The Clash of the Cultures: Investment vs. Speculation -- Contents -- Foreword -- Acknowledgments -- About This Book -- "Value-Creating" and "Rent-Seeking" -- A 60-Year Perspective -- The Big Picture -- Mutual Funds -- The Index Fund -- Our Retirement System: Potential Train Wreck -- Wellington Fund -- "The Man in the Arena" -- Some Investment Guidance -- Chapter 1: The Clash of the Cultures -- The Rise of Speculation -- High-Frequency Trading -- Mission Aborted -- Futures and Derivatives -- The Wall Street Casino -- How Speculation Overwhelmed Investment -- The Decline in Unit Transaction Costs -- Hedge Fund Managers and Other Speculators -- We Can't Say We Weren't Warned -- The Wisdom of John Maynard Keynes -- Speculation Will Crowd Out Investment -- Fixing the Social Contract -- Compensation Issues -- Creating Value versus Subtracting Value -- Restoring Balance in Our Investment Sector -- Tax Policies and Financial Transactions -- Develop Limits on Leverage, Transparency for Derivatives, and Stricter Punishments for Financial Crimes -- The Rules of the Game -- The Goal: Stewardship Capitalism -- Chapter 2: The Double-Agency Society and the Happy Conspiracy -- The Development of the Double-Agency Society -- Examining the Conflict -- Agency Costs and Managerial Behavior -- The Ownership Revolution -- Changing Leadership -- Renters and Owners -- The Creation of Corporate Value -- Time Horizons and the Sources of Investment Return -- "Short-Termism" and Managed Earnings -- The Failure of the Gatekeepers -- 1. Congress -- 2. The Judiciary -- 3. The Securities and Exchange Commission -- 4. The Federal Reserve Board -- 5. The Rating Agencies -- 6. Public Accountants -- 7. The Financial Press -- 8. Security Analysts -- 9. The Directors -- 10. Stock Owners -- Conclusion.

Chapter 3: The Silence of the Funds: Why Mutual Funds Must Speak Out on the Governance of Our Nation's Corporations -- Why Mutual Funds Are Passive Participants in Corporate Governance -- The Picture Begins to Change -- Reporting Proxy Votes -- Mobilizing Institutional Investors -- The Rights and Responsibilities of Ownership -- Acting Like Owners -- "The Proof of the Pudding" -- Executive Compensation -- How Did It Happen? -- The Ratchet Effect -- What's to Be Done? -- Consider the Cost of Capital -- Slight Progress on Reform -- Corporate Political Contributions -- "The Procedures of Corporate Democracy" -- Chapter 4: The "Mutual" Fund Culture-Stewardship Gives Way to Salesmanship -- An Industry Changes -- The Stunning Growth in Mutual Fund Assets -- The Sea Change in Investment Operations -- The Rise of "Product Proliferation" -- Born to Die -- Costs and Performance -- Fund Costs Soar -- Costs and Returns -- The Cost of Unfortunate Investor Choices -- "The Good Old Days" -- The Conglomeratization of the Mutual Fund Industry -- The Conglomerates Dominate the Fund Industry -- "Trafficking" in Management Contracts -- Corporate Structure and Fund Performance -- Likelihood of Change -- Fund Organization Structure-It Makes a Difference -- Strategy Follows Structure -- Vanguard's Structure and Strategy -- Building a Fiduciary Society -- "This Is a Fiduciary Business" -- Chapter 5: Are Fund Managers True Fiduciaries?: The "Stewardship Quotient" -- Enter Attorney General Spitzer -- Where Should Fund Investors Turn? -- A Challenge to Judgment -- The Stewardship Quotient -- Standard 1: Management Fees and Operating Expense Ratios -- Standard 2: Portfolio Turnover -- Standard 3: Equity Diversification -- Standard 4: Marketing Orientation -- Standard 5: Advertising -- Standard 6: Shelf Space -- Standard 7: Sales Loads -- Standard 8: Shareholder Stability.

Standard 9: Limitations on Fund Size -- Standard 10: Experience and Stability of Portfolio Managers -- Standard 11: Insider Ownership -- Standard 12: Organization of Manager -- Standard 13: Composition of Boards -- Standard 14: Board Leadership -- Standard 15: Regulatory Issues -- Is the Fox in the Henhouse? -- Chapter 6: The Index Fund: The Rise of the Fortress of Long-Term Investing and Its Challenge from Short-Term Speculation -- Part I -- A Brief History of the First Index Mutual Fund: The Paradigm of Long-Term Investment -- The Professor, the Student, and the Index Fund -- The Triumph of Indexing -- Part II -- The Invasion of the ETF -- A Brief History of the ETF -- The Un-Proof of the Pudding -- ETFs: An Independent (and Intelligent) Appraisal -- The Future of Index Funds -- Chapter 7: America's Retirement System: Too Much Speculation, Too Little Investment -- An Introductory Note -- The Inadequacy of Our National Savings -- "The Seven Deadly Sins" -- Deadly Sin 1: Inadequate Retirement Accumulation -- Deadly Sin 2: The Stock Market Collapse -- Deadly Sin 3: Underfunded Pensions -- Deadly Sin 4: Speculative Investment Options -- Deadly Sin 5: Wealth-Destroying Costs -- Deadly Sin 6: Speculation in the Financial System -- Deadly Sin 7: Conflicts of Interest -- Extracting Value from Society -- Our Retirement System Today -- Focusing on 401(k) Retirement Plans -- A Deeply Flawed System -- The New Pension Plan -- What's to Be Done? -- Simplify the DC System -- Get Real about Stock Market Return and Risk -- Reduce Participant Flexibility -- Own the Stock Market -- Balance Risk and Return through Asset Allocation -- Focus on Mutuality, Investment Risk, and Longevity Risk -- What Would an Ideal Retirement Plan System Look Like? -- Chapter 8: The Rise, the Fall, and the Renaissance of Wellington Fund: A Case Study-Investment Wins, Speculation Loses.

Introduction -- Part I -- Walter Morgan: Wellington's Founding Genius1 -- What's in a Name? -- Part II -- O Pioneers! -- Massachusetts Investors Trust (MIT) -- State Street Investment Trust -- Incorporated Investors -- Scudder Stevens & Clark Balanced Fund -- Century Shares Trust -- Pioneer Fund -- What Explains the Wellington Advantage? -- Steady Long-Term Growth, Once Interrupted -- Part III -- Wellington Fund Strategy and Returns 1929-2012 -- Risk and Return -- The Rise: Solid Returns, Later Eroding (1929-1966) -- The Fall: Wellington Fund's Nadir (1967-1978) -- The Renaissance (1978-2012) -- "Back to Basics" -- Wellington Management Does the Job -- Asset Growth Rebounds -- Part IV -- Strategy + Implementation - Costs = Superior Returns -- Chapter 9: Ten Simple Rules for Investors and a Warning for Speculators -- Summing Up -- Buy Broad Market Index Funds -- Wellington Fund and the Index Fund -- Reversion to the Mean (RTM) is a Virtual Certainty -- Nothing Is Forever: Eight Sobering Examples of Reversion to the Mean -- Ten Simple Rules for Investment Success -- Rule 1: Remember Reversion to the Mean -- Rule 2: Time Is Your Friend, Impulse Is Your Enemy -- Rule 3: Buy Right and Hold Tight -- Rule 4: Have Realistic Expectations: The Bagel and the Doughnut -- Rule 5: Forget the Needle. Buy the Haystack -- Rule 6: Minimize the Croupier's Take -- Rule 7: There's No Escaping Risk -- Rule 8: Beware of Fighting the Last War -- Rule 9: The Hedgehog Bests the Fox -- Rule 10: Stay the Course! -- Appendix I: Performance Ranking of Major Mutual Fund Managers-March 2012 -- Appendix II: Annual Performance of Common Stock Funds versus S&P 500, 1945-1975 -- Appendix III: Growth in Index Funds-Number and Assets, 1976-2012 -- Appendix IV: Wellington Fund Record, 1929-2012 -- Appendix V: Wellington Fund Equity Ratio and Risk Exposure (Beta), 1929-2012.

Appendix VI: Wellington Fund Performance versus Average Balanced Fund, 1929-2012 -- Appendix VII: Wellington Fund Expense Ratios, 1966-2011 -- Index.