International Investing And Sir John Templeton
Sir John Templeton is a famous name in the world of investing. He made a career by advising investors to go against their instincts when making investment decisions and go where others were least likely to invest. Templeton passed away in 2009 at the age of 95 but just like Warren Buffet, he was a value investor. In a recent article on Forbes.com titled, “International Investing: What would Templeton do", Zack O’Malley Greenberg discussed where would have Templeton looked today when making his investing decisions if he were alive today.
Templeton is famous for investing $100 in 1939 on every stock trading for less than $1 on the New York and the other American Stock Exchanges. His strategy paid off when his investment of $10,400 had quadrupled in value by 1943. Like Warren Buffet, Templeton was a disciple of Benjamin Graham who advocated value investing in his famous book, ‘The Intelligent Investor.”
Templeton would advise investors to invest at the point of maximum pessimism. Just like Warren Buffet according to Zach in his article, Templeton would have been salivating when taking a look at today’s bargain markets. Gary Motyl, Chief Investment Officer of Templeton Global Equity Group says that Templeton if alive today would be looking towards the European stocks that have been decimated by the recent debt crisis.
For example, German outfit Aixtron, a semiconductor equipment provider boosts a 32% operating margin and 5% annual dividend but it is trading at just eight times trailing earnings. Aixtron is one of three foreign companies among the 20 on AAII's list. According to Motyl, Templeton’s favorite word was diversification. He used to diversify across different industries, countries and currencies. So as long as there was good valuation supporting it, Templeton would go for diversification.Continued on the next page