📖John Templeton
Market Cycles Wisdom
Understand which stage of the market cycle you're in.
Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. Know where you are in the cycle.
🏠 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：Market cycles follow predictable emotional patterns.
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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
Postwar Japan Recovery (1949)
Templeton bought deeply depressed Japanese stocks amid post-WWII devastation, when many investors avoided the market due to political and economic uncertainty.
✨ Outcome：Massive multi-decade gains as Japan industrialized and export growth surged, validating global value investing beyond the U.S.
2
Early Investment in South Korea (1962)
Templeton invested in obscure South Korean companies when the country was poor, politically unstable, and largely ignored by foreign investors.
✨ Outcome：Substantial returns as South Korea transformed into an export-driven Asian tiger, reinforcing his case for broad global diversification.
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