📖John Templeton
Diversify Globally
Diversify across nations and industries.
The only investors who shouldn't diversify are those who are right 100% of the time. Diversify across nations and across industries.
🏠 Everyday Analogy
📖 Core Interpretation
John Templeton sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Global diversification reduces risk and finds opportunity.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
Buying at Outbreak of WWII (1939)
Templeton borrowed money to buy 100 shares each of 104 depressed U.S. stocks under $1 as war began in Europe, based on research that pessimism was extreme and many firms were still fundamentally viable.
✨ Outcome：Within a few years most positions recovered or prospered, turning a small, risky purchase basket into a strong multi‑bagger and forming the basis of his contrarian, research‑driven reputation.
2
Early Investment in Post‑War Japan (1954)
Through on‑the‑ground research and analysis of balance sheets, Templeton invested in neglected Japanese companies during the 1950s, when the country was still rebuilding and foreign capital was scarce and skeptical.
✨ Outcome：As Japan industrialized and exports boomed, these unloved stocks multiplied in value, helping Templeton’s funds significantly outperform global benchmarks over the following decades.
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