The story John C. Bogle ’51 often tells of his senior-thesis journey is something to which nearly every Princeton senior, past and present, can relate. It started in Firestone Library and ended before graduation in a 133-page document.
Holed up in then-newly built Firestone Library, Bogle paged through a December 1949 copy of Fortune magazine looking for inspiration. An article on page 116 caught his eye. It was titled “Big Money in Boston,” and it discussed the “tiny but contentious” mutual-fund industry. Bogle realized he had found his thesis topic as he read about an industry that appeared “totally untouched by academics and the press” at the time.
Bogle’s thesis, titled “The Economic Role of the Investment Company,” outlined a strategy to make investing in mutual funds more accessible to individual investors with lower costs made possible through indexing rather than actively managing funds.
The idea eventually led to Bogle’s founding of the Vanguard Group in 1974, an investment-management company that took advantage of low-cost indexing. Vanguard now manages approximately $1.6 trillion dollars in assets, according to a February 2011 estimate.
At a Jan. 31 gathering that celebrated Bogle’s influence on the financial world, former Federal Reserve chairman Paul Volcker ’49 said, “[Bogle] is still living off an undergraduate thesis he wrote at Princeton. He got the thing reprinted! And it sells 50 years later!”
Bogle replied, “Never underestimate the power of luck.”