot." He started Vanguard that same year.
It's nearly 40 years since Bogle pushed long and hard to get Vanguard to introduce the first low-cost index mutual fund. At the time, some people dubbed it Bogle’s Folly. Now, there's almost $2 trillion invested in U.S. index-based funds and exchange traded funds.
Bogle pioneered the no-load mutual fund and low-cost index investing for millions of investors. Known for putting the interest of the investor first, he has constructively criticized the US fund management industry for charging too high fees.
His investment style is simple - capture market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed. He is famous for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds.
He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge. Bogle argues for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:
1. Select low-cost index funds
2. Carefully consider the added costs of advice
3. Do not overrate past fund performance
4. Use past performance to determine consistency and risk
5. Beware of stars (as in, star mutual fund managers)
6. Beware of asset size
7. Don't own too many funds
8. Buy your fund portfolio - and hold it.
In a recent interview he mentions that one primal role of one’s financial adviser should be to keep the investor from making bad decision. "If you have trouble imaging a 20% loss in the stock market, you shouldn't be in stocks." "When reward is at its pinnacle, risk is near at hand."
Again it comes down to keeping your investments strategy simple, minimize costs, invest for the long term and make rational (not emotional) decisions. "Time is your friend; impulse is your enemy.”
Jack Bogel is the author of a few investment related books, his most famous being the bestselling Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (1999) which is considered an investment classic. Bogle retired in 1999 from the Vanguard group but continues as president of Vanguard's Bogle Financial Markets Research Centre to write and lecture on investment issues and is widely recognized as "the conscience" of the mutual fund industry.
Even Warren Buffett recommended Vanguard for his estate, in his 2013 letter to shareholders: My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.
Keep well,
Lourens Rabé
Sources:
Investopedia; Bloomberg; Wikipedia
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 10 Mar 2015
Top News
South Africa's rand extended losses against the dollar on Tuesday, falling to a new 13-year low as emerging market currencies tumbled on heightened expectations that U.S. interest rates could rise by mid year. Full story
South Africa's rand extended losses against the dollar to 1.5 percent on Tuesday, falling to a new 13-year low as emerging market currencies tumbled on heightened expectations that U.S. interest rates could rise by mid year. Full story |
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Likely Democratic presidential candidate Hillary Clinton will try to defuse a controversy over her use of a private email account for official business as U.S. secretary of state at a news conference on Tuesday. Full storyPresident Nicolas Maduro was
seeking special decree powers from Venezuela's parliament on
Tuesday in response to new U.S. sanctions, drawing opposition
protests of a power-grab. Full storyIraqi troops and militias drove Islamic State insurgents out of the town of al-Alam on Tuesday, clearing a final hurdle before a planned assault on Saddam Hussein's home city of Tikrit in their biggest offensive yet against the ultra-radical group. Full story |
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Markets | The U.S. dollar rallied
across the board on Tuesday as the prospect of the first rise in
U.S. interest rates in almost a. . . Full story | | Gold fell to a three-month low
on Tuesday due to the dollar's rise to its highest in nearly 12
years and renewed expectations. . . Full story | | Hong Kong shares followed
mainland stocks lower on Tuesday to end at their lowest in
nearly two months, led by banks on worries. . . Full story | | China shares closed weaker on
Tuesday as banking stocks stepped back after Monday's surge, as
data showed increased factory sector deflation hurting the
pricing. . . Full story |
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| Japan's Nikkei fell to a near
two-week low in volatile trade on Tuesday, erasing earlier gains
as banks were hit hard by a. . . Full story | | Australian shares reversed
early gains to end flat on Tuesday and the NZX sagged after
police said threats had been made to poison. . . Full story | | Australian shares are likely to
recover some losses on Tuesday a day after suffering their
biggest one-day fall in two months thanks to. . . Full story | | U.S. stocks rose on Monday on
the back of billion-dollar M&A deals, while U.S. and euro zone
bond prices rose as the European. . . Full story |
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SA Business | South Africa's platinum producer Lonmin has completed repairs and restarted operations at one of its furnaces and has ramped up production. . . Full story | | South African stocks sank for a second session in a row on Tuesday, pulled down once again by a global resources. . . Full story | | African oil explorers will keep drilling in select locations such as onshore east Africa and less complex projects off the West. . . Full story | | South Africa's failed African Bank, which is under administration after racking up huge amounts of bad debt, will now list the. . . Full story |
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| Debt issuance in emerging
markets has got off to the slowest start to a year since 2010,
dropping by more than a third. . . Full story | | Emerging market
currencies sold off on Tuesday as a combination of U.S. interest
rate fears, Chinese data and Greece concerns drove the Mexican
peso. . . Full story | | Emerging currencies sold off
further on Tuesday with Turkey's lira and South Africa's rand
hitting multi-year lows against a stronger dollar as
expectations of. . . Full story | | South Africa's quarterly business confidence index stumbled in the first quarter of 2015 due to the negative impact of power outages,. . . Full story |
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| South Africa's Finance Minister Nhlanhla Nene said the government was making "good progress" in winding up failed African Bank, which is under administration after racking up huge amounts of bad debt.. . . Full story | | South African banking group FirstRand reported a 13 percent rise in first-half earnings on Tuesday, underpinned by growth in advances and deposits.. . . Full story |
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Company News | Post the recent Vukile offer process to Synergy unitholders, Synergy has been constituted as a subsidiary of Vukile. Vukile currently holds. . . Full story | | In accordance with paragraph 2.6A(b) of the JSE Ltd. Listings Requirements, shareholders are hereby advised that Morvest has terminated Sasfin CapitalÆs. . . Full story | | The board of directors of CompClear (ôthe boardö) hereby notifies its shareholders that Mr Yehonasan Moshe Zulberg (ôMosheö) has been appointed. . . Full story | | Discovery shareholders are referred to the rights issue declaration announcement released on the Stock Exchange News Service (ôSENSö) on 24 February. . . Full story |
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| Discovery shareholders are referred to the announcements released on the Stock Exchange News Service (SENS) on 24 February 2015, relating to the unaudited interim results and cash dividend declaration for the. . . Full story | | Shareholders of PPC are referred to cautionary announcements published on the Stock Exchange News Service (ôSENSö) on 10 December 2014 and on 27 January 2015, regarding the non-binding proposal from AfriSam. . . Full story | | According to Business Day Sasfin indicated that it was looking to scale up its investment banking and start participating in underwriting shares rather than playing an advisory role. This is part. . . Full story |
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Company Results | Turnover grew to R99.8 billion (R98.3 billion). Profit from operations, joint ventures and associates rose to R30.0 billion (R21.5 billion). Profit. . . Full story | | Revenue for the interim period increased by 11% to R6.002 billion (2013: R5.400 billion). Gross profit rose by 12% to R2.671. . . Full story | | Total income increased by 13% to R476.1 million (2013: R420.2 million). Profit from operations rose to R111.8 million (2013: R88.8 million),. . . Full story | | The following results are the maiden interim results after the change in year-end. Gross rental income came in at EUR2.6 million.. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 52088.54 | -525.54 | -1.00% | JSE Top 40 | 17:00 | 46148.91 | -495.44 | -1.06% | JSE Gold | 17:00 | 1175.40 | 22.85 | 1.98% | JSE Financial | 17:00 | 43828.98 | -365.67 | -0.83% | JSE Industrial | 17:00 | 74215.02 | -667.27 | -0.89% | JSE Indust 25 | 17:00 | 65931.04 | -590.64 | -0.89% | JSE Resource | 17:00 | 41896.52 | -658.48 | -1.55% | DJ Futures | 19:58 | 17740.00 | -229.00 | -1.27% | DJ Ind | 19:58 | 17744.13 | -251.59 | -1.40% | SP 500 | 19:58 | 2053.34 | -26.09 | -1.25% | Nasdaq | 19:58 | 4882.65 | -59.79 | -1.21% | FTSE 100 | 17:36 | 6755.93 | -120.54 | -1.75% | DAX | 19:08 | 11500.38 | -81.73 | -0.71% | CAC40 | 19:08 | 4881.95 | -55.25 | -1.12% | Nikkei | 12:52 | 18665.11 | -125.44 | -0.67% | Shanghai | 09:28 | 3286.07 | -16.34 | -0.49% | Hang-Seng | 06:28 | 24015.60 | -107.45 | -0.45% | All Ords | 07:37 | 5794.30 | 1.30 | 0.02% | NZSE 50 | 06:48 | 5887.75 | -9.21 | -0.16% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1160.47 | -6.52 | -0.56% | Gold R | 19:58 | 14295.21 | 171.21 | 1.21% | Gold R/kg | 19:58 | 459500 | 4858 | 1.07% | Silver $ | 19:59 | 15.6600 | -.0720 | -0.46% | Platinum $ | 19:59 | 1129.55 | -15.95 | -1.39% | Palladium $ | 19:58 | 801.00 | -18.60 | -2.27% | R186 | 17:42 | 7.99 | .02 | 0.25% | R204 | 17:19 | 7.18 | .09 | 1.20% | R207 | 17:19 | 7.39 | .05 | 0.68% | Brent Crude | 19:58 | 56.67 | -3.06 | -5.12% | Rand / Dollar | 19:59 | 12.3092 | 0.2141 | 1.77% | Rand / Pound | 19:55 | 18.5508 | 0.2689 | 1.47% | Rand / Euro | 19:55 | 13.1892 | 0.0554 | 0.42% | Rand / NZD | 19:58 | 8.9632 | 0.0607 | 0.68% | Rand / AUD | 19:55 | 9.3929 | 0.0658 | 0.71% | Yen / Dollar | 19:59 | 121.0350 | -0.1750 | -0.14% | Euro / Dollar | 19:58 | 0.9329 | 0.0112 | 1.22% | Dollar / Euro | 19:59 | 1.0724 | -0.0131 | -1.20% | Pound / Dollar | 19:55 | 0.6620 | 0.0013 | 0.20% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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10/03/2015 | 102 | 252 | 68 | 422 | 310,301,845 | R21,058,064,475 | 325497 | 1587566 | 09/03/2015 | 82 | 277 | 52 | 411 | 225,321,946 | R16,620,180,358 | 242279 | 22154 | 06/03/2015 | 178 | 184 | 66 | 428 | 279,402,495 | R19,242,125,497 | 259591 | 372170 | 05/03/2015 | 203 | 164 | 62 | 429 | 339,148,857 | R24,286,597,312 | 293198 | 1390770 | 04/03/2015 | 156 | 200 | 58 | 414 | 217,455,793 | R15,360,823,975 | 204348 | 1219943 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 46,148.91 | -495.44 | -1.06% | Industrial | 74,215.02 | -667.27 | -0.89% | Mid Cap | 71,925.15 | -420.07 | -0.58% | Small Cap | 59,677.23 | -630.53 | -1.05% | Resource 20 | 41,896.52 | -658.48 | -1.55% | Industrial 25 | 65,931.04 | -590.64 | -0.89% | Financial 15 | 16,766.74 | -159.73 | -0.94% | Financial & Ind. 30 | 70,636.77 | -643.59 | -0.90% | All Share | 52,088.54 | -525.54 | -1.00% | Oil & Gas | 30,481.68 | -554.15 | -1.79% | Mining | 25,495.56 | -387.13 | -1.50% | Gold Mining | 1,175.40 | 22.85 | 1.98% | Platinum Mining | 31.15 | -1.15 | -3.56% | GENERAL MINING | 7,491.25 | -127.65 | -1.68% | Oil & Gas Producers | 16,389.43 | -297.96 | -1.79% | Basic Materials | 23,658.04 | -316.11 | -1.32% | Chemicals | 22,718.91 | -113.88 | -0.50% | Forestry & Paper | 41,006.30 | 48.30 | 0.12% | Industrial Metals | 10,951.34 | -413.41 | -3.64% | Industrials | 46,657.11 | -839.46 | -1.77% | General Industrials | 164.23 | -2.99 | -1.79% | Consumer Goods | 66,259.70 | -560.86 | -0.84% | Automobiles & Parts | 7,653.87 | 4.53 | 0.06% | Household Goods | 455.69 | -6 | -1.37% | Health Care | 11,107.78 | -260.11 | -2.29% | Beverages | 228.90 | -1.80 | -0.78% |
| | Index Name | RP | Move | % Move | Food Producers | 9,310.17 | -87.64 | -0.93% | Personal Goods | 1,009.45 | -10.99 | -1.08% | Consumer Services | 15,411.45 | -88.62 | -0.57% | General Retailers | 81,881.78 | -828.95 | -1.00% | Travel & Leisure | 6,349.49 | -162.29 | -2.49% | Media | 366.31 | .07 | 0.02% | Support Services | 3,003.03 | -5.18 | -0.17% | Telecommunications | 10,663.50 | -42.32 | -0.40% | Financials | 43,828.98 | -365.67 | -0.83% | Banks | 76,475.24 | -1214.78 | -1.56% | Non-life Insurance | 55,842.59 | 267.98 | 0.48% | Life Insurance | 42,917.21 | -223.52 | -0.52% | General Financial | 4,003.61 | -58.27 | -1.43% | Technology | 56,788.58 | 217.39 | 0.38% | SHARIAH TOP40 | 3,567.15 | -47 | -1.30% | FTSE/JSE SHARIAH ALL | 3,820.01 | -45 | -1.15% | COAL MINING | 12,989.41 | -680 | -4.98% | FTSE JSE Fledgling | 6,886.14 | -47 | -0.68% | FTSE/JSE Alt X | 1,501.64 | 22 | 1.51% | SA LISTED PROPERTY | 640.99 | | 0.28% | CAPPED PROPERTY | 553.92 | | 0.30% | RESOURCE | 22,966.43 | -361 | -1.55% | DIVIDEND PLUS | 236.54 | -2 | -0.91% | FTSE/JSE RAFI 40 | 9,770.21 | -89 | -0.90% | Capped Top 40 | 24,621.04 | -265 | -1.07% | Capped All Share | 26,420.25 | -267 | -1.00% | JSE TABACO | 8,726.13 | 2 | 0.02% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | EXX | EXXARO RESOURCES LIMITED | HOLD | 09/03/2015 | SBK | STANDARD BANK GROUP LIMIT... | BUY | 09/03/2015 | BVT | THE BIDVEST GROUP LIMITED | BUY | 09/03/2015 | SLM | SANLAM LIMITED | HOLD | 06/03/2015 | MRF | MERAFE RESOURCES LTD | BUY | 06/03/2015 |
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Results Expected** Expected | Company Name | Fin. Date | 11/03/2015 | ASCENDIS | December 2014 (Interim) | 11/03/2015 | BOWCALF | December 2014 (Interim) | 11/03/2015 | EOH | January 2015 (Interim) | 11/03/2015 | PINNACLE | December 2014 (Interim) | 11/03/2015 | RMBH | December 2014 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | BEE-SASOL | 09/03/15 | 01/04/15 | 13/04/15 | ZAR 7.0000 | SASOL | 09/03/15 | 01/04/15 | 13/04/15 | ZAR 7.0000 | A-V-I | 09/03/15 | 26/03/15 | 07/04/15 | ZAR 2.0000 | A-V-I | 09/03/15 | 26/03/15 | 07/04/15 | ZAR 1.3200 | SASFIN-P | 09/03/15 | 26/03/15 | 07/04/15 | ZAR 3.8374 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | KUMBA | 10/02/15 | 06/03/15 | 16/03/15 | ZAR 7.7300 | DSY B PREF | 19/02/15 | 06/03/15 | 16/03/15 | ZAR 4.6500 | TRUWTHS | 19/02/15 | 06/03/15 | 16/03/15 | ZAR 2.3600 | CITYLDG | 18/02/15 | 06/03/15 | 16/03/15 | ZAR 2.3000 | REMGRO | 19/02/15 | 06/03/15 | 16/03/15 | ZAR 1.6900 |
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Upcoming AGMs** Code | Company Name | Date | Status |
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