John Marks Templeton is a gentleman’s gentleman. The son of a self-taught Tennessee country lawyer and cotton ginner, Templeton has become one of the premier money managers of our time. He is a soft spoken, almost condescending man who never utters an ill word of anyone and is the epitome of someone who tries to inflict no pain on anyone. He is also a highly religious person and is one of the major grantor’s of religious awards in the world. Each year, he bestows a religious award; the Templeton Foundation Prize for Progress in Religion, to the person in the world who he thinks has done the most outstanding job. Commencing in 1972, this award has been accompanied by a monetary sum in excess of the amount of the Nobel Peace Prize.
John Templeton is best known as Principal and Founder of the Templeton Mutual Funds, and is also Chairman of an investment management company which, along with its subsidiaries, manages assets in excess of $18 billion.John Templeton has the same kind of patience and insight as Price but utilizes an entirely different strategy to investing money. Early on, he observed that there were economic booms and recessions throughout the world and that they occurred at different times and in different parts of the world. Therefore, he decided that the proper investment strategy should be global. At the time, almost 40 years ago, this kind of thinking demonstrated a great deal of prescience.
Templeton also decided that the right thing to do was to play the economic cycles in various parts of the world. If he found one area of the world in an economic decline, he would invest his money there until there was a recovery. He shifted funds to wherever a decline had already occurred, instead of to where economies were strong. The result is that Templeton has consistently outperformed the best money managers in the business, over a staggering period of time. Although the research capability behind him may not be the best in the selection of individual securities, it is extremely good on long-term timing of economic cycles throughout the world, and I admire him tremendously for his foresight. As an example, he recognized the Japanese market long before others did; he heavily invested in it, and then pulled much of his money from Japan before that market turned downward in the early 1990s.
He is never completely out of any part of the world, but he does shift his money on a worldwide basis. Recently, I remember asking him where he thought the next major breakthrough might be, and he remarked that China would be his best guess, if and when it became available for investment. Indeed, from a fundamental economic point of view, China has more than any nation in the world. It certainly has a labor force which it could employ if it saw fit. Coupled with this are ample natural resources, a good educational system, and superior institutional facilities, although they are relatively small based on the population. Here is where one could envision a major breakthrough. When China solves its political problems, it will certainly emerge as a formidable economic powerhouse.