Investor Lauren Templeton shares some life wisdom and investing lessons from her great-uncle, Sir John Templeton in this VIC 2012 video.
By way of background, John Templeton was a pioneer of global share investing who founded the Templeton Growth fund in 1954. As his wealth increased, he also became known for his philanthropic efforts and writings. In the 1960s, he renounced his U.S. citizenship (an increasingly popular move among the rich of late) and continued to live in the Bahamas as a Bahamian citizen.
In her talk at the Ben Graham Centre for Value Investing, Lauren Templeton shares some insights on Sir John's investment philosophy and his life. A few notable lessons and quotes:
1. Born in Tennessee, Templeton was an excellent student who attended Yale and Oxford. While at Yale, young John found he had to work to pay for a part of his schooling. His skill with probabilities helped him earn a good part of the money playing poker.
2. After studying at Oxford, Templeton took a 40-nation tour of the world. He was gone so long that his mother thought he had passed away! His travels provided a "bedrock of geopolitical knowledge" to guide his investing.
3. Lauren relates the story of his first trade in "maximum pessimism", the famous deal in which Templeton borrowed $10,000 and purchased shares of all the U.S. companies trading below $1 a share. Even though many of the companies were facing bankruptcy at the time of his purchase (on the eve of World War II), most turned a profit and he sold his shares for a $40,000 profit a few years later.
4. Listed among his personal attributes: self-reliance, flexibility, sense of stewardship, a drive towards diversity (seeking opportunities globally), a bargain-hunting mentality, devoting time to study, ability to retreat from daily pressures, developing a broad range of friendships and contacts, positive thinking, patience, simplicity, and great intuitive powers.
5. "To buy when others are despondently selling, and to sell when others are avidly buying, requires the greatest fortitude and pays the greatest ultimate reward."
6. "If you want to have better performance than the crowd, then you must do things differently from the crowd."
7. John was a thrifty saver and he advised his family and friends to live simply and save 50 percent of their income. He viewed his savings as the seed corn of future investments and opportunities.
8. Templeton operated on a truly long-range view. He planned in advance for market panics by drawing up a list of securities to buy at bargain prices. When he discussed his charitable foundations, he spoke of finding the best investment opportunities for the next 200 years. After searching the globe for property investments that might suit his foundation, he still came back to stocks.
There's a good deal more in this video on behavioral finance and human behavior in market panics. As Lauren Templeton says, "If you're aware of your biases you'll become a better investor.".
Enjoy the video and the insights. You'll find more from Sir John and friends below.
1. John Templeton's last memorandum from 2005.
2. Lessons from Hedge Fund Market Wizards: Ray Dalio.
3. Jim Rogers interview: lessons on life and investing.