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John Templeton

John Templeton was born to a poor family in 1912 in Winchester, Tennessee. He received a scholarship to attend Yale University and graduated in 1934 at the top of his class with an economics degree. He was a Rhodes Scholar at Oxford where he graduated in 1936 with a master of arts in law. After graduating from Oxford, Templeton returned to the United States and took up a trainee position at Fenner & Beane, one of Merrill Lynch’s predecessors, in New York.

He then went on to co-find a new investment firm during the Depression in 1937. This firm was called Templeton, Dobbrow & Vance and became very successful. In 1939, with war ravaging Europe, Templeton purchased $100 worth of every stock that was trading at less than $1 on both the American and New York stock exchanges. He once said that people should "Invest at the point of maximum pessimism." There were 104 companies (34 of these ended up being bankrupt), so his total expenditure was around $10,400. In 1943 he sold these stocks for over $40,000. Templeton, Dobbrow & Vance went on to hold assets valued at $300 million and managed eight mutual funds.

Templeton, Dobbrow & Vance restructured and became known as Templeton Damroth and then, in 1962, Templeton sold his share of the firm. He spent the following 25 years establishing some of the biggest and most profitable global investment funds in the world. In 1992 his Templeton funds were sold to the Franklin Group.

Templeton created the Templeton Growth Fund (based in Nassau, the Bahamas) in 1954 and the Templeton World Fund in 1978. With these funds he pioneered the concept of globally diversified mutual funds, and in doing so, became a billionaire. The Templeton Growth Fund recorded an average annual return of 13.8% from 1954 until 2004. This significantly outperforms the 11.1% of the S&P 500.

Templeton utilized a contrarian investment style and it has been said, "He bought low during the Depression, sold high during the internet boom and made more than a few good calls in between." He focused on looking for investments with high values in many different countries He called this “bargain hunting”. Templeton described his own investment style as the "search for companies around the world that offered low prices and an excellent long-term outlook." Templeton rejected the idea of technical market analysis and said, "You must be a fundamentalist to be really successful in the market."

The value-contrarian style of Templeton is highlighted by his search for neglected stocks that other investors were paying no attention to. He was assisted in this process by the fact that he spent a lot of time in Lyford Cay in the Bahamas. This location was populated and visited by many successful international business people and this allowed for an easy exchange of ideas and opinions. Templeton preferred networking in this environment rather than dealing with Wall Street contacts.

When asked about conducting his business from the Bahamas, Templeton once remarked, "I've found my results for investment clients were far better here than when I had my office in 30 Rockefeller Plaza. When you're in Manhattan, it's much more difficult to go opposite the crowd." Similar to Phillip Fisher, Templeton used the people that he met in the Bahamas to obtain valuable investment information regarding target and market conditions throughout the world. This was one way that he distinguished himself from the crowd. He is quoted as saying: "If you want to have a better performance than the crowd, you must do things differently from the crowd."

Money Magazine said in 1999 that Templeton is "arguably the greatest global stock picker of the century. Living in the Bahamas, Templeton became a naturalized British citizen and was knighted by Queen Elizabeth II in recognition of his great success. After retiring from investments, Templeton established the John Templeton Foundation to handle his active international philanthropy. He focuses this on charities that support spiritual and scientific research.

John Templeton’s publications include:

Golden Nuggets from Sir John Templeton

Templeton Plan: 21 Steps to Personal Success and Real Happiness

Publications about John Templeton include:

Spiritual Investments: Wall Street Wisdom from the Career of Sir John Templeton

Investing the Templeton Way: The Market-Beating Strategies of Value Investing's Legendary Bargain Hunter

About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".

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