My dear Friends,

In times like these, with so much uncertainty, we are frequently at a loss and either overreact or do not act at all. Believe me, I know the feeling, and just like you, I do worry about my financial future.

There seems to be an endless question loop: Do my decisions still make sense? Is my financial future in peril? Will my portfolio have resilience during a recession? To be honest, at the moment, I find the reality so complicated that I wish to hand over decision-making for my personal finances to a crystal ball.

But, the experience taught me giving up control over my personal finances is by far the worst of all ideas! So, I decided to dig a little deeper. Maybe there is someone or something to help me stabilize my portfolio during destabilized times. Frankly, anything is more reassuring than indulging in doom and gloom!

Success! I found the Templeton Maximes, and I was truly impressed. Plenty of common sense and convincingly straightforward rules which have stood the test of time and are still of value to investors.

My first impulse, I had to let you know immediately -the Templeton Maximes.

Introducing Sir John Templeton (1912-2008)

Templeton is remembered as a pioneer in both financial investment and philanthropy. He was driven by his profound respect for learning and a higher purpose beyond profit for profit’s sake. He is probably the world´s first value investor.

John Marks Templeton was born on November 29, 1912, in the small town of Winchester, Tennessee. He attended Yale University, graduating in 1934 near the top of his class. He was later a Rhodes Scholar at Balliol College at Oxford, from which he graduated with a degree in law in 1936.

Beyond Profit

He started his Wall Street career in 1938 and created some of the world’s largest and most successful international investment funds. He took the strategy of “buy low, sell high” to an extreme, picking nations, industries, and companies hitting rock bottom. When the war began in Europe in 1939, he borrowed money to buy 100 shares each in 104 companies selling at one dollar per share or less, including 34 companies that were in bankruptcy. Only four were worthless, and he turned large profits on the others.

Templeton entered the mutual fund industry in 1954, establishing the Templeton Growth Fund. With dividends reinvested, each $10,000 invested in the Templeton Growth Fund Class A at its inception would have grown to $2 million by 1992, when he sold the family of Templeton Funds to the Franklin Group. 

“…..one of the most successful money managers in history”.

Forbes Magazine

Maximum Optimist

He was an unfailing optimist and a believer in progress. Famous for being a relentless questioner and contrarian, he devoted the second half of his long life to promoting the discovery of what he called “new spiritual information. Templeton was convinced that our knowledge of the universe was still very limited. His great hope was to encourage all of humanity to be more open-minded about the possible character of ultimate reality and the divine.

In 1972, he established the world’s most significant annual award given to an individual, the Templeton Prize. It honours individuals whose achievements use the power of the sciences to explore the most profound questions of the universe and humankind’s place and purpose within it.

He strongly believed that advances in the spiritual domain are no less significant than those in other areas of human endeavour. In 1987, he was created a Knight Bachelor by Queen Elizabeth II.

Cattle Auctions

The most famous of Templeton’s contrarian actions happened in 1939- on the eve of WWII. He judged the market was in headless chicken mode due to fears about the upcoming conflict. He wasn’t sure which shares would prosper. But he was convinced they were all trading out of whack.

Long before behavioural economy became a science, he had learned to read the emotional moods of markets by visiting cattle auctions during the Depression Era with a bargain-hungry older uncle.

The profits he banked when the markets recovered initiated a lifetime of running money.

Fast-forwarding 60 years, Templeton was actively shorting the Dotcom Bubble(1995-2001). In his 80s! To be actively betting against your grandkids’ smartest peers on Wall Street by shorting the most popular stocks – and winning – is quite something!

The Templeton Maximes

1. Invest for real return

The true objective for any long-term investor is maximum total real return after taxes

2. Keep an open mind

Never permanently adopt any type of asset or any selection method

Stay flexible, open-minded and sceptical. Long-term top results are achieved only by changing from popular to unpopular the types of securities you favour and your methods of selection.

3. Never follow the crowd

If you buy the same securities as other people, you will have the same results as other people

It is impossible to produce a superior performance unless you do something different from the majority. 

4. Everything changes

Bear markets have always been temporary. And so have bull markets

Share prices usually turn upward from one to twelve months before the bottom of the business cycle and vice versa

5. Avoid the popular

When any method for selecting stocks becomes popular, then switch to unpopular methods

Too many investors can spoil any share selection method or any market timing formula

6. Learn from mistakes

This time is different are among the most costly four words in market history

7. Buy during time of pessimism

Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria

The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell

8. Hunt for value and bargains

Too many investors focus on outlook and trend. Therefore, more profit is made by focusing on value

In the stock market, the only way to get a bargain is to buy what most investors are selling.

9. Search worldwide

To avoid having all your eggs in the wrong basket at the wrong time, every investor should diversify

If you search worldwide, you will find more bargains and better bargains than by studying only one nation. You also gain the safety of diversification.

10. No one knows everything

An investor who has all the answers doesn’t even understand the questions

11. Time To sell

The time to sell an asset is when you have found a much better bargain to replace it

12. Performance

The best performance is produced by a person, not a committee

Condensed

First of all, I like to remind you there is always light at the end of the tunnel – whatever the problem or however gloomy the situation seems to be.

The Templeton funds still follow Sir John Templeton´s investment principles. For 84 years,, his maxims have stood the test of time and are of enduring value to investors. This should tell us something! I think this is a good enough reason for us to adapt some of Sir John Templeton’s no-nonsense rules when making choices for our personal wealth.

You are very welcome to join us !