The Templeton Touch

Proctor wrote this authorised account of John Templeton's investment approach in 1983, drawing on interviews with Templeton and with people who worked with him, and it covers his career from the 1930s through the Templeton Growth Fund's long record.

Templeton's approach was global value investing before either term was common. He bought securities in markets other investors were not examining, on the reasoning that if you search where nobody else is searching you will find better prices, and he was among the first American managers to buy Japanese equities in the 1950s and 1960s when they traded at very low multiples. His stated method was to buy at what he called the point of maximum pessimism, to hold for an average of four or five years, and to sell when he found something better rather than when a target was reached. He worked from a bargain list maintained continuously, so that when prices fell he had already decided what to buy.

The book also covers Templeton's religious convictions, which he treated as connected to his investing through an insistence on humility about one's own judgement, and his later philanthropy.

The reference has not verified all of the specific performance figures and anecdotes, which come from an authorised account written while Templeton was actively managing money. The book is admiring and does not examine the periods when the approach underperformed. Its value is the statement of the search-where-others-do-not principle and the maximum pessimism discipline, both of which Templeton practised consistently over a very long record.