Investment Wisdom From The Late Sir John Templeton

by: Franklin Templeton Investments

By Mark Mobius, Executive Chairman, Templeton Emerging Markets Group

John Marks Templeton was born on November 29, 1912, in the small town of Winchester, Tennessee. Living through the Great Depression taught him both determination in the face of difficulties and the value of money. When financial support for his studies at Yale University suddenly disappeared, he persevered with part-time jobs and scholarships to graduate near the top of his class with an economics degree. By 1937, he secured a job as a Wall Street analyst, where he quickly acquired a reputation for astute investing in undervalued stocks. In 1987, Queen Elizabeth II bestowed him the honor of knighthood for his many philanthropic accomplishments. Templeton was a man of many achievements, yet above all else, he prized humility and service.

I first met Sir John more than three decades ago when I was working as an analyst for a broker based in Hong Kong. I traveled periodically to Nassau to meet with the Templeton portfolio management teams based there, which is how he and I first became acquainted. One day Sir John asked me to join his firm to manage a new emerging markets fund that he was starting and was very excited about. I jumped at the opportunity. That was 26 years ago, and our team, now a part of Franklin Templeton Investments, is still going

While Sir John is no longer with us, the lessons I learned from him live on. One of the things that I always found most interesting about Sir John was that even after he became a wealthy man, he lived and worked very simply. He didn't spend a lot of money, and he abhorred waste. For example, rather than discard note paper that had been used, he would cut it up and use the other side instead of purchasing new notepads. It's funny, because it was considered "frugal" then, but today it's called "going green."

This resourcefulness was reflected in how Sir John worked, too. He was constantly reading and studying in order to make the most informed decisions possible.

I learned many things from Sir John, but I think the most important was humility. He always said that we have to be humble, because without humility we won't be able to learn and adapt to changing environments. And he didn't just talk about those things, he really led by example. That's something I try to emulate in my own life.

While the markets have changed quite a bit since I first met Sir John, our core philosophy remains true to his timeless approach. As encapsulated by his "16 Rules of Investment Success," these timeless tenets make for a handy investment philosophy compass, too.

  1. Invest for total maximum real return.
  2. Invest-Don't trade or speculate .
  3. Remain flexible and open-minded about types of investment.
  4. Buy low.
  5. When buying stocks, search for bargains among quality stocks.
  6. Buy value, not market trends or the economic outlook.
  7. Diversify. In stocks and bonds, as in much else, there is safety in numbers.
  8. Do your homework or hire wise experts to help you.
  9. Aggressively monitor your investments.
  10. Don't panic.
  11. Learn from your mistakes.
  12. Begin with a prayer.
  13. Outperforming the market is a difficult task.
  14. An investor who has all the answers doesn't even understand all the questions.
  15. There's no free lunch.
  16. Do not be fearful or negative too often.

Important Legal Information

Dr. Mobius' comments, opinions and analyses are for informational purposes only, may change without notice, and should not be considered individual investment advice or a recommendation to invest in any security or to adopt any investment strategy. Information contained herein is not a complete analysis of every material fact regarding any country, region, or market. All investments involve risks, including possible loss of principal. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in emerging market countries involve heightened risks related to the same factors, in addition to those associated with these markets' smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.