“I never ask if the market is going to go up or down because I don’t know, and besides it doesn’t matter. I search nation after nation for stocks, asking: ‘Where is the one that is lowest-priced in relation to what I believe it is worth?’ Forty years of experience have taught me you can make money without ever knowing which way the market is going.”–A 1978 Forbes cover story on Sir John Marks Templeton (Who is also the author of the quote we chose to display on our Web site.)
I’m a big believer in heroes. They remind us that something can be built from nothing, that victory can be snatched from the jaws of defeat, that we should aim high, and that we should never give up.
One of my heroes passed away last week. His name was John Marks Templeton. He was 95 years old and he was a Knight Bachelor, earning that recognition from Queen Elizabeth II for his philanthropic efforts.
Sir John’s life began simply enough, in the town of Winchester, Tennessee. He graduated from Yale with a degree in economics, top of the class. He was a Rhodes Scholar at Balliol College, University of Oxford. And he was a first-class investor, starting on Wall Street in 1937, founding the Templeton Funds and eventually selling them to Franklin Group for $440 million.
John was a pure value investor, with a very long-term perspective and an appreciation of global markets. The legend is that in 1939, when John thought the market had fallen far enough, and many good stocks were dirt cheap, he borrowed money and bought shares of every stock trading under a dollar. There were 104 of them; 37 were already in bankruptcy. Three years later, he had a profit on 100 out of 104!
The key to that success, like his others, was in daring to look where others feared to look, and to invest when others feared to invest. He was the first major U.S. investor to go global; he prospered by investing in the most bargain-priced economies, and then waiting patiently for prices to rise. And he was always optimistic about the future.
I’m thinking that right now Sir John would be checking his Watch List, looking at stocks trading under $1, at companies in or near bankruptcy, and at stocks that have fallen 90% this year. And I’m thinking he’d be finding some bargains.
It’s not our style at Cabot to simply buy cheap and then hold for three years, but if you wanted to do that, the present time–when Americans are beginning to fear the stability of their financial institutions and the economy appears to be going to hell in a handbasket– looks like a good time to pull the trigger.
This is taken from the July 16 issue of Cabot Wealth Advisory written by Timothy Lutts.