YouSaid · the spoken record

William McNabb

lines on the record: 112
first: 2016-10-21
most recent: 2016-10-21
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It's such a powerful thing. We funded some work that Thaylor and Bernartzi did in the late 90s, well, it was probably early 2000s. And it really led us to get much more aggressive about the target date phenomenon and these auto 401k plans. And we've seen better results. I mean, and again, to your evidence-based principles, it's absolutely clear when you look at the investment results of people who have followed where we've used behavioral finance to shape the plan design and shape behavior versus leaving people to their own. And you can see it boils down to dollars and cents. You have more money if you follow these principles.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, accepting being average. You're saying, I'm going to be in the top quartile. Guaranteed. And, you know, it's things like that that aren't intuitive to people. And you need to sort of lay it out. It's interesting. You mentioned Thaler. We are huge fans of their work. You know, Thaler and Bernardzi and the 401k space did some of the best work where they took the behavioral principles and said, okay, instead of using it just to explain what's happening, let's use them actually to help influence what should happen. And this is where the idea of automatic enrollment, automatic escalation. Everything he talked about in that book. Changing the”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think it's because there is an irrational expectation that many people have that I know if I pay a little more attention, I can outperform. You know, in the simplest way, one of the best lessons I learned, and it was kind of a blinding flash of the obvious, but I often say that's all I'm good for these days, is. Average is not average. People used to say indexing, well, you're just accepting average returns. Actually, that's not true. As you know, if you take the average index fund's return and compare it against a whole universe, you're going to be in the top quartile from a performance standpoint over any long period of time. So you're not.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“He talks a lot about the evolution of tasks within occupations. And, you know, we take some comfort, if you will, that actually there's been a lot of change and it's been absorbed. And there's a lot more coming. And the question is, how well prepared are we for that? And it goes back to one of our earlier conversations around are there things sort of from a policy standpoint that could be going on to help that. You know, we think infrastructure, we think education, probably the two big categories. But his work is so data-driven that it makes you think a little bit differently about the problem. And that's what I loved about your concept. And I can't wait to see it.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, there's a place for judgment and instinct. There's no question about that. But being well informed, and to me as an analyst in particular, the second and third layers, if you will, when you're peeling that proverbial onion, where sometimes you really get the insights. We have just as an example, our chief economist has done some really cool work on what's going on from a growth perspective. And he doesn't accept we're in secular stagnation. I agree.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Well, I think one of the things that's really fascinating to me is you spend a lot of time on data, and we think data roll.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think directionally it's close, it's close. I know certified financial planners, which is a broader thing, I think we have 50% now of all of it.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very chill And, you know, one of the, I would say, better to be lucky than smart aspects of where we are. And luck, you should always acknowledge your luck. Right. There are hundred and eight universities within two hours of our campus. We produce in that region more master's and graduate degrees per capita than any area in the country. I think on undergraduate degrees it's between us and Boston. And so we've got a lot of young people who want to come and they want to stay close to home. And we're really the biggest financial services firm for miles around.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it poses challenges occasionally, and the biggest place is if we're trying to bring somebody in at a more senior level from the outside, sometimes the dual career thing in New York, there's just so many more opportunities. And that actually occasionally poses a challenge. But it's interesting once we get people to the area and they see the quality of living, it ends up turning into a selling point. I've just added two new members to our executive team in the last six months. And first time we've gone outside a long time, more than a decade. And that was their reaction, both their reactions when they came. They were like, wow. It's very kickback.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you know, it really resonated with me, Barry. And I think the headquarters and the whole campus atmosphere really reinforces that.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, again, I give Jack Bogle a ton of credit for just he wanted there to be for us not to be Wall Street. It was a very clear message from him. Actually, our predecessor firm Wellington was headquartered in Philly. Jack moved them out to the suburbs. I think part of it was tax reasons. Jack liked to save a buck for the investor. But I also think it was a place to, in a sense, create separation so that people weren't unduly influenced by short-term forces. I think Jack Brennan, who succeeded him, built on that. I remember interviewing with him, and I said, so what's your view of the future here? What do you want this company to look like? And he said, I'd like to have Wall Street Smarts with Midwestern values.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we told people don't worry about your job. We're not going to have any enforce reductions where we want people to be there for the client. And we found, and what we told people, we anticipated there'd be some areas where the volume of work might decrease because the world was melting down. And if that happened, we would pick people up and we'd put them into areas that needed more help. And we ended up moving several hundred people around. But it turned out to be a great thing for us because the whole focus from that point on was what's the client need? And I think all of us who live through that, you know, you certainly have the battle scars, but you also have a lot of pride in what we were able to achieve on behalf of our clients. And I think that message went a long way.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he was running our then only index fund, index 500. And it had about a billion. I think at the beginning of the day, and then a billion two at the end of the day. And he went home and his wife said, do you still have a job? You just lost a quarter of the fund. And he said, you know, I don't know. I have to go back and see if my badge still works the next day.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Really funny story, Barry, was. Our CIO Gus Sauter was due on stage a couple hours later, and we basically drafted his replacement and said you're going to go give Gus's talk and we sent Gus up to Valley Forge back to the offices to oversee the trading desk and make sure everything was working the way it should. And there were like no rental cars. So he ended up, I think, cruising into Vanguard's campus in a Mustang convertible.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I have a separate soundtrack going through my head saying the world is ending as I know it. How am I reconciling all that? You got to look past.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“This was in Washington, D.C. And we had our largest pension clients there. And I was giving my first talk as CEO. And the whole emphasis was on long term perspective and the need to tune out the noise.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, you see things. Sometimes I'd like to lift all of our lawmakers up and take them on a global tour. I think in order to promote good economic growth, you need to have some basic infrastructure in place. No one wants to see higher government debt levels and so forth, but I think there's got to be some balance here. Sure”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“International earnings, and I think we shouldn't be going forward. I think it again, those kind of policies are actually restricting good economic growth and long-term thinking, and we should be doing everything from a policy perspective to clear that up. The last point I'd make is I am a believer that infrastructure probably needs improvement here. In fact, it's not probable it does. You know, I travel the world. Nice in Europe.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's feasible, and I think directionally desirable. You know, look, I think our corporate tax code is, I think, a hindrance to business here. And again, I'm somebody who wants to see the markets do really well, especially here and in my home country, is we should have economic policies in place that actually are pro economic growth. And I think a more simplified and probably net net lower corporate tax code would be beneficial in that regard. I also think getting clarity around international, you know, we're an outlier, as you know, in the developed world in terms of the way we treat”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is a whole broader issue. Second, I think the uncertainty that I talked about actually has caused a lot of companies to be more conservative with their cash. So they're either keeping it on the balance sheet or doing what they can to keep their stock price up because they're so unsure about what the future is they don't want to invest in the business. I would love to see us get away from that.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think the buyback phenomena has definitely gotten a lot of tailwinds, if you will, from the low rates. And I don't think levering up to increased buybacks is a good thing in general.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It does. I think there is a bigger question out here. And I'd always a risk of leading with my chin. I would say there's some really good work that's been done at Harvard just issued their U.S. competitiveness study. I think just two weeks ago, Mike Porter and the gang. And we studied it pretty carefully. And, you know, it's key takeaway for me was the political dysfunction that we're seeing is causing a real rise in uncertainty. And I think that uncertainty holds back growth. And I think that's a more macro issue, if you will, probably somewhat divorced from what's going to happen in the stock and bond markets in the intermediate term.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No role whatsoever. We've looked at this going back to the 1850s. There's no difference that's measurable between having a Democrat president versus a Republican president. There's no difference in how the House and Senate work out. And so everything that goes on is kind of speculation. And what you typically see is some dislocations right before and right after and usually within about 100 days of a new administration being in, you get back to kind of what we could call normal”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So despite all of the headlines, despite all of the noise, despite all of the speculation, it really should play no role.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and that's kind of our philosophy as well, Barry. And, you know, we run a lot of sophisticated models to get there, but that's where it ends up. And I think from a planning perspective, it's a reasonable place. The other sort of thing, and I can't remember if I read this with Schiller or not, but if you look at long-term treasuries, take the 10-year and compare it kind of typical equity risk premium, you get to the same kind of couple percentage points below long-term averages. So I think there's a lot of kind of convergence around that.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. Less than five, I think, yeah. Really? So, I would still say historically they're on the high end. And a lot of sins get covered with essentially 0% short rates. And our view hasn't changed the last couple years. I've been pretty public about if we look out over 10 years, we think the central tendency Is for equity returns to be a couple hundred basis points below long term averages.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think there's a, in the, let's say, the next 10 years, I think it's going to continue to grow, I don't think it become 50% of the U.S. market even in that period could be 50% in the mutual fund market. Really?”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think theoretically at 100%, then you wonder where price discovery spring from. Right. You're creating opportunities for stock. Right, exactly.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly right. But the point is we're a long way from where this could end up. And I think it's a global phenomenon and you're going to see indexing take a bigger share of global equity assets over the next decade. I think it's almost inexorable. It'll be inexorable progress.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Only 15% of the US equity market. It's less than 5% of global markets. So there's a long way to go here. Second, when you look at, I think even more importantly, trading volume.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That chase. And by the way, I agree with you. There are a handful of people who their returns in retrospect have been pretty persistent as well. So, you know, you look at the Seth Clarmans and the Steve Mandels of the world. And I have tremendous respect for what they've accomplished.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's very difficult. You know, a few of the big endowments have done a decent job identifying people early in their careers. You know, the Yale's of the world and the Notre Dame's of the world. And very few others have been able to do that. Everybody who's in.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you're getting a risk premium for liquidity and for the kinds of companies that you're investing in. I think it's a very vibrant thing, not accessible to the average investor. Private equity is an asset class over time, at least the last 15 years, not been a great place. And I think your point on the fee side there is probably detracted from those returns. And again, by the way I look at private equity is, again, you should get a significant premium over the public markets for the liquidity that you're giving up. We don't see that over the last 15 to 20 years. You know, the hedge funds, you've written about that better than I'll ever be able to articulate. I've had a few thoughts. It makes no sense to me. It makes no sense to me.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I think it does underscore that human behavior is always looking for the home run, right? People love that idea of, you know, outsized returns. Look, if you take each of those three categories in turn, you should get paid for the risk you're taking a lot of venture capitalists. And as an asset class over the last 15 years, it's done okay. And even more broadly than just the very, very best funds.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I don't think so. Look, I think there is a secular element to this shift to indexing, and it's really less about indexing and it's about cost. So I think low cost investing is the secular change here. I think there will be opportunities for active managers, but I think if you're a high-priced active manager, you're going to really struggle.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hope it goes away. You can't ignore it and hope it goes away. And, you know, if it's not us, it's going to be somebody else. And the real message here is let us help you work on your value proposition. I think it's more important than ever for advisors to be able to explain clearly what value am I providing to you as a client. Second point I think is really important is for advisors to look at this technology and say, what can I use technologically to make my business more efficient? I don't think any of the so-called robo firms are going to put the advisor community out of business. But I think people who ignore their technology are going to put themselves at risk.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we be naive to think there's been no pushback. Although I can, you know, the mentions are in the dozens, if you will, from advisors. We serve something like 50,000 advisors today. And I think maybe I've heard from 100 over the course of 18 months. But, you know, you take it very seriously. I think that my pushback is this technology is upon us. And this is going to happen.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, but I think you're going to be right directionally though. There's tremendous appetite for this in the marketplace. And our whole thing was to be able to give really sound personalized advice for very small accounts. You know, we wanted somebody with $50,000 to be able to get the same kind of service that people with a million dollars were getting just five years ago.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we launched that last May. So it's about 18 months now. And as you allude, we had sort of a legacy business of about 10 billion at the time. It's now approaching 50 in 18 months.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or misinformation. And as you know, one of the new sort of fads out there, or maybe it's more than a fad, maybe it's the way it's going to be, is get the headline out there or get the item out there, and then we'll check for veracity later. And we're seeing when that kind of information proliferates, it really does make investors struggle because, you know, they're like, what should I do? And of course, we're trying to console them. Hey, there's noise in the system here. You need to avoid reacting to that noise. But the more there is, the harder it is to make that point.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and as you know, during that period, the market hasn't been tremendous lift there. A lot of that has just been true organic growth. So we're able to do more for people. So technology's just been phenomenal tailwind for us, if you will. One of the challenges I think we see in one particular area, and you allude to in your question, is the rise of social media and instantaneous information on everything.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The internet was just starting to take hold. We had about $500 billion under management, 12,000 people. You know, today we're a little less than 15,000 people, and we have, as you referenced, nearly 4 trillion. So technology has actually made that possible.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've historically approached technology as needing to do one of three things. First, create automation where automation is possible so you can generate economies of scale for your investors. That's kind of classic automate things that are very manual in nature. Second, can you use technology to make your people better? So better systems so that when you're talking to clients over the phone or you're doing increasingly video conferencing and so forth with them, it's a better experience. And then the third is how do you make it more convenient for your investors? So we've been historically trying to, I'll say, bucket our investing that way. And it's been pretty productive for us. One of the figures I always love to describe to people is in 2000.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is, and you see it time after time. So one of the things you can agitate for as a large owner is, hey, let's make sure we've got a long-term environmentally sound set of principles that we're operating under so the shareholder doesn't bear the brunt of that cost down the road. There's judgment involved there, obviously, in terms of how you actually have those conversations, but we're finding companies are actually doing a better job beginning to disclose that. You're seeing it more and more in some of the management write-ups and so forth in the proxy statements and in the annual reports.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's actually a global phenomenon. And I could see us doing more in that product space over time, you know, perhaps adding a couple of more complementary kinds of offerings. I will say that the other evolution in ESG for us is looking at sort of broad ESG principles and how do they affect long-term value creation. And so the easy example would be if you have a company who's got a bad track record in terms of environmental issues, what you know is that's going to hurt the stock price over the long run.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you know, it hits some of your big screens, and I think it's been successful at meeting a lot of investor needs. We see, you know, it's a fairly significant fund at this point.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a very complex topic. So I can tell you my mailbox is filled every week with different constituencies having particular social issues. Actually, I think if I added it all up, we would exclude almost every company in the SP 500. So one of the things we've done is we created a socially responsible index fund.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I give Larry and BlackRock a lot of credit for that letter. It was very complimentary actually to the letter the last couple letters we'd sent out. We had really emphasized with our portfolio companies that think long term. And we really stressed the need for better engagement. He hit particularly hard on the long-term issues. And I think together it's actually a pretty good message.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think what boards have been doing, and there's actually been a couple of academic studies recently that have pointed out that there's been real progress here, is they have been doing a better job defining longer-term objectives for the company and linking executive pay to those objectives. And you're seeing less use of options, more use of restricted stock grants. And the grants are made only if certain objectives are achieved. And then the vesting on those grants may actually take place over a pretty long periods of time. We think that's actually helping drive executive teams to think longer term. It's not universal.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And you've actually written a fair amount of this on your blog, and as you know, I'm in big agreement with a lot of your points there that... In the 80s and 90s in particular, especially in the 90s after the compensation roles changed, there were a lot of just blanket granting of options. And it really was a rising tide as opposed to performance really driving it.”
2016-10-21 · Masters in Business · Interview With William McNabb: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source