فصل 6 بخش 12

CHAPTER 6.12

SIR JOHN TEMPLETON: THE GREATEST INVESTOR OF THE 20TH CENTURY?

Founder of Templeton Mutual Funds; Philanthropist; Creator of the £1 Million Templeton Prize

Sir John Templeton wasn’t just one of the greatest money masters of all time, he was one of the greatest human beings who ever lived. And I had the honor of counting him as one of my mentors. His motto, “How little we know, how eager to learn,” guided his long and dazzling life as an investment pioneer, iconoclast, spiritual seeker, and philanthropist. Sir John was known for his ability to look at the most difficult situations in the world and find a way to take advantage of them for the greater good.

John Templeton was not always known as “Sir John.” He came from humble beginnings in a small town in Tennessee, where he was reared to value thrift, self-sufficiency, and personal discipline. He worked his way through Yale and Oxford, and got his first job on Wall Street in 1937, in the depths of the Great Depression. He was the original contrarian, who believed in buying shares at “the point of maximum pessimism.” When everyone else thought the world was going to end, John thought it was the right time to invest. When everyone else thought, “Oh my God! These are the greatest times in history!”—that was when it was time to sell.

He first put his theory to the test in the fall of 1939. With the Depression still raging and Hitler’s troops rolling into Poland at the start of World War II, John Templeton decided to take all the money he had saved and borrow some additional money as well and buy $100 worth of every stock valued at $1 or less on the New York exchanges. That portfolio became the basis of a vast personal fortune and asset management empire. He also became a pioneer in international investing. While the rest of Americans refused to look beyond US borders, John was scouring the world for opportunities.

And as his fortune grew, so did his commitment to giving back. In 1972 he established the world’s largest annual award given to an individual, bigger than the Nobel Prize, honoring spiritual achievements. Mother Teresa was the first recipient of the Templeton Prize. His foundation also funded research in science and technology, and in 1987 Queen Elizabeth knighted him for his enormous contributions to humanity.

Sir John continued to speak and write and inspire millions with his humble message of integrity, entrepreneurship, and faith, right up to the time of his death in 2008 at the age of 95. (Incidentally, he had accurately predicted the collapse of the housing bubble that year.) The following is an excerpt from an interview I conducted with him just months before his passing. His kindness shines through in every answer, as he shares his philosophy that the same qualities that make you a great investor can also make you a great human being.

TR:

Sir John, most people seem to be either money oriented or spiritually oriented—they have to be one or the other—but you seem to have found a way to integrate these two in a truly natural and real way in your life. Can people integrate both in their lives?

JT:

Definitely! There is no disparity. Would you want to deal with a businessman you could not trust? No! If a man has a reputation for not being trustworthy, people will run away from him. His business will fail. But if another man has high ethical principles, high spiritual principles, he will try to give to his customers and his employees more than they expect. If so, he will be popular. He will have more customers. He will make more profit. He will do more good in the world, and thereby he will prosper himself and have more friends and be more respected.

So always start out to give more than is expected from you, to treat the other person more than fairly, and that is the secret of success. Never try to take advantage of anyone or to hold anyone back in their own progress. The more you help others, the more prosperous you will be personally.

TR:

What was your first investment? What drew you to it, and how did it turn out?

JT:

I was just getting started when it was the beginning of the Second World War in September 1939. We had just finished the world’s greatest depression and there were many bankrupt companies. But a war causes a demand for almost every product, so during a war almost every company will prosper again. So I gave a stockbroker an order to buy $100 worth of every stock on both exchanges selling for $1 or less, and there were 104 of them. And out of those, I made a profit on 100 and lost money on only four.

So three years later, when my wife and I had an opportunity to take over this small practice of a retiring investment counselor, we had the savings needed to do that! We began with no clients in Radio City in New York and worked there for 25 years, continuing to save 50 cents out of every dollar so that we could build up our assets for our retirement and for charity.

TR:

Wow! And you got quite a bit of a return saving 50 cents out of every dollar, Sir John. Most people today would say “That’s impossible! I can’t save fifty percent of my money and invest it.” But that’s how you built from nothing, and you did this during the Depression! I’ve also read that if someone invested $100,000 dollars with you [in 1940], never put another dime in, and forgot about the money, by 1999, that would have been worth $55 million! Is that the accurate number?

JT:

Yes, provided they reinvested their distributions.

TR:

Let me ask about your investing philosophy: in the past, you’ve said to me, “Not only do you buy at maximum pessimism, but you want to sell at the peak of optimism.” Is that correct?

JT:

That’s correct. There’s a good saying there, Tony. “Bear markets start on the time of pessimism. They rise on the time of skepticism. They mature on the time of optimism, and they end on the time of euphoria!” That always happens in every bull market, and it helps you determine where you are. If you just talk with enough investors to find their psychology, you can tell whether the market is still safe at a low level or high at a dangerous level.

TR:

What do you think is the single biggest mistake investors make?

JT:

The great majority of people do not build up any wealth because they do not practice the self-discipline of saving some of their income every month. But beyond that, once you’ve saved that money, then you have to invest it wisely in good bargains, and it’s not easy. It’s very rare for any one person, particularly any one person working in just their spare time, to select the right investments. Any more than you would want to be your own medical doctor or your own lawyer, it’s not wise to try to be your own investment manager. It’s better to find the best professionals; the wisest security analyst to help you.

TR:

When I was talking to some of your associates down in the Bahamas, I was asking them, “What does he invest in?” and they said, “Anything! He’ll buy a tree if he thinks he can get a good deal on it.” Then I said, “How long will he hang on to it?” and they said, “Forever! Basically until it’s worth more!” Sir John, how long do you hang on to an investment before you know to let it go? How do you know if you’ve made a mistake? How do you know when it’s time to actually liquidate?

JT:

That is one of the most important questions! Many people will say, “I know when to buy, but I don’t know when to sell.” But over these 54 years that I’ve been helping investors, I think I have the answer, and that is: you sell an asset only when you think you have found a different asset that’s a 50% better bargain. You search all the time for a bargain, and then you look at what you now own. If there’s something in your present list that is a 50% less good bargain than the one you found, you sell the old one and buy the new one. But even then, you’re not right all the time.

TR:

Sir John, why should Americans feel good about investing outside their own country?

JT:

Think about this: if our job is to find the best opportunities, surely we will find more opportunities if we do not limit ourselves to just any one nation. Likewise, perhaps we will find better opportunities if we are able to look everywhere rather than just one nation. But most important is that it does reduce your risk because every nation has bear markets. Usually twice every 12 years, there’s a severe bear market in a major nation, but they do not occur at the same time. So if you are diversified, having your assets in many nations, you do not have to suffer through the bear market in one nation as a person who had all of his eggs in one basket would.

We have always advised our investors to be diversified—not only diversified into more than one corporation and diversified into more than one industry, but also diversified into more than one nation in order that they will get greater safety and greater potential profit.

TR:

What do you think it is that has separated you from all the other investors out there? What’s made you one of the greatest investors of all time?

JT:

Thank you. I do not regard myself as that. We’ve not always been right. No one is, but we have tried to be a little better than the other competitors and to give more than is expected from us and always to try to improve our methods, to use new methods in order to stay ahead of the competition. If there’s any secret in it at all it is this: do not try to be a go-getter. Try to be a go-giver!

TR:

Sir John, there’s so much fear out there today on so many levels of society. How do we deal with fear?

JT:

To overcome fear, the best thing is to be overwhelmingly grateful. If you wake up each morning and think of five new things for which you’re overwhelmingly grateful, you’re not likely to be fearful, you’re likely to radiate your optimism, your attitude of gratitude, you’re likely to do things in a better way, draw more people to you. So I would think an attitude of gratitude will prevent a life of fear.

TR:

I would love to hear through your own perception: Who is Sir John Templeton? What is your life really about? In the end, how do you want to be remembered?

JT:

I am a student, always trying to learn. I am a sinner. All of us are. I’ve tried to be better day by day, and particularly I try to keep asking myself, “What are the purposes of God? Why did God create the universe? What does God expect of his children here?” And the closest you can come in just a few words is: He expects us to grow spiritually. He gives us trials and tribulations just like you have examinations in school, because it may help you to grow into a greater soul than you would have otherwise. So life is a challenge. Life is an adventure. It’s a marvelous, exciting adventure. All of us should do the very best we can as long as the Lord allows us to be on this planet.