John McQuown, Who Pioneered Index Funds and Transformed Investing, Dies at Age 90

[mahatmakanejeeves]

The article originally appeared in the "Weekend" edition of this weekend's "The Wall Street Journal." You can also read the story at MSN, from which I derived my excerpts.

John McQuown, Who Pioneered Index Funds and Transformed Investing, Dies at Age 90

John McQuown, Who Pioneered Index Funds and Transformed Investing, Dies at Age 90

The Illinois native jumped from family farm to mechanical engineering and then led a ‘Manhattan Project’ of finance

By James R. Hagerty
https://twitter.com/jamesrhagerty
[e-mail]
Oct. 31, 2024 10:00 am ET

John McQuown had a degree in mechanical engineering as well as a Harvard M.B.A. when he began his Wall Street career in 1961. He liked making decisions based on proven formulas. ... So he found it odd that fund managers of that era chose stocks largely on the basis of their hunches and lacked reliable data on historical performance. Determined to find something more solid, McQuown worked with computer programmers to search for data-driven clues to investment success. Those proved elusive, and McQuown was increasingly impressed by the ideas of University of Chicago economists who argued that it was futile to try to beat the market in the long run.

In 1971, he led a team at Wells Fargo Bank that created one of the first index funds, aimed at replicating overall market performance rather than picking stocks—a strategy regarded by traditional fund managers as lunacy. The Wells Fargo fund was for institutional clients. John C. Bogle, founder of Vanguard Group, launched an index mutual fund in 1976, introducing the concept to individual investors.

{snip}

McQuown is survived by his wife, Leslie McQuown; their son, Alex Morgan McQuown, and a sister, Diane Woodward. ... His success allowed him to acquire land in California’s Sonoma Valley and create the Stone Edge Farm, a producer of Cabernet Sauvignon wines, heirloom vegetables and olive oil. At Stone Edge, he assembled another brainy team, this time to create a “microgrid” of solar and other alternative-energy sources to power the farm and serve as a demonstration project. ... Some 40 years after leaving the family farm in Illinois, McQuown was back to tilling the soil. It was another surprising twist in his story, illustrating one of his favorite maxims: “If the universe has a single generating function, it’s serendipity.”

Jason Zweig contributed to this article.

Write to James R. Hagerty at [e-mail].

[bucolic_frolic]

1. Just like Leroy said, in Crocodile Dundee II

"richest man in the whole damn cemetery!"

What good is investing? It feeds the pyramid just like working and shopping. Then you die.

[RussellCattle]

2. I like his line about serendipity. True.