📖John Bogle
Understand Before Investing
Only invest in what you can explain simply.
Never invest in a business you cannot explain in simple terms. If you can't describe why a company is valuable, you don't understand it well enough to own it.
🏠 Everyday Analogy
📖 Core Interpretation
John Bogle emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Simplicity of explanation tests depth of understanding.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Index Investors Through the Global Financial Crisis (2008)
During the 2007–2009 financial crisis, global stock markets plunged over 50%. Many investors panicked, sold stocks, or chased tactical strategies. Long-term index investors in low-cost total market funds who stayed fully invested endured severe temporary drawdowns but made no drastic changes.
✨ Outcome：By 2013, the S&P 500 had recovered to new highs and kept compounding thereafter. Those who simply held broad index funds with low fees and stayed the course generally beat investors who bailed out or traded heavily, underscoring Bogle’s simplicity doctrine.
2
Vanguard 500 vs. Janus Twenty in the Tech Bubble (2000)
In the late 1990s, Janus Twenty, a concentrated growth fund heavy in tech, dramatically outperformed the broad-market Vanguard 500 Index Fund. Investors poured billions into Janus based on its stellar recent returns, while the plain-vanilla index fund looked dull and lagging.
✨ Outcome：After the 2000–2002 tech crash, Janus Twenty’s performance collapsed and badly trailed the S&P 500 over the full cycle. The once-mediocre index fund pulled ahead, illustrating Bogle’s point that hot funds often cool and revert toward market averages.
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