“Contrarian” Chronicles Life and Legacy of Sir John Templeton, CFA
Thanks to his extraordinary track record as an investor, the late John Templeton, CFA, ranks alongside Warren Buffett and George Soros as one of the most successful money managers of all time. Still, for many investment professionals today — particularly non-Americans like me — Templeton is less well known. When you learn about his improbable life story, though, you can’t help but wonder how someone born in the small town of Winchester, Tennessee, could go on to become a pioneer of global investing. A documentary, Contrarian, released last December, chronicles Templeton’s life and fleshes out his remarkable story.
Templeton was a bargain hunter. He invested in frontier and emerging markets at a time when others wouldn’t consider them. His investment philosophy was to buy shares without using debt “at the point of maximum pessimism.” Then he would wait patiently — his holding period, on average, was five years — before selling at a profit. When Templeton was once asked by a TV interviewer where the bargains are to be found, he replied: “Where people are selling. You never get a bargain unless most of the people are trying to sell.”
Such a strategy also requires selling or shorting when everyone else is buying. Above all, it means going against crowd, which Templeton did with remarkable consistency. According to the book Templeton’s Way with Money: Strategies and Philosophy of a Legendary Investor, his best-known mutual fund, the Templeton Growth Fund, “never once in 38 years under his guidance failed to deliver a positive real (inflation-adjusted) return over any 60-month period.” (My initial reaction: “You gotta be kidding me!”)
Templeton wasn’t just a contrarian, he was also a determined and disciplined professional. In the film, family members note that he was “all concentration” and “work, work, work.” As a student, he earned straight A’s, which led to scholarships at Yale and Oxford, where he partly financed his education and early travels through poker winnings.
Unlike many wealthy young money managers today, Templeton’s personal fortune didn’t really take off until he was in his 50s, when inflows into the Templeton Growth Funds accelerated. But as he famously said, “I’m no wiser than I was 20 years ago, just better known.”
Templeton was always a religious man, but he became much more interested in spiritual matters in his later years. The question, “Why are we here?” was of particular interest to him, and he worked to encourage a dialogue between scientists and theologians to further our understanding.
In 1972 he established the Templeton Prize to identify “entrepreneurs of the spirit” who make “an exceptional contribution to affirming life’s spiritual dimension.” Today the Prize confers GBP1.1 million and is (as it was meant to be) more financially rewarding than the Nobel Prize. Templeton spent vast sums on his philanthropy, which, among other things, financed Templeton College at University of Oxford. He died in 2008 at age 95.
The documentary is not without its weaknesses. Because it is sponsored by the John Templeton Foundation, it is less likely to be seen as an independent account. It relies heavily, perhaps too heavily, on interviews with family members and shies away from any criticism of Templeton. With his proud legacy of integrity as an investment professional, Templeton is not easy to criticize. But no man is perfect and including the views of his critics would probably have made the documentary better for the viewers. In addition, those seeking investment wisdom are likely to come away feeling that the film gives short shrift to his career as a money manager. There are some interesting clips of Templeton himself — but they don’t appear until nearly 45 minutes into the film. And the documentary seems to have overlooked some of Templeton’s most pithy and deeply insightful comments, including this one from a television interview in which he appeared alongside legendary investor Peter Lynch:
“The main thing that people need to learn is that selecting assets is totally different from almost every other activity. If you go to 10 doctors and they tell you the same medicine, that’s the thing to take. . . . But if you go to ten investment advisors and they pick the same asset, you better stay away from it.”
Despite its shortcomings, Contrarian provides an insightful account of the life and legacy of John Templeton — all within an hour and totally free of charge (no commercials either!). Templeton himself would call that a bargain.
For more reviews of finance-related films, read “Top 20 Films about Finance: From Crisis to Con Men.”
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
Photo credit: ©2012 50 Eggs.