Saturday, July 19, 2008

Obituary: John Templeton

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Sir John knew what he liked. Common stocks, like Dow Jones industrials, were unglamorous but usually dependable. Government bonds were steady, if you picked a country with no trade or fiscal deficits and a high savings rate. He disliked speculation, and any instrument over-geared to make money. But he was open-minded. Some moments were good for Treasuries, some for equities, some for blue-chip stocks. Late in life, he favoured market-neutral hedge funds. Diversity was important, in countries as well as instruments. A journey in 1936 round Europe and the Middle East, sleeping on open decks and chewing dry bread to save money, taught him that investment opportunities lay everywhere he looked.

But most of all Sir John went long on God. As a lifelong Presbyterian with a devout and curious mind, he reckoned that the market price of the creator of the universe was probably 1% of its actual value. The crowd might have lost interest in this underrated stock, so dully and unerringly recommended by theologians and priests down the centuries, but Sir John bought it up on the firm expectation of stellar future earnings. Indeed the divine, he once said, if approached in a humble spirit of inquiry, might turn out to be 3,000 times more than people imagined it was.
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3 comments:

Shane O'Donovan said...

hi there

m name is Shane O'DONOVAN.

I am a investor, trader and a keen follower of sir Johns Templetons teachings in regard to share science ie finacial investing with his openness to religion as a factor in the mechanism of life.

What is your opinion on this young man?

ps i really like your site, my man. keep good work up!

kind regards

Shane

Shane O'Donovan said...

hi

an thoughts on emerging markets such as asia for investment in the future?

cheers

Shane

Nnejad said...

Hi Shane,

I may be misunderstanding this so please inform me if so, but I believe your asking about the ability to invest while also being an avid religious believer. Some would disregard such a mix, claiming that religion causes people to judge on faith rather than facts. But I would disagree, and I think Templeton is a perfect case in point. Templeton had the sense to know that investing required serious work, research and a reliance on facts, not just instinctive decisions. But he also understood that following the qualities preached by religion and avoiding those shunned by it would itself make him a better investor and a better person. For example, religion preaches hard work and frugality, and both must be an inherent part of a person's being to be a successful investor. Similarly, religion shuns fear and greed/envy, which are two qualities which usually get investors in trouble. (During the tech bubble, or during market over-reactions). So yes, I believe the two go very hand-in-hand.

As for investing in emerging markets, I don't have any real broad opinions, rather I'd say you have to look at individual ideas. If your worried about America in this current climate as I am, I would just say that I don't think the rest of the world is going to fare any better. These are interesting times, though.

Regards,
Nick