Weekend: The 10 Maxims of Successful Investing By Steve Christ | Saturday, June 25th, 2011 Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
For Sir John Marks Templeton, the road not taken really did make all the difference in the world. Contrarian to the core, the legendary investor literally became a billionaire by "avoiding the herd". He bought low and sold high, always working against the grains of extreme bullish and bearish sentiment on Wall Street. He pursued those strategies by buying up companies, and even nations, when the streets were the bloodiest, snapping up rock bottom bargains along the way. It was at these moments of what he called "points of maximum pessimism" that Templeton began to stir. True to form, as the herd made the bum's rush for the exits, Templeton began to wade in. Going Long on Pessimism To his credit, that included one of his most daring plays. As the U.S. was still mired in The Great Depression and the war drums in Europe began to beat, Templeton borrowed enough money to dive into the U.S. markets back in the dark days of 1939. With a war chest of $10,000, Templeton bought 100 shares in every single company that was trading for less than a dollar a share on the New York Stock Exchange. That bought him shares in 104 companies, including 34 that were already in bankruptcy. In the end though, only four of them turned out to be worthless, while Templeton's intial investment grew to $40,000 in over just a four year period. That was essentially the start of long and successful career spent wrestling both the bulls and the bears. Not long after, he became a billionaire by pioneering the use of globally diversified mutual funds. Established in 1954, his Templeton Growth Fund grew at an astonishing rate of nearly 16% a year until Templeton’s retirement in 1992, handily beating the Standard & Poor's gains of 11.1%. With dividends reinvested, each $10,000 invested in the Templeton Growth Fund at its inception would have grown to $2 million by 1992, before it was sold to the Franklin Group. Advertisement 60 Minutes Reports on Growing Body Parts Call it what you want: biotechnology, tissue engineering, cell therapy, regenerative medicine. The famous newsmagazine has reported on one doctor about to make multiple medical problems disappear forever. Lucky for you, that same doctor sits on the board of a $3.00 company that will bring these solutions to market — making shareholders rich in the process. Check out the 60 Minutes clip to learn the name. A fundamentalist by nature, Templeton's overall investment thesis was pretty simple: it was to "search for companies around the world that offered low prices and an excellent long-term outlook." More often than not, that included areas of the world other investors had completely overlooked, most notably post-war Japan. Templeton was not only one of the first investors to place bets there, he was also one of the first investors to sell out as the Japanese bubble peaked in the mid-1980's. Likewise, his timing couldn't have been better in the late 1990's. At the height of the Internet bubble Templeton predicted 90% of the new Internet companies would be bankrupt within five years. Confident in that prediction, he went short dozens of technology companies, making himself over $80 million in a matter of weeks. He later called it "the easiest money I ever made." As a result of such a long and profitable career, Money magazine dubbed him "arguably the greatest global stock picker of the century” in 1999. One of the great philanthropists of all time, he also left behind a wealth of investment advice for stock pickers at every level. Templeton's 10 Maxims He called them Templeton's 10 Principles for Successful Investing. They included the following:
Of course, those aren't the only words of wisdom Templeton had to offer. He also once said, "It's nice to be important, but it is more important to be nice." Templeton passed away in July 2008 at the age of 95. As for some places to start building a lifetime of wealth, our editors have put together a few of their best ideas for the years to come in this week's top-read articles from Wealth Daily and Energy & Capital, below. Have a great weekend. Your bargain-hunting analyst, Steve Christ
The June Swoon: How to Survive the Next Crash The Biotech Sector: The Biggest Thing Since the Internet NFL Lockout Stocks: Get Your Piece of the NFL's Billions... Mongolia Hates Good News: One More Ten-Bagger in UlaanBaatar A Solar Energy Overview: Forecasts, Trends, and Companies Stealing OPEC Profits: How They're Taking a Piece OPEC's Trillion Dollar Pie The Next Big Crash: How Human Behavior Will Govern the Coming Downturn Forget the Feds: Everybody's Got Problems, Here are the Solutions Ethanol Subsidies: The Great Ethanol Scam of 2011 Revolutionary Profits: A Look at the New Frontier in Medicine |
Wealth Daily Blogs
Economic Releases for the week of Monday, June 27th, 2011: Jun 27 - Personal Income and Spending Jun 28 - Case-Shiller 20-city Index Jun 29 - Pending Home Sales Jun 30 - Chicago PMI Jul 01 - Construction Spending Jul 02 - Auto and Truck Sales Jun 28 - Consumer Confidence Jul 01 - Nonfarm Private Payrolls Jul 01 - Michigan Sentiment Jul 01 - ISM Index Jun 29 - MBA Mortgage Index You May Also Enjoy...The Next Bull Market2011-06-23 - Steve Christ Get Your Piece of the NFL's Billions... 2011-06-22 - Ian Cooper Human Behavior Governs Exactly When the Coming Downturn Happens 2011-06-21 - Adam Lass Everybody's Got Problems, Profit from the Solutions 2011-06-20 - Christian A. DeHaemer Wealth Daily's Weekend Edition 2011-06-19 - Steve Christ |
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Saturday, June 25, 2011
Weekend: The 10 Maxims of Successful Investing
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