Key points

●Templeton is the founder of the Templeton Group and is regarded as the most intelligent and respected investment guru in the world.

●Templeton insists on reverse investment, believing that the market is always born in despair.

●Templeton left the world with a "sixteen rules for investment success", emphasizing that investment must maintain a positive attitude and dare to buy in a bear market.

"the bull market is born in pessimism, grows in doubt, matures in optimism, and dies in excitement."

This familiar investment quote comes from Sir John Templeton, a famous investment guru.

John Templeton, the founder of the Templeton Group, has long been regarded as one of the smartest and most respected investors in the world. In 1987, Queen Elizabeth II awarded the knighthood to Templeton.

In 1999, Money magazine called Templeton "the greatest stock picker in the world in the 20th century."

Templeton's investment philosophy and investment style

Templeton's investment philosophy can be summed up in one word, "reverse investment".

Throughout his investment career, Templeton spent most of his time patiently waiting for opportunities. The market is always born in despair, grows in skepticism, matures in longing, and destroys in hope.

Templeton believes that if you have reverse thinking, then the world will be full of gold.

Based on this philosophy, Templeton's investment approach is summed up as: "buy at the lows of the Great Depression, sell at the highs of the Internet, and do well between the two."

His investment style can be summed up as follows: looking for those value investments, looking for low-cost companies with good long-term prospects around the world as investment targets.

Sixteen rules of investment success

Sir Templeton has written publicly, summarizing his successful investment experience into 16 items, called "16 RULES FOR INVESTMENT SUCCESS".

NO. 1 INVEST FOR MAXIMUM TOTAL REAL RETURN

Templeton believes that investors need to pay attention to the erosion of investment income by taxes and inflation and avoid investing too much in fixed income categories.

NO. 2 INVEST—DON’T TRADE OR SPECULATE

John Berg, the father of index funds, once said, get out of the casino, buy stocks and hold them for the rest of your life. Mr Templeton also made it clear that excessive trading and even short-term speculation can erode potential profits and eventually lead to sustained losses.

NO. 3 REMAIN FLEXIBLE AND OPEN-MINDED ABOUT TYPES OF INVESTMENT

No investment works best all the time, whether it's stocks, bonds or futures. Templeton believes that investment should be open-minded and maintain a flexible and open attitude towards the type of investment. Of course, the S & P 500 outperformed other categories most of the time.

NO. 4 BUY LOW

Everyone understands the strategy of buying stocks at low prices, but people tend to buy only when the stock price rises. Templeton believes that the opportunity to buy low usually occurs only when people are pessimistic about market performance. "Don't follow the crowd."

NO. 5 WHEN BUYING STOCKS, SEARCH FOR BARGAINS AMONG QUALITY STOCKS

Templeton stressed that the texture of the company is an important factor in judging whether a company is worth buying. High-quality companies often have a technologically leading market position, a strong management team to ensure performance growth, and trustworthy corporate brands.

NO. 6 BUY VALUE, NOT MARKET TRENDS OR THE ECONOMIC

OUTLOOK

Templeton stressed that the core of stock speculation is individual stock trading, a strong bull market may briefly boost the individual stock market, but ultimately determine the performance of individual stocks is their own value factors, even in the bear market there are rising stocks.

NO. 7 DIVERSIFY. IN STOCKS AND BONDS, AS IN MUCH ELSE,

THERE IS SAFETY IN NUMBERS

Templeton believes that unpredictable unexpected factors can affect investment, such as hurricanes, earthquakes and even unexpected technological innovations. Therefore, investment diversification is very necessary, and search around the world, may find more quality and cheap targets.

NO. 8 DO YOUR HOMEWORK OR HIRE WISE EXPERTS TO HELP YOU

Templeton stressed that you need to make adequate preparations before investing and be aware of what you are buying. As far as stock investment is concerned, it is either the pursuit of income or the pursuit of assets. Expect a company to continue to grow, stock valuations will rise, this is the return on investment; expect a company to be acquired at a premium above valuation, this is the investment asset.

NO. 9 AGGRESSIVELY MONITOR YOUR INVESTMENTS

Templeton said that the market is in an ever-changing state, to actively track the investment target information, no stock is bought can be forgotten.

NO. 10 DON’T PANIC

The best time to sell stocks is before the crash, not after the crash. Templeton stressed that do not panic because of the panic of the people around you. If you can't find a better stock, take the stock you have.

NO. 11 LEARN FROM YOUR MISTAKES

Learning from mistakes is the best way to learn. Templeton believes that making mistakes is not terrible, but turn each mistake into a learning experience and avoid making the same mistake again. "this time is different" is the four most expensive words in an investment. The biggest difference between winners and losers is whether they learn from their own mistakes and those of others.

NO. 12 BEGIN WITH A PRAYER

Templeton believes that some prayers before investing can help investors keep a clear mind and reduce misinvestments.

NO. 13 OUTPERFORMING THE MARKET IS A DIFFICULT TASK

It's not easy to beat the market, and don't even underestimate those index funds, because they can't invest all their money, and there are management fees, transaction fees and other expenses. As a result, the investment companies that continue to outperform the market are actually much better than they thought.

NO. 14 AN INVESTOR WHO HAS ALL THE ANSWERS DOESN’T EVEN UNDERSTAND ALL THE QUESTIONS

No one can know the answers to all the questions. Templeton believes that investment needs to guard against arrogance and rashness, smart investors will continue to learn new knowledge and accumulate new experience throughout their lives.

NO. 15 THERE’S NO FREE LUNCH

Templeton warns investors to stay away from personal emotions, such as the company where they first worked, the manufacturer of their first car, and so on, which will not add to their investment returns. In addition, many times the market gossip is also "poison", some seem to be "cheap" will actually suffer a great loss. In short, don't think about making fast money, there is no such thing as a free lunch.

NO. 16 DO NOT BE FEARFUL OR NEGATIVE TOO OFTEN

Templeton believes that no matter what the market environment, investors should maintain a positive attitude, not too panic and negative. Globalization is good for the stock market, and research shows that the stock market will rise forever.

Master quotation

The bull market is born in pessimism, grows in doubt, matures in optimism, and ends in excitement.

The most pessimistic time is the best time to buy, and the most optimistic time is the best time to sell.

For those who are well prepared, a bear market is not a disaster, but an opportunity.

Surpassing most investors needs to do what they don't.

It takes perseverance to buy when others are desperate and sell when others are hopeful.

Sell the stock only if you find a new stock that is 50% cheaper than the stock you own.

The four most expensive words in English are "this time is different".

Focus on value, because most investors focus on prospects and trends.

If you want to perform better than others, you must do something different from others.

Never forget that the secret to creating wealth for yourself is to create wealth for others.

What happens to us in life doesn't matter. The real question may be whether we use experience to grow.

When we don't have a goal, or when we have a vague view of it, we may lose our sense of purpose.

Even if we are well prepared and capable of an activity, poorly guided efforts can deprive us of our life energy.

Summary

Sir Templeton's concept of reverse investment has a profound impact on global capital markets.

When Templeton died, the Wall Street Journal even named his obituary "the greatest optimist" in memory of the optimistic investment guru.

So, when the market is hot, we don'tThere might as well be more caution; when bear market sentiment spreads, there might as well be more hope.