Spend five minutes watching CNBC, and your head will spin. A double stack of tickers lines the bottom of the screen. Numbers and letters fly past like express trains. Hosts and guests speak so quickly they barely pause for breath. Time is money! This is the stock market: fast and exciting, brought to you live!
On January 16 this year, John Bogle passed away at the age of 89. Mr. Bogle founded The Vanguard Group, which popularized index investing. Indexing is incredibly simple: just buy a proportionate slice of everything. Mr. Bogle said of index investing during a 2016 interview: "It is the essence of boredom. I'll concede it. If you're in investing for excitement, you are a damn fool. You're watching the market every day - up and down, 100-point - 200, 300, 400-point swings day after day. It's exciting, but it's meaningless."
We deeply respect Bogle’s ideas and we also subscribe to the “boredom” style of investing. We spend our days reading page after page of SEC filings in an attempt to tease out what makes some companies better than others, and we only buy the best. We love learning about businesses and developing spreadsheets to model their future performance. But make no mistake: this isn't exciting work and it won’t replace the fireworks on CNBC. Once we find investments, we hold them for long periods -- ideally, forever. This is the approach championed by Warren Buffet. His trades also tend to be dull: names like American Express and Coca-Cola are top holdings; Buffet bought them in 1964 and 1987, respectively.
Like Bogle and Buffet, we believe discipline, simplicity, and patience are all keys to successful investing. We will miss John Bogle, but his influence lives on in an industry which his “boring” products helped to revolutionize.