Content Provided by Rusty Vanneman, CFA, CMT – Chief Investment Officer
One of the most important days in my development as an investment manager occurred in the spring of 1987. It was during my undergraduate days at Babson College. It was Founder’s Day, which is Babson’s oldest tradition, a day established to recognize the school’s founder, Roger W. Babson. On Founder’s Day each year, Babson College honors a few entrepreneurs who, in turn, address the student body. On that day in 1987, I had an opportunity to hear Sir John Templeton speak.
Recognized at the time as one of the great investment managers of the modern era (later, in 1999, he was recognized by Money Magazine as the greatest global stock picker of the century), Sir John Templeton (1912-2008) was mesmerizing. Even though the day’s schedule was organized in such a way that students could see all three entrepreneurs speak in break-out sessions, I spent all three of my break-out sessions in Templeton’s room. His impact on me was profound. He fortified my passion to be a money manager and financial counselor.
What are some of the attributes that Templeton was known for?
- Balance: His professional and personal lives were very important to him, and he put considerable work into both.
- Humility: “How little we know, how eager to learn,” captured his personal philosophy and his approach to the financial markets.
- Global: He was one of the first prominent global investors, extending his investment universe beyond the U.S. market.
- Diversification: Templeton was a strong proponent of diversified portfolios. This was related to his humble approach.
- Patience: He would often hold onto positions for years to realize their value.
- Contrarian: Templeton didn’t just buy low and sell high, he looked for extreme sentiment/valuation — picking nations, industries, and companies by identifying “points of maximum pessimism.”
- Progressive: Templeton was an early and enthusiastic investor in many technology-oriented investments. He was also known for adapting his investing style depending on the environment. This was also related to his humble approach.
- Counselor: Templeton wanted to help people. That was a constant during his career and life.
Sir John Templeton was also known for producing and publishing a fair amount of “wisdom literature” and is known for many notable quotes, including:
- “If you want to have a better performance than the crowd, you must do things differently from the crowd.”
- “Invest at the point of maximum pessimism.”
- “The four most dangerous words in investing are ‘This time it’s different.’”
- “If we become increasingly humble about how little we know, we may be more eager to search.”
- “Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria.”
- “People are always asking me where the outlook is good, but that’s the wrong question. The right question is: Where is the outlook most miserable?”
- “I am approaching my ninety-fifth birthday and believe that there has never been a better time to be alive. We should be deeply grateful to have been born in this age of unbelievable prosperity.”
Last and surely not least given this is perhaps his most prominent legacy, Sir John Templeton was also known for the Templeton Prize, which he established in 1972. The award’s purpose, as noted on its website, is to “honor a living person who has made an exceptional contribution to affirming life’s spiritual dimension, whether through insight, discovery, or practical works. . . The Prize aims, in his words, to identify ‘entrepreneurs of the spirit’ — outstanding individuals who have devoted their talents to expanding our vision of human purpose and ultimate reality. The Prize celebrates no particular faith tradition or notion of God, but rather the quest for progress in humanity’s efforts to comprehend the many and diverse manifestations of the Divine.” It should be noted that the Templeton Prize is even larger than the Nobel Prizes, at least in terms of the financial reward to the winner.
Sir John Templeton lived an important life, positively impacting many people’s lives, both in terms of how they think and how they behave both personally and professionally. Though he has been gone for nearly a decade now, his legacy lives on in a variety of ways, including the programs, organizations and honors that he established and through his influence on many, including myself. I am thankful for that influence, as I am thankful for that day back at Babson College in the 1980s.