Appendix
John Templeton’s Advice to Investors
In addition to letters to clients of his investment firm, John Templeton wrote many words of advice to investors, as well as being quoted regularly in books and newspaper articles about his views on the art of successful investment. In this section we reproduce his best-known and most pertinent observations. Perhaps his most famous piece of advice came in the form of a series of maxims, or aphorisms, which he used in a number of different places, and which he added to on several occasions as his fame spread. This is the longest and most definitive list of these maxims that we have been able to find. It can be usefully compared to the shorter version, based on an article that appeared in a now defunct publication, the Christian Science Monitor’s World Monitor, which we used as the basis for our comments in Chapter 4.
1. For all long-term investors, there is only one objective—“maximum total real return after taxes.”
2. Achieving a good record takes much study and work, and is a lot harder than most people think.
3. It is impossible to produce a superior performance unless you do something different from the majority.
4. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.
5. To put “Maxim 4” in somewhat different terms, in the stock market the only way to get a bargain is to buy what most investors are selling.
6. To buy when others are despondently selling and to sell when ...
