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Bogle: Investing Wins, Speculation Loses

Speculation continues to dominate stock market activity, but investors need to wake up to the long-term consequences, says Vanguard's founder.

Christine Benz: Jack, I want segue and talk a little bit about your most recent book, The Clash of the Cultures, and the clash is between a long-term investment culture and one that is based on short-term speculation. Let's talk about how that culture clash unfolded. What has driven the increasing focus on more speculative styles of investing?

Jack Bogle: Well, first of all, it comes around I think by and large, the kind of thing we had in the late 1990s--the information age and all that kind of thing--where the price of the stock became more important than the intrinsic value of a company. And when you focus on prices and pretty much disregard intrinsic values, you are just gambling.