To: ild who wrote (54767 ) 2/27/2006 11:08:59 AM From: Wyätt Gwyön Read Replies (1) | Respond to i have that book. John C. Bogle: I have a great deal of respect for the DFA organization. However, I am not sure their cats will actually meow in the future. First it's very difficult for any particular segment of the stock market to sustain superior performance. The watch word for our financial markets is, "reversion to the mean" i.e. what goes up must come down, and it's true more often than you can imagine. Second while the returns the DFA publishes are accurate returns for their funds, those who invest in their funds are paying an extra 1% per year to do so significantly reducing capital accumulations over time. Capitalism is a scheme of free markets and, as I point out in my new book, of trusting and of being trusted. But our capitalistic scheme in the latter years of the 20th century seems to have lost its way. We've had a "pathalogical change" from traditional owners capitalism where most of the rewards have gone to those who make the investments and assume the risks to a new -- and deeply flawed -- system of managers capitalism where the managers of our corporations our investment system, and our mutual funds are simply take too large a share of the returns generated by our corporations and mutual funds leaving the last line investors -- pension beneficiaries and mutual fund owners -- at the bottom of the food chain. That is what has to be fixed.
