The most celebrated investor of our time, Warren Buffett, praises Jack Bogle, the founder of Vanguard:
“If a statue is ever erected to honor the person who has done the most for American investors, the handsdown choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. In his crusade, he amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing – or, as in our bet, less than nothing – of added value.
In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”
Follow the link below for Buffett’s commentary on passive versus active investing (starts on page 21). The Shareholder Letter is so focused on index investing on account of a wager Buffett made in 2005. He bet $500,000 that no investment professional could select five hedge funds that could collectively beat the Vanguard S&P 500 Index fund over a period of 10 years. Only one person stepped forward to take him up on it, and long story short, Buffett won the bet. The story is well worth the read and insights provided.