Congratulations of Claire from Oak Park High School in California for winning the Lesson 1 Contest: Stock Market Legends.
Claire wins a $50 Amazon Gift Card, a 6-Month Pass to Wall Street Survivor ($180 value), and an awesome YIS Polo!
Below is the winning entry:
Oak Park, California
Sir John Templeton: One of the Greatest Investors
John Templeton, one of the most successful investors, created his wealth “buying low and selling high.” Born in 1912, in Tennessee, he began the life of optimistic influence. During the Great Depression, Templeton helped establish an investment firm, Templeton, Dobbrow and Vance, that would reach $300 million in assets. In 1992, he became Sir John Templeton when Queen Elizabeth knighted him as a naturalized British citizen. At the end of his successful career, he retired and founded the John Templeton Foundation, a philanthropic organization that contributes to scientific and spiritual research. In 2008, at age 95, John Templeton died. The Wall Street Journal remarked, “…he always had confidence his picks would improve over the long term.”
1.Templeton was taught at Yale University, graduated nearly at the top of his class with a degree in Economics, and was the president of Phi Beta Kappa. At Oxford, where he graduated with a degree in law in 1936, he was a Rhodes Scholar.
2. Templeton picked his investments at their “point of maximum pessimism,” that is, at their lowest point of profit, including businesses who have declared bankruptcy. In 1939, the beginning of World War II, he borrowed $10,000 to buy 100 shares $1 or less each in 104 companies, 34 of which, had filed for bankruptcy. Only 4 were unsuccessful.
3. Looking for value investments, “bargain hunting” according to Templeton, he looked at investments on the global scale. He looked to other countries that had companies with a good business model and low prices. In 1999, Money magazine said he was, “arguably the greatest global stock picker of the century.”
4. Becoming a British citizen to avoid paying income taxes on his fortune, he moved into Lyford Cay, Bahamas, where Templeton met with businessmen from other countries of the world. He believed the best stocks were off the mainstream investor’s radar, and his new residency provided a wide array of opportunities for research. This environment was more effective than his previous on Wall Street which had people with insufficient information who shamelessly attempted to sell him their product.
5. In 2000, before the market crashed, Templeton sold his dotcom and Nasdaq stocks. He said, “to buy when others are despondently selling and to sell when others are greedily buying.” This philosophy made him one of the most incredible investors within the last century.
6. Templeton’s goal was to save 50% of his income in order to avoid debt. His modest upbringing taught him to save and work hard. He enacted this by putting in a 60 hour work week. This was the defining catalyst for his success.