The investor library

John Templeton

1912-2008 · Templeton Growth Fund · Bought when there was no reason to.

Overview

Every investor says they would buy when others are selling. Templeton is the evidence that it can actually be done, for fifty years, on purpose — and the evidence of what it costs. He bought American shares the week Germany invaded Poland, bought Japan when Japan was considered uninvestable, sold it near the top, and was still shorting the dot-com bubble at eighty-seven. Money magazine called him arguably the century's greatest global stock picker.

“The four most expensive words in the English language are “this time it's different.””

John Templeton

Background

Born in Winchester, Tennessee, 1912, into no money. He waited tables and played poker through Yale, then went to Balliol College, Oxford, as a Rhodes Scholar. Afterwards he spent a year moving through some thirty-five countries on almost nothing — which is where the whole career came from. He had stood in the places everyone else was pricing from a desk in New York. He set up on his own in 1937, in the depths of the Depression.

Style, and how it evolved

He started as a straight Graham bargain hunter: buy what is statistically cheap, ignore the story. Two things moved him off it.

Geography. Everyone else screened America. He screened the world, and found the same business priced differently depending on which flag it flew. That gap was his career, and it was as much an access advantage as an insight one — for years he could buy things most foreign investors simply could not.

Pessimism as the input rather than the obstacle. He stopped hunting for cheap and started hunting for hated, on the reasoning that a price is only ever set by the people still willing to trade it. His name for the moment to buy — the point of maximum pessimism — is the method in four words.

What never changed is the more revealing part. Buffett moved from cheap to wonderful. Templeton stayed with cheap for fifty years, and solved the quality problem a different way: by owning a great many things at once rather than by raising the bar on any one of them.

Then he stopped. He sold the funds in 1992 and gave the last third of his life to the Foundation, funding research into gratitude, humility and character on the explicit conviction that these compound the way capital does — that what gets measured and attended to grows, and what is ignored withers. He had already run that experiment once, with money. The Templeton Prize had been running since 1972; he simply moved the whole effort across.

Performance

paid offa decisiona losswalked awaythe lifeshaded columns are the crashes — hover any mark

Templeton Growth Fund, 1954-1992: about 15% a year for thirty-eight years. Ten thousand dollars at launch, dividends reinvested, was worth roughly two million by the time he sold the funds to Franklin Resources for about $440m in 1992.

✓ documented · ○ rests on family accounts rather than a filing

Case studies

1939 — a hundred and four stocks under a dollar. War had just been declared. He borrowed ten thousand dollars and bought a hundred shares of every stock on the New York exchange trading below a dollar: 104 companies, 34 of them already in bankruptcy. He sold about four years later for roughly four times the money. Four went to zero. The mechanism: war is a demand shock, and a demand shock is exactly what an over-supplied depression economy had been missing. The sellers could only see the war. ○

1960s to 1989 — Japan, at both ends. He bought Japan at about four times earnings, when foreigners were barely permitted to and "Japanese" still meant cheap goods, and held it through the re-rating. Then he sold, above thirty times, before the 1989 top. Selling was the harder half and the more instructive: he left because the price had stopped paying him, not because he had formed a view on Japan. ✓

2000 — shorting the lock-ups. At eighty-seven, he shorted around eighty-four technology stocks days before insider lock-up periods expired, reasoning that founders sitting on paper fortunes would sell at the first legal opportunity. Reported at roughly $90m. Note what this trade actually was: a catalyst on a calendar, not a valuation call. ○

The other side of the record

A record this good is where scepticism is most worth spending, so:

Maximum pessimism has a terrible base rate. Most hated things are hated for good reason. Templeton's own answer to this was diversification — and diversification is an admission that the individual call could not reliably be made. He said as much: about a third of his recommendations were wrong. The method works at the level of a hundred positions. It is not obvious it works at the level of ten.

The 1939 trade cannot be run again. There is no list of 104 sub-dollar names on a major exchange today, and a third of that basket was already bankrupt — where the recovery goes to creditors, not shareholders. The trade also ran into one of the strongest market recoveries on record, so some of that four-times is the decade, not the man.

The global edge has been competed away. Screening the world was a genuine advantage in 1954 and is free in 2026. What is left of that idea is the harder, slower part — actually understanding a business in a market you do not live in.

Cheapness has had a long bad run. The spread between cheap and expensive has not paid the way it did for most of his career, and a profile that skips that is selling a method rather than describing one.

Key lessons

• The sell is the harder half. Japan is the lesson, not the buy. He left a market he had been right about for twenty years because the price had stopped compensating him — which is a different and rarer discipline than finding the entry.
• Keep the record, because conviction restates itself. He knew a third of his calls were wrong because he counted. Confidence, a good argument and a rising price all feel like separate confirmations and are usually the same one wearing different clothes.
• The other side is working too. Every transaction has two sides, and the one that did more work usually wins. He called it giving the extra ounce.
• Patience is the fee, not the virtue. Willingness to wait year after painful year, when almost nobody is.
• "This time it's different" — his four most expensive words in the language.
• What you focus on expands. He believed it literally enough to spend thirty years and most of his fortune testing it outside markets. Inside them it is a warning as much as a method: the trade you retell is the trade you go looking for again. Templeton is remembered for a war-week basket of penny stocks and a short at eighty-seven, and almost never for the thirty-eight unremarkable years in between that produced the actual money.

Reading and links

• 16 Rules for Investment Success — Templeton's own list, and the primary source.
• Investing the Templeton Way — Lauren C. Templeton and Scott Phillips. The closest thing to a method book, and the origin of most of the family-account figures.
• Templeton's Way with Money — Jonathan Davis and Alasdair Nairn. The rigorous one.
• The Templeton Touch — William Proctor.
• John Templeton Foundation — templeton.org · Templeton Prize — templetonprize.org

Marked ✓ where the figure is documented and ○ where it rests on family accounts rather than a filing. Investing biography is heavily mythologised and the famous numbers drift with each retelling; the versions here are the conservative ones. This is a profile of an investor, not a view on any security.

Primary sources

Go to the thing itself. These are the subject’s own publications or an institution’s own site. No bookseller links, and no referral arrangements — a reading list that earns per click is not a reading list.

• The John Templeton FoundationWhere the last third of his life went.
• The Templeton Prize

Profiles of investors, not views on any security, and not personal advice. Figures are marked ✓ where they are documented and ○ where they rest on secondary or private accounts — investing biography is heavily mythologised and the well-known numbers drift with each retelling. Capital is at risk.

Corrections and right of reply. Where a criticism is made of a named person it is stated as a specific measure over a stated period, attributed to its source, and separated from opinion. Assessments are opinion, honestly held, on facts believed accurate at the date shown. If anyone profiled here — or anyone acting for them — believes a fact is wrong, it will be corrected promptly and visibly, and a reply will be published alongside it on request.

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