Little Known Story of a Penny Stock Billionaire
Sir John Templeton was born in 1914 into a poor family in Tennessee. He got a scholarship to Yale University and graduated in 1934 top of his class with a degree in economics. In 1936 he obtained a master of arts in law in Oxford University, England. He returned to the United States to work in New York at a brokerage firm Fenner & Beane, which later merged with another company to become Merril Lynch.
In 1939 John Templeton got a loan of $10,000 and bought 100 shares of every company under $1 share a share on the NYSE and American Stock Exchange. He ended up owning 100 shares of 104 companies.Within four years he had quadrupled his money from $10,400 to $40,000, despite 34 of the companies going bankrupt. This proves how small caps can outperform mid cap and blue cap stocks.
During the Great Depression he co-founded an investment firm Templeton, Dobbrow & Vance. The firm was successful and grew to $300 million in assets with eight mutual funds under management. Templton also started the Templeton Growth Fund in 1954, based in the Bahamas (tax haven) and was one of the first few who invested in Japan in the middle of the 1960’s. Back then if you invested $100,000 into his fund it would have been worth a staggering $55 million by 1999. He fund had an impressive annual return of 12.2%.Later on sold his stake in the Templeton, Dobbrow & Vance firm in 1962.
Over the next 25 years, Templeton created some of the most successful international investment funds. In 1999 Money Magazine named him one of the greatest stock pickers of all time. He was knighted by Queen Elizabeth John and in 2007 he was name in the Top 100 most Influential people. John Templeton retired a billionaire and lived on the sunny island of the Bahamas. During his retirement he setup his own foundation the “John Templeton Foundation”, which gave significant donations to scientific and spiritual research.
Templeton’s investment style was known as “bargain hunting”, buying stocks at bargain prices when nobody was interested. He searched for undervalued companies at cheap prices with good long term potential. He was a contarian value investor, buying shares that were neglected and learned it was better to not follow the crowd. He was greedy when other were fearful, and fearful when other were greedy. During the Great Depression he bought low and sold high before the collapse of the Internet boom.
- Don’t trade or speculate, Invest.
- Buy low, sell high.
- Add a stock you like to your watch list and monitor it’s progress.
- Learn from your mistakes or you will repeat them again.
- There’s no such thing as a free lunch.
- Diversify your investments.
- Don’t follow the herd.
- Do your own research or hire someone else with the expertise to help you.