An investment strategy from the greatest

As usual I was browsing the internet over the weekend looking for good readings and came across this old article about one of the greatest investor - John Templeton. As a value-contrarian investor, he was always on the constant look out for bargains to buy domestically in the US and as well globally in the emerging markets and Asia (which he was the first to invest in during his time). This legendary investor has left behind many of his investing values and philosophy, one of which is the '16 rules for investment success', which you can view from the Franklintempleton website.

Let us take a look at these 16 rules from this great man:

1. Invest for maximum total real return
2. Invest - Don't trade or speculate
3. Remain flexible and open-minded about types of investment
4. Buy low
5. When buying stocks, search for bargains among quality stocks
6. Buy value, not market trends or the economic outlook
7. Diversify, in stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don't panic
11. Learn from your mistakes
12. Begin with a prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn't even understand all the questions
15. There's no free lunch
16. Do not be fearful or negative too often

There are also couple of videos found on internet which I thought they are pretty useful:

• John Templeton Canadian interview
• After Wall Street crash, Oct 1987 (if only all of us seen this video before Lehmen crash, but it's ok, the next one will come again)

And to summarise what this great man has taught us as quoted in the videos:

• we never know when the market will change, each day we buy them(stocks) in depressed price and most of them recovers
• We have to hold things patiently, average holding of 5 years
• It's human nature, even professional, will wait to buy until the outlook is good, but you will never find bargain

Here is the one sentence that sums it all;

The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell - Sir John Templeton.

Dear readers, do you know which industry, market or sector is at it's pessimism now, please share. In my next post, I will share my thoughts as well.

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