we will be speaking to jack fama, -- bogle, eugene and robert shiller. stay with us. ♪ >> welcome back to "market makers." consumer prices rose in march, but it is below the fed's target rate. i want to bring in michael mckee to break this down. ness, ishor, cliff as still here. >> this is not a level or magnitude of change, but direction of change. the fed has been worried about this inflation. wall street has been worried about disinflation on one hand and inflation on the other. prices have been going down slowly for a while. they continue to rise? there is a debate after these numbers came out on twitter. this mean we have turned the corner on inflation? that brings up another issue. are we going to see inflation, the normal price rises, or will acceleration that everyone is worried about because of the fed? concerned about hyperinflation. if anything, one thing people talk a lot about -- we have a real bondhis called yield. if anything, it is a little more scary than the equity chart. expectedd yields minus inflation. bonds are more complicated than

we're back with vanguard founder jack bogle. still with us?ou always. >> you were analyzing the pluses and minuses of high frequency trading. you've long been the champion of the small investor out there. should they be concerned at all about high frequency trading? does it give them a bum deal? >> i don't believe that's the case. actually the way our order system works is smaller orders get taken care of much better than those great big ones. there is in high frequency trading certain amount of front running. we don't know how much that is. we don't know how many orders are cancelled. maybe that's half of all orders that go into the system. we do know somebody gets a penny break, it's paid for by somebody else and one party gets the advantage and one party gets the disadvantage. usually the nature of a penny. i don't see how it's the end of the world. i do think in the long run it's good for fund investors in this sense. it's the cap stone of half a -- >> are you kidding me? >> third time is the charm, maybe? >> wow. that is crazy. all right.

. >>> jack bogle, number nine in valley forge, welcome. good to have you with us.at to be there. i love that introduction. >> did we get it right? >> a little too generous. it made me feel kind of puffed up, which is not the way i usually feel, but it was beautifully done. >> we didn't mean to editorialize that like by you shouldn't be alive, but there are probably some in your industry that wish you weren't, right? >> i think that's probably true. >> jack, let me start with a question. you've had a long career dating back to the 1950s, when you wrote your princeton thesis about indexing and low-cost investing. as you look back, what did you get right and what did you get wrong? >> well, when i got right, it was not only the index fund, a product of a simple mind, you know, if i had been some kind of genius, i would have thought i could beat the market all the time, but i don't have the talent for that. so i did the right thing by my standards and by the simple math of the markets. gross return on the markets minus cost equals no return. that's a formula that's goo

jack bogle took issue with that.ing at trailing -- the fact that the earnings that have come already were at 20 times earnings at these levels. he thinks we're a little expensive in this market. >> that's the point i made. when you look at the small cap space versus large cap, the valuations have been rich coming into 2014. less so in large cap space, so from our perspective, when you look at it from a capeningle, i think that the smaller cap would be a little more pricing. but you also want to look globally. what would be a global credit strategy looking at currencies, looking at security selection and not just taking interest rate risk within a bond portfolio. i think a global one on top of that. >> why did we get this rally right now? six up days in a row. what is that about? >> you know, the dow traded down to the lower end of its range. and there's no real rhyme or reason to my view. market trading with confidence. looks like it's not ready to fail. at the same time, it's not ready to break out. the longer it tr

it was true 25 years ago and will be true 25 years from now. >> jack bogle is number nine. buy into an guard index fund. you said that in your shareholder letter this year. >> people have done very well in investing. they have in cured very little in the way of management costs. they have in cured nothing in the way of traction costs. the companies over the years in the index have done quite well. i think they will do very well if they invest in one now. >> warren, i've been arguing with andrew about you versus peter lynch. now, peter was smart. but he was a stock picker. he would buy, sell. he was a money manager like that. warren, in your portfolio, what's the oldest asset? the one that you bought longest ago? because you guy things and then you sort of are a business operator. or you put management who knows how to run your businesses. you're not buying and selling stocks with the intention of taking a profit on a stock. that's why i think you are different than peter lynch. >> peter was very, very good at what he did. >> he was a money manager, stock picker. what's your

jack bogle, martha stewart, steve jobs, they hit bottom before they rose up to the top. >> if you can'tas a business owner. >> and you shouldn't etry. it was the thing that gave them wisdom or humility and allowed them to get better. both bogle and steve jobs said getting fired is what made them successful. >> that very vivid image that you describe in your piece of steve jobs in the fetal position on his partially furnished home or apartment in silicon valley after he lost his company. rupert murdoch almost lost his company to bondholders of his firm. larry ellison and oracle, he had his dark moments. >> that just seems to be part of the journey. howard shultz lost his company, too, and came back and took starbucks over. in a way, that's the way it has to be. it's a very hard course to be an entrepreneur. there are no owner's manuals, no step by step guide. you will fail and you have to learn from it. >> i don't mean to get dewy-eyed, but a country like american whose hash past time is baseball, where the best hitters fail two out of the three times, we almost celebrate failure, we for

dangote and always fun to share time with jack bogle. we hope you join us at 7:00 p.m. we'll count you down and lead you through the top five at 7:00 p.m. tonight. >>> meanwhile, that would do it for this edition of "power lunch." >> you've done a fantastic job, ty, you and your team. "street signs" begins right now. \s. >>> welcome to "street signs." breaking news. what you are seeing is a live shot of the news conference that is going to start any moment now. the nba is going to be doing a news conference on donald sterling, the owner of the los angeles clippers with regard to his allegedly racist remarks, our very own reporter sarah eisen is also there on spot and will be able to give us analysis and reaction after the news conference. brian is at the milken conference, he says that is the talk of the town. you know it's interesting, there are people out there who say that the nba should perhaps force donald sterling to sell the team, but i would imagine the first and straightest option is going to be just to give him a fine, probably the least effective option, but