Published: 2023-12-17

Templeton's 22 Maxims

For all long-term investors, there is only one objective: to achieve the maximum after-tax real total return.
Achieving good performance requires a great deal of research and effort, and it is far harder than most people think.
You cannot achieve excellent performance without doing something different from the crowd.
The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.
To put No. 4 a little differently, the only way to get bargains in the stock market is to buy what most investors are selling.
To buy when others are discouraged and selling, and to sell when others are greedily buying, requires the greatest fortitude, even while the greatest rewards are being given.
Bear markets have always been temporary. Stock prices turn upward within 1 to 12 months after the business cycle bottoms out.
When a particular industry or a particular type of security begins to gain popularity among investors, that popularity will always be temporary, and once it fades, it will not recover for several years.
In the long run, the stock market index fluctuates around the long-term upward trend in earnings per share.
In free-enterprise countries, the performance of the stock market index fluctuates around the book value of the index.
If you buy the same securities as others, you will get the same results as others.
The time to buy stocks is when short-term holders stop selling, and the time to sell stocks is when short-term holders stop buying.
Stock prices fluctuate far more widely than value. Therefore, index funds will never produce the best total return.
Too many investors focus on “outlook” and “trends.” Therefore, more profit is gained by focusing on value.
If you broaden your research worldwide, you will find more and better bargains than if you limit yourself to one country. You will also enjoy the safety of diversification.
Stock price volatility is roughly proportional to the square root of the stock price.
The time to sell an asset is when you have found a much better bargain to replace it.
When any stock-selection method gains popularity, switch to an unpopular one. As stated in No. 3 above, any stock-selection method or market-timing method can be rendered useless if too many investors take part.
Never adopt any type of asset or selection method permanently. Strive to remain flexible, open-minded, and skeptical. In the long run, the best performance is achieved only by changing the preferred types of securities and selection methods from popular to unpopular.
In the common-stock portion of an investment portfolio, the technical factor of stock selection plays the greatest role.
The best performance is achieved by individuals, not by groups.
If you begin to pray, you can think more clearly and reduce foolish mistakes.

Topics: John Templeton,Stocks,Investment
Source: John Templeton
Category: Scrap/Quote

For all long-term investors, there is only one objective: to achieve the maximum after-tax real total return.

Achieving good performance requires a great deal of research and effort, and it is far harder than most people think.

You cannot achieve excellent performance without doing something different from the crowd.

The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.

To put No. 4 a little differently, the only way to get bargains in the stock market is to buy what most investors are selling.

To buy when others are discouraged and selling, and to sell when others are greedily buying, requires the greatest fortitude, even while the greatest rewards are being given.

Bear markets have always been temporary. Stock prices turn upward within 1 to 12 months after the business cycle bottoms out.

When a particular industry or a particular type of security begins to gain popularity among investors, that popularity will always be temporary, and once it fades, it will not recover for several years.

In the long run, the stock market index fluctuates around the long-term upward trend in earnings per share.

In free-enterprise countries, the performance of the stock market index fluctuates around the book value of the index.

If you buy the same securities as others, you will get the same results as others.

The time to buy stocks is when short-term holders stop selling, and the time to sell stocks is when short-term holders stop buying.

Stock prices fluctuate far more widely than value. Therefore, index funds will never produce the best total return.

Too many investors focus on “outlook” and “trends.” Therefore, more profit is gained by focusing on value.

If you broaden your research worldwide, you will find more and better bargains than if you limit yourself to one country. You will also enjoy the safety of diversification.

Stock price volatility is roughly proportional to the square root of the stock price.

The time to sell an asset is when you have found a much better bargain to replace it.

When any stock-selection method gains popularity, switch to an unpopular one. As stated in No. 3 above, any stock-selection method or market-timing method can be rendered useless if too many investors take part.

Never adopt any type of asset or selection method permanently. Strive to remain flexible, open-minded, and skeptical. In the long run, the best performance is achieved only by changing the preferred types of securities and selection methods from popular to unpopular.

In the common-stock portion of an investment portfolio, the technical factor of stock selection plays the greatest role.

The best performance is achieved by individuals, not by groups.

If you begin to pray, you can think more clearly and reduce foolish mistakes.