Sir John Templeton: The Contrarian Investor

Sir John Templeton, the contrarian investor, philanthropist and mutual fund manager who founded the Templeton Growth Fund in 1954. Templeton was an avid traveler and is known for his global investments. He had a fascinating journey that began in a small town far from Wall Street. Sir John Templeton died on July 8, 2008.

Early Life and Education

John Marks Templeton was born on November 29, 1912, in Winchester, Tennessee. Despite a modest upbringing, his ambition burned bright. He followed in his brother’s footsteps and enrolled at Yale University. The Great Depression presented a challenge, but Templeton’s resourceful spirit shone through. He juggled scholarships, odd jobs, and even his poker winnings (a game he excelled at!) to finance his education.

Templeton’s academic talents shone at Yale University. He graduated near the top of his class in 1934, excelling in his studies while serving as an assistant business manager for the campus humor magazine, the Yale Record and even became President of Phi Beta Kappa, the prestigious academic honor society. Interestingly, Templeton initially considered a career in religious service, reflecting his thoughtful and inquisitive nature.

Templeton’s academic achievements earned him the coveted distinction of a Rhodes Scholarship. This prestigious award allowed him to pursue further studies at Balliol College, Oxford University. Here, he delved into the world of law, graduating with a Master of Arts degree in 1936. Interestingly, he was also a student of Benjamin Graham, the “father of value investing,” whose teachings would significantly influence Templeton’s investment philosophy.

Templeton’s time wasn’t confined to classrooms. He was an avid traveler, visiting 35 countries before he even embarked on his Wall Street career in 1938. These travels instilled in him a global perspective that would become a cornerstone of his investment philosophy. He saw vast potential in international markets, a viewpoint that would set him apart from his peers.

Templeton Growth Fund

Sir John Templeton, a legendary investor, wasn’t afraid to go against the grain. This contrarian approach fueled the success of the Templeton Growth Fund, a mutual fund he launched in 1954 that became synonymous with global investing.

A Contrarian at Heart

Templeton’s philosophy revolved around finding value where others saw despair. He believed in buying stocks during periods of “maximum pessimism,” like after a market crash or when a particular industry was out of favor. This “buy low, sell high” strategy sounds simple, but it requires a strong stomach for volatility and a deep belief in a company’s long-term potential.

Taking Global by Storm

The Templeton Growth Fund put this philosophy into action on a global scale. Before the term “emerging markets” was even coined, Templeton was investing in companies in developing economies. He saw tremendous potential in these markets, believing they offered higher growth opportunities than saturated developed markets.

Remarkable Results

The Templeton Growth Fund’s performance reflected Templeton’s vision. With dividends reinvested, a $10,000 investment at the fund’s inception could have grown to a staggering $2 million by 1992. This translates to an average annual growth rate of over 15% for nearly four decades! Money magazine even crowned Templeton “arguably the greatest global stock picker of the century” in 1999.

A Legacy of Innovation

In 1992, Sir John Templeton sold the Templeton Funds to the Franklin Group. Templeton’s influence extended far beyond the Templeton Growth Fund. He is considered a pioneer of global investing, paving the way for a new generation of investors to look beyond their borders. His success story continues to inspire investors today, reminding us of the power of patience, a contrarian approach, and a global perspective.

john templeton foundation logo

The John Templeton Foundation

Founded by the investor himself, Sir John Templeton in 1987, the foundation has become a major force in supporting research that delves into humanity’s deepest questions.

But what exactly does the John Templeton Foundation do? Here’s a glimpse into their multifaceted endeavors:

Funding the Frontiers of Knowledge

The foundation is a major grant-making organization, awarding millions annually to researchers across a vast spectrum. From physics and biology to psychology and philosophy, they fund projects that explore the mysteries of the universe, the human mind, and the nature of existence.

This interdisciplinary approach is key to their mission. Templeton believed that scientific inquiry and spiritual exploration could not only coexist but also inform each other. By fostering collaboration between these seemingly disparate fields, the foundation hopes to unlock new avenues for understanding ourselves and the world around us.

The Templeton Prize: A Beacon of Big Ideas

Perhaps the foundation’s most well-known initiative is the Templeton Prize. Often dubbed the “Nobel Prize for Spiritual Life,” it recognizes exceptional thinkers who contribute to humanity’s understanding of the divine or the complexities of human existence. Past laureates include Mother Teresa and Desmond Tutu, highlighting the foundation’s commitment to a broad and inclusive perspective. Primatologist, conservationist, and environmentalist, Jane Goodall won the 2021 Templeton Prize.

Beyond Academia: Inspiring Public Dialogue

The John Templeton Foundation isn’t just about funding research within the ivory tower. They actively work to share these ideas with the wider public. Through their website, “Templeton Ideas,” they offer articles, podcasts, and videos featuring thought leaders, scientists, and theologians discussing these crucial topics.

This dedication to public engagement ensures that these complex questions aren’t confined to academic circles. By fostering open discussion, the foundation empowers individuals to explore their own beliefs and grapple with the big issues that shape our lives.

John Templeton Quotes

Here are 10 top quotes by Sir John Templeton, focusing on his investment wisdom and broader outlook on life:

  1. “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” This quote captures Templeton’s belief in contrarian investing, buying when others are fearful and selling when everyone is optimistic.
  2. “The difference in effort between doing a good job and a superb job is often the difference between winning and losing.” Templeton emphasizes the importance of going the extra mile for success.
  3. “Outperforming the majority of investors requires doing what they are not doing. Buying when others have despaired, and selling when they are full of hope, takes fortitude.” This quote reiterates the need for contrarian thinking in the market.
  4. “Focus on value because most investors focus on outlooks and trends.” Templeton highlights the importance of intrinsic value over market sentiment.
  5. “The greatest opportunity for making big money in the market is when there is the greatest discrepancy between value and price.” This quote emphasizes buying undervalued assets.
  6. “To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward.” Templeton acknowledges the difficulty but potential payoff of contrarian investing.
  7. “It is nice to be important, but it’s more important to be nice.” This quote showcases Templeton’s belief in the importance of character.
  8. “Never forget: the secret of creating riches for oneself is to create them for others.” Templeton suggests that true wealth comes from helping others.
  9. “The four most expensive words in the English language are, ‘This time it’s different.'” Templeton warns against the belief that past behavior won’t repeat itself.
  10. “There will always be bull markets followed by bear markets followed by bull markets.” This quote emphasizes the cyclical nature of the market.

John Templeton Books

Sir John Templeton, though a brilliant investor and philanthropist, didn’t write many books himself. His son, John Marks Templeton, however, authored several books on faith and finance, some of which include:

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