CAHPTER 3
TROUBLES BREWING
As Bogle had intended, after the merger Wellington Management Company got more aggressive in sales and also changed its investment approach. “The merger was working well,” recalled Bogle. “The best illustration was in Ivest Fund’s sales, which got 70 percent of all our new sales in 1968.” Ivest’s assets surged from $1 million at the end of 1961 to $50 million at the end of 1966, and further grew to $340 million by the end of 1968.
Doran and Thorndike were surprised to discover that Philadelphia, contrary to their initial expectations, actually had considerable investment talent. Still, certain that an unstructured, interactive organization would be more successful at creative investing, they were keen to reorganize the compartmentalized structure in Philadelphia. At least one initiative would cause trouble. Doran went to the Philadelphia offices on a weekend and moved offices around to break up old patterns and increase collaboration. As he later recalled, “Understandably, when they came in on Monday, some people were quite upset.”
One key move following the merger was to transform Wellington Fund, changing its mission from “conservation of principal, reasonable current income and profits without undue risk” to an ambiguous new mandate, “dynamic conservatism.” Whatever its meaning, this approach resulted in a two-thirds increase in portfolio turnover, from a low of 15 percent of the securities replaced every year to 25 percent, and a shift in the proportion invested in equities from 55 percent to at least 75 percent of the fund.
New, aggressive funds were launched in rapid succession over the next several years: Explorer Fund invested in small growth companies; Technivest Fund used “technical” market indicators; and Trustees’ Equity Fund, in stark contrast to its staid name, sought to capitalize on short-term market trends. John Neff’s dual-purpose fund, dubbed Gemini, had been launched in 1967. Gemini Fund was a closed-end fund with an innovation: half the shares received all of the dividends, and the other half received all of the capital gains. Insurance companies gobbled up the “income shares” because under the then current tax code, 85 percent of intercorporate dividends were tax-free. However, early investors who bought the “capital shares” to get the anticipated benefit of two-for-one leverage suffered badly.* Those shares fell in the following years’ bear market to a 40 percent discount from their depressed market value.
Wellington Management now had $2.6 billion in 10 funds, half in the struggling balanced Wellington Fund and 70 percent of the remainder in two more: Ivest and Windsor. To respond to shareholders’ pleas for a way to switch out of Wellington Fund without paying yet another 8½ percent sales load, Bogle created a new fund, called W.L. Morgan Growth Fund. Initially named Morgan Growth Fund, Bogle added the W and L to settle a legal challenge from both Morgan Stanley and Morgan Guaranty Trust Company. As he later observed, “All these funds were managed in Boston. All were aggressive and all were a big hit with brokers. But all would soon fail to perform.”
Revenues advanced from $151 million to $180 million. While Wellington Management Company’s business, the raison d’eêtre for the merger, was getting better, tensions and even animosities were developing as cultures clashed, and with time the stresses were increasingly personal. While publicly celebrating that the “new Wellington Management” was working even better than he could have hoped, Bogle was, as he later maintained, “becoming skeptical that the merger would be good for me personally.”
Bogle proposed a bond fund. In 1970, America had only 10 bond funds. The Bostonians scoffed. “The stupidest idea I’ve ever heard of,” declared Stephen Paine. “Bonds are yesterday!” “No! Bonds are tomorrow!” replied Bogle. At Bogle’s insistence, an income fund with 60 percent bonds and 40 percent high-dividend stocks was launched as Wellesley Income Fund in 1970.1 With Bogle continuing to press for an all-bond fund, Westminster Bond Fund would be launched in 1973. His prediction was accurate; by the year 2000, there were over 3,000 US bond funds.
Bogle’s heart troubles struck again in 1967. He was away from work for six weeks that spring with a heart arrhythmia and the installation of a pacemaker at Cleveland Clinic. After he went into cardiac arrest there, a senior cardiologist thought he would never work again.
With his persistent heart problems, Bogle searched for the best cardiologist and found Dr. Bernard Lown at Boston’s Brigham and Women’s Hospital. Dr. Lown realized that Bogle did not have a common myocardial infarction, which is caused by closure of a coronary artery, but a massive heart rhythm disturbance. This diagnosis indicated that Bogle had only five or ten years to live. Yet Bogle was plainly vigorous and showing no deterioration. This was unusual. Lown put Bogle through a stress test, expecting him to last no more than seven minutes. Bogle lasted 18, showing—as in many areas of his life—a remarkable will to overcome and persevere. Then Lown was able to diagnose Bogle’s exact problem: his heart was beating too rapidly to work effectively as a pump when he woke up in the morning or when he competed vigorously. At those times he was so tightly wound that he was releasing adrenaline, as he said, “like a prizefighter going into the ring.” Lown prescribed strong medicine for those specific times and put Bogle on a novel regimen that worked well for the next eight years. During a follow-up visit, Bogle set a hospital record by performing 50 different exercise tests. He also returned to playing both tennis and squash. However, in that important first year following the merger, he was absent from the Philadelphia office for a considerable time and from the Boston office even more.2
Bogle stayed in the Boston hospital for a full month. This led to a particularly nettlesome misunderstanding. It began with the Bostonians asking about Bogle’s health in the context of his being named CEO. They had reason to be concerned. Was it responsible to make him CEO of a public company when he might not be able to perform all his duties all the time? Moreover, if he would be confined in hospitals for long stretches and unable to carry out his duties as CEO, why burden him with all those administrative tasks and responsibilities? And since they would not put work ahead of health for themselves, how could they put Bogle in just such a position? So they asked difficult questions and suggested it would be better to wait before declaring publicly that Jack Bogle was CEO. Bogle saw those questions as insensitive and callous. After all, the decision that he would be CEO had already been made. It had been scheduled to be implemented right after the merger as part of the overall terms.
The tensions continued to increase and to spread to the Boston-dominated board of directors and to subordinates who worried about taking sides and getting caught in the politics. Bogle wasn’t about to change his style—working hard, mastering the minute details, and taking decisive actions had taken him to the top of Wellington Management. He knew he was intolerant of others’ opinions and considered his solo style a badge of honor. As fund board member Barbara Barnes Hauptfuhrer observed, “Jack’s way is the way.” And he had no interest in ever changing. Morgan took some of the blame, saying, “I taught Jack to be pretty tough—tough like I had been. Because I had owned almost all the stock, I could do any damned thing I wanted. But you can’t do that when you have four or five guys who are virtually equal to you. . . .”
Misunderstandings added to the organization’s structural problems. Leadership was divided between two historically proud cities some five hours and 300 miles apart. The groups were involved in two very different kinds of investment businesses. Retail mutual fund distribution was based on well-established business relationships between organizations (stockbrokers, mutual fund wholesalers, and fund management companies) with many small transactions; institutional investing centered on one-on-one long-term professional relationships between pension fund executives and portfolio managers. Fees, economics, and key success factors differed. Business opportunities differed. Profit drivers differed. Most important, effective leadership styles and management processes differed greatly. On many dimensions, the key success factors for the two units were nearly opposites.
The personalities differed, too. Bogle wanted to dominate decisions and persistently sought to dominate other people. He had no interest in “partners” or equals, despite the merger. His natural style in any meeting—one-on-one, with a small group, or with a large group—was always to take control, be the star performer, document his conclusions, make his case, and win his way. Keeping concentration on his version of his story, he was particularly good at blending charm and enthusiasm for his conclusion and his reasoning with repeated modest confessions of past mistakes and previous misjudgments.
“I knew I wasn’t tactful or diplomatic,” he said. “I am the kind of person who is either going to run something or not. I don’t want committees. I don’t want a lot of people involved. I don’t want to get into an argument about the final decision once it is made.” He dismissed the Bostonians’ “collegial, participative style” of shared decision-making as lazy and irresponsible.
Being a mutual funds guy, Bogle naturally evaluated the “Boston Four” on the retail metrics that he considered the standards for success or failure. And they, being from the investment counseling world, evaluated Bogle by the institutional standards they knew best. Each side lost respect for the other. Adding to the problem, the board of directors of Wellington Management was dominated by Boston people, who were not inclined to respect a CEO from Philadelphia who, in turn, did not respect them. Geographic distance, differences in investment concepts—growth versus conservative, retail versus institutional, and others—were real differences, but the major differences were cultural. Bogle was authoritarian; Doran and Thorndike believed in consensus. As Bogle put it: “I’m self-confident. Sometimes to my own regret, I try always to tell the truth, I do not try to please.”
As he recalled, “Wellington Management Company’s board, dominated by Bostonians, and I were in a real power struggle. I wanted to control everything and so did they.” Resentment over decisions made by one side, then reversed by the other side, festered into bitterness, and the vitriol emerged from behind closed doors to out in the open during meetings. Bogle was aggressive in sales and introducing new funds but conservative on investing. The Boston group was more aggressive on investing but more conservative, or less interested, in sales and introducing new funds. Where Bogle was always in a scramble for sales and new business, the Bostonians much preferred to have the business come to them. They believed this was more professional and developed better-quality business. They were also highly skeptical of cold-calling or soliciting institutional business. An obvious difference was in work habits: while Doran was usually at his desk by 7 a.m., the others in the Boston Four might start a workday at 8 and leave by 6:30. Bogle had always been a “rate buster” for long hours, coming in early and working late. And he had an acute interest in personally monitoring all the details of every matter.
He held himself accountable for living out the image of John C. Bogle that he wanted all others to hold: a superior image of who he was and what he’d done. Bogle accomplished great things, but in a Faustian bargain with his own devil, he paid dearly for it because he always had to press on regardless. As he later put it, “We tend to live to the world’s expectations. So if the world wants to call me Saint Jack, you try to behave more that way.”3
Eventually the Bostonians decided Bogle must go. In a memo to the other Philadelphia directors, Charles Root, an actuary and an astute manager, and Robert Worden,4 leader of a successful management consulting firm, reported, “Bogle [is] acknowledged . . . to be one of the most knowledgeable mutual fund experts extant [and] is also acknowledged by TDP&L to be a good deal smarter than any of them. Trouble is, Bogle has a dim view of [Thorndike’s] management abilities and [Doran’s] investment abilities,* and has been less than diplomatic in his handling of and communications with these two men—accentuated by geographic separation . . . Thorndike and Doran have decided they can’t work with Bogle and would like to . . . heave him out.”5
At 72, Walter Morgan decided to step aside as chairman of the mutual funds. Joseph Welch, only slightly younger than Morgan, also retired. So Bogle, in what would prove to be a crucial factor in the creation of Vanguard, was chosen as chairman of the single board of directors of all the different funds. That board was responsible only to the several funds, not to Wellington Management.
Behind the external appearance of smooth and orderly transition, internal stresses compounded. Bogle was so disturbed by the tensions that he was considering either resigning as CEO or launching a proxy fight for Wellington Management. In an effort to avoid a public confrontation, the funds’ board asked two fund directors to help the two sides come to terms. They soon learned that would be a major challenge.
After a month, the two directors reported to the funds’ board that the hostilities were so serious that they could blow up the company. Thorndike was highly critical of Bogle, saying he “finds it hard to trust or depend on others, doesn’t like meetings to share ideas and gives directives by order rather than discussion.” While recognizing Bogle’s mutual fund expertise and his brainpower, Doran described Bogle as “out of touch with the ugly realities of the company and allows no forum for honest exchange.”
When Doran and Thorndike met with Root in early December 1972 to inform him that the only solution was for Bogle to resign, Root lost patience. As he later said, “I, in effect, threw down the gauntlet. I said, ‘You’ve got a great thing going for you. Don’t mess it up! You’ve got to stop it.’ . . . Then things kind of leveled off.” Later in December, Bogle professed willingness to improve his relationship with Doran and Thorndike. In a memo to Root he wrote: “JCB, WNT and RWD all agree to forget past problems and make a Herculean effort to make the new arrangements work and to put aside personal differences for the good of the organization.” A little later, Root would report that Doran and Thorndike, after making a major effort, had again decided they could not work with Bogle and that he should leave the company.
Meanwhile, Bogle continued to build his connections with the financial press corps by remaining immediately accessible and always quotable. And, of course, he loved the way the press put him in his favorite place: at the center of attention. Call by call, article by article, speech by speech, and quote by quote, he was building a personal brand, one of the best known in the business. He loved it.
On April 1, 1971, Morgan’s voting trust terminated on schedule and the B shares were distributed as previously agreed. Then, for nearly two years, internal calm appeared to prevail. A longtime Wellington director, James F. Mitchell Jr., was approaching 70 and mandatory retirement. After his retirement, the Boston group would only need to persuade one director—Richard Corcoran, who was independent of both the Boston and Philadelphia contingents—to have effective control. The question was raised whether it wouldn’t be wise to keep the same board together until the internal tensions had been overcome instead of trying to bring a new director up to speed on all the past discussions. Root, having anticipated the situation, said, “I’ve already asked him and he has agreed to stay on until the internal tensions are resolved, so it would be embarrassing to change now.” Mitchell stayed on.
By the time James L. Walters joined Wellington as general counsel in January 1972, the Bogle-Boston friction was serious. Restructuring the funds with their own single board of carefully selected directors with Bogle as chairman was sometimes called “Bogle’s escape hatch.” Over the next few years, the prescience of that description would be proved. As the friction grew, Bogle requested that he, as CEO, be kept fully informed and asked Jim Walters to find ways for him to hold as much control as possible over the funds.
Next, Bogle discussed with Walters—apparently to test his expertise—the “internalization” provision in the 1970 Investment Company Act. Bogle was becoming convinced that the traditional management company versus investment company structure was lopsided and that, no matter what the theory was, the fund management company’s interests always outweighed the investors’ interests. He began exploring various possible redesigns. Before Walters joined Wellington, Bogle had pressed him on the concept of “mutualization” and whether the funds could manage their own administration. Of course, the Boston group did not favor such ideas and would have wondered: Could Bogle be laying the groundwork for an internal takeover?6
In 1973, Root recommended the independent fund directors hire their own legal counsel. They agreed and hired Richard B. Smith, a securities law expert who had served as an SEC commissioner and was a partner in Davis Polk & Wardwell, one of New York City’s leading law firms. Root tried to get Bogle to move away from his “I’m right and they’re all wrong” stance based on Bogle’s misguided conviction that “sooner or later, they’ll have to back down.” Root expressed great doubt that the Bostonians would ever back down, particularly to Bogle.
Root was, in his own words, “thunderstruck” by the situation. Skeptical of the investment skills of the Bostonians, he believed Bogle had the leadership capability Wellington needed to succeed. Root came to a crucial recognition: the fund directors had the legal power to decide which investment management company to retain as manager of their mutual funds. Changing managers for pension funds had become common practice during the past dozen years, so why not change managers for mutual funds the same way to ensure the fund had the best manager? Root declared that if Bogle were fired, he would recommend to his fellow directors that the funds’ board terminate its investment-adviser contracts with Wellington Management and select a new manager. This meant Bogle had the all-important trump card. Publicly owned Wellington Management could not survive without the income it was earning from managing investments for the various mutual funds.
Doran took the lead as spokesperson for the Bostonians. While tensions had been patched over before, they had come back to a rolling boil and now a permanent solution was needed. In Doran’s view, morale was low: Bogle had not fostered a culture of teamwork and had “sapped the confidence of the top executives with an attitude that no executive had competence other than Mr. Bogle.” As Doran explained, executives working under Bogle “were reminded of their limitations too frequently rather than spurred on to greater achievement” and that “the spirit of mutual trust had been damaged.” Bogle’s autocratic leadership had become inimical to the collegial, professional organization Wellington was trying to develop. For the future success of their company, Doran and Thorndike had concluded that Bogle really must go.
After adjusting for inflation, the great bear market of the mid-1970s was actually worse than the 1929 Crash. The Dow Jones Industrial Average fell 58 percent, bottoming out at 580 in October 1974. That dreadful market collapse put Wellington Management Company in serious financial trouble as assets fell nearly 25 percent and profits, nearly 30 percent. Far worse, the company’s stock fell 80 percent, from $40 at the time of the merger to $8. Each of the four Bostonians’ personal ownership value plunged from $1.5 million to just $185,000.
Doran told Bogle in February 1973 that Thorndike intended to assert himself more actively in management. Bogle was concerned, but Doran assured him that it was only natural for a senior executive to want a larger role, given the organization’s difficulties and challenges. Bogle didn’t buy that bland view. He suspected it reflected anger resulting from Bogle’s decision—and the way the decision was implemented—to take Explorer Fund from Steve Paine when it lost 35 percent in a stock market that was down only 5 percent.
In August 1973, Bogle moved the mutual funds from Center City in Philadelphia to a suburban office complex called Glenhardie in Wayne, near enough to Valley Forge—“only” three miles away—that Bogle, in a clever marketing move, was later able to use Valley Forge as the firm’s mailing address. On September 26, the four Bostonians met with Bogle at the Glenhardie offices. Doran told Bogle that they wanted more control over mutual fund activities.
Then, on November 14, Doran stunned Bogle: “Things are just not working out. I’ve talked to the others and we think it best if you left the company.” Bogle again said he would not resign. Doran then told Bogle he had two options: leave completely, or leave the management company but continue with the funds in a strictly administrative role—the sort of work he did not enjoy and had delegated entirely to his able colleague James Riepe. Although Doran did not say so, Bogle would then become little more than a chief clerk. He could either fold his tent or he could fight. Bogle being Bogle, that decision was easy: fight!
Doran proposed a financial settlement for Bogle: a $20,000 annual annuity for 15 years with Bogle to sell his B stock back to the company at the then current market price of $6—not at a price premium for handing the Boston Four control of Wellington Management Company. Given the high interest rates at the time, the annuity’s discounted present value would have been less than $150,000. Curiously, for an offer framed by financially experienced people, the proposed package was far too small for Bogle to consider it. He didn’t. Bogle had no intention of taking money as part of a deal to resign and turn control over to the Boston Four, particularly if the company would be paying the money while they would personally get the benefit. “I’ve heard of few stupider things than that,” burst Bogle. “I’ve done an effective job. I’ve gone the extra mile to assure communication and harmony with all of you.” His anger drove him on: “I am tired and annoyed by all of this enough to say, ‘Make me an offer in writing and have it signed by all four of you!’”7
Bogle insisted his management style and record as CEO had both been good, despite the difficulties. He argued that removing him would cause serious problems, “a material public relations problem as well as severe impact on Wellington employees, the regulating authorities, and the financial community.”
Four days later, Bogle told Doran he would not resign as had been informally requested. Coleman Mockler, executive vice president of Gillette, a friend of Thorndike’s, and a past board member of Ivest, agreed to approach Bogle on December 12, 1973, hoping to avoid having the matter go to the funds’ board. But he could only repeat the prior offer, and Bogle told Mockler, “If they want to buy control of the company, they’ll have to pay me out of their own pockets!”
The Bostonians took Bogle’s counteroffer as either serious or at least as an opening to negotiations and started putting out the word that Bogle was on the way out. But Walter Morgan was adamant: “You can’t fire him! He knows more about this business than all the people in Wellington Management put together!”
Bogle knew a formal termination would be on the agenda at the Wellington board meeting on January 23, 1974, and at the funds’ board meeting the next day. To make his case, he wrote a 20-page memo to the independent directors, reviewing his achievements and advancing several creative proposals for the future, including mutualization.
Mutualization would have been seen as a radical change from the standard corporate structure of most mutual fund families. That standard structure had recognized the management company as the organizer, merchandiser and investment manager as well as the administrator of each fund in a family of funds. This view honored the history of mutual fund pioneers who had lived through the difficult thirties, forties, and fifties by being tough, sales-focused small business entrepreneurs who just happened to be selling investment products called mutual funds. The management company’s proprietors, obliged by law to have a majority of fund directors be “independent” of the management company, traditionally chose only those close friends they could trust to go along with management and to understand that doing so was why they had been selected.
Bogle had devoted more than 20 years to the hard-selling, do-whatever-it-takes business model embraced by his mentor-employer, Morgan. During those decades, his “press on regardless!” mantra had been his daily guide as he focused on sales and profits. Now, with his objective greatly changed—like a lawyer with a different client—he would make the strongest case he could for a mutual mutual fund organization.
Bogle was convinced that so long as mutual funds were captives of the management companies that had created and built them, the power of the management companies would inevitably lead to higher fees and therefore lower returns to investors. In his long memo, he proposed a basic restructuring to get away from that conflict of interest by converting to a mutual form of corporation owned by the several Wellington mutual funds. He estimated that could cut costs by at least 40 percent.
Bogle’s proposal had actually been fully worked out in a long “highly confidential” memo three years before. It was simple and decisive. The Wellington Group of mutual funds would acquire Wellington Management Company for $6 million and thereby acquire fixed and liquid assets of $4 million. The funds would then act as their own investment manager and distributor at cost. The $2 million balance of the purchase price would be recovered in a single year by not paying the 40 percent of management fees that had been the annual profit of Wellington Management Company. Meanwhile, the merger with Thorndike, Doran, Paine & Lewis would end, and TDP&L would once again be an independent investment counseling firm with $1.6 billion in assets under management, and free to go after institutional business.8
In his memo, Bogle added a series of reasons: mutualization would be consistent with the public’s increasing consumerism and decreasing tolerance for conflicts of interest; it “would put to rest the nagging question of the appropriateness of a publicly held investment management company which has become a profound problem.” The cost savings to the funds would be “awesome,” and mutualization would end the corporate problems with which the funds’ directors had been struggling. In sum, it was the right thing to do, would provide substantial long-term cost savings to the funds’ shareholders, could benefit Wellington’s employees, and was clearly feasible.
On January 23, after a morning of routine business and lunch, Bogle presented his case. Fundamental and compelling as Bogle thought his proposal clearly was, it went nowhere. It was ignored. In fact, most participants could not see why Bogle had even bothered, unless he somehow hoped his proposal would be accepted by his adversaries, who would then have to decide they needed him and his reputation to implement it. All he got was an agreement to appoint four directors to a study group to consider his proposal. That study group never met.
Doran explained that a management decision had been made to terminate Bogle and said the decision required board approval. Thorndike, as chair of the meeting, offered the standard way out: “Well, Mr. Bogle, will you resign?”
That question was the final formality in the six-year, accelerating running feud between the Bostonians and the Philadelphians, separate warring groups within Wellington. Bogle knew he was at the tail end of his rope. If he chose not to resign, he knew the question had only one alternative: Bogle would be fired.
Saying he would consider the matter, Bogle, tough as ever, said the board should hear the reasons for his termination. Doran outlined the reasons, which were familiar to all the directors: Bogle’s insistence on his own way, his inability to collaborate, and all the rest. When he finished his review of the reasons, chairman Thorndike repeated his question: “Now, Mr. Bogle, will you resign?”
Bogle then took out a 28-page document rejecting their offer of resignation and proceeded to read every page, concluding, “We are sitting here today more as a kangaroo court than as a board of directors, given the uneven, unfair, and ad hoc nature of events . . . and the advance commitments that have been made.”
He rejected the request for his resignation for four reasons: it could cause irreparable harm to the company, and no case had been made that it was in the best interests of Wellington Management Company; dismissal was “in violation of elementary standards of fairness and of accepted standards of corporate practice”; the terms were “both unethical and illegal”; and the request, if accepted, would involve a “serious misuse of the company’s corporate assets and a breach of fiduciary duty” by the board. Noting that earnings of Wellington had increased when most fund companies’ earnings had been falling during recent turbulent markets, Bogle concluded by admonishing the other directors to “proceed with an open mind.”
He wasn’t done. “The process I have outlined might lend itself to a college fraternity or a social club, but it hardly comports with how a board of directors of a company responsible for $4 billion of other people’s money should act. If it were not such a serious matter, it would be a joke.”9
The words may have soared in Bogle’s heart and mind, but they had no impact on the board’s decision. Directors voted 10–1 to request his resignation in exchange for a slightly enhanced package: $60,000 a year until he found work and then $20,000 a year up to a total of $320,000.
Still, Bogle refused to resign.
On a quick second vote—10 votes in favor of termination and 2 abstentions, by Bogle and Neff—it was agreed that Bogle would be paid his current salary to advise the study group that never met.
In retrospect, the Bostonians had taken a substantial risk, whether they realized it fully or not, that Root’s threat would become real. Doran would reflect back on that day and his thinking at the time: “We knew that the dismissal carried significant risk, but it was deemed the correct thing to do anyway. Certainly the funds’ board had the authority to take extreme action against Wellington Management Company. They could have said: ‘You’ve just fired Bogle, so we’re going to fire you.’ It could have happened, but we thought it was unlikely. The fact is, we just couldn’t be sure what the independent directors of the funds would do.”10
Neff, who had sided with Bogle, later said, “The measure of a man is how he handles himself when things aren’t going well. That was Jack’s finest hour. He couldn’t have handled himself better.”11
The board voted to elect Doran president and CEO and to continue for a time to pay Bogle his salary. As an investment executive, Bogle now had nearly nothing. He had lost his company and his job. Why would any other fund company hire such a guy? He was known in the industry as a maverick, difficult to work with and even harder to work for. He had been wrong on his strategy of merger. He had been unable, as a manager, to work with Doran and Thorndike, and had been accumulating a reputation as a dogmatic hardhead who always had to be in charge and make all decisions.
The meeting ended at midnight. Jack Bogle got home at 1 a.m. and told his wife that he had just been fired.
Eve was not surprised.
The next morning, January 24, 1974, Bogle was on the 6 a.m. train to New York City with Jim Riepe, his capable assistant, to press on regardless.
* Though not me. Following up on Jay Sherrerd’s observation of the low price Gemini Capital shares were later selling for, I bought in boldly and heavily margined my account, and saw the shares go from a discount to a premium as value stocks surged.
* Indeed. Bogle later said, “Any regrets? Sure! I somehow believed in permanently or consistently superior investment managers. Bad judgment. Bad decision. Stupid!”