📖John Templeton

Global Stock Selection

🌿 Intermediate★★★★☆

Search globally for low P/E with high growth. Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong. Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside. In Global Stock Selection, John Templeton focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves. Key insight: Global stock selection multiplies opportunities.

Avoid misuse: Confusing a low price with true cheapness

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To get the best returns, search for companies worldwide with the lowest price-to-earnings ratios and the best growth prospects.

— Templeton's Way with Money，2012

🏠 Everyday Analogy

Valuation is like buying a house: the asking price reflects mood, but true value comes from structure, location, and long-term utility. Good assets still need sensible prices.

📖 Core Interpretation

In Global Stock Selection, John Templeton focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Global stock selection multiplies opportunities.

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❓ Why It Matters

Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.

🎯 How to Practice

Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.

⚠️ Common Pitfalls

✕Confusing a low price with true cheapness
✕Using one metric without business context
✕Overly optimistic assumptions that erase margin of safety

📚 Case Studies

1
Investing in Postwar Japan (1954)
While most U.S. investors avoided Japan after WWII, Templeton bought undervalued Japanese equities amid reconstruction and negative sentiment toward the country.
✨ Outcome：Japanese stocks soared over subsequent decades, delivering outsized returns and validating his thesis of going where the crowd is absent.
2
Dot-Com Bubble Caution (1999)
Templeton warned that tech stocks were overpriced and avoided the mania, buying out-of-favor value stocks instead of chasing momentum.
✨ Outcome：He underperformed briefly during the bubble, but preserved capital and outperformed after the 2000–2002 crash.

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