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John Templeton on his investment methods.
Buy at the point of maximum pessimism.
Buy whatever is cheapest, globally. Usually unpopular.
Invest tax-efficiently.
Be patient.
Buy at the point of maximum pessimism.
Buy whatever is cheapest, globally. Usually unpopular.
Invest tax-efficiently.
Be patient.
It is a big mistake to buy company with best prospects. This is often reflected in the market price, and then some.
Beware inflation.
Modern attitudes will dictate inflation. Consumer prices will never fall. Cost of living will double every 9 years. (8% inflation rate.)
Beware inflation.
Modern attitudes will dictate inflation. Consumer prices will never fall. Cost of living will double every 9 years. (8% inflation rate.)
Assets which protect from inflation. Stocks or real estate. (Gold?)
Not bonds. Not credit instruments. But keep one year of expenses in cash.
Stocks are best because some are always cheap.
Not bonds. Not credit instruments. But keep one year of expenses in cash.
Stocks are best because some are always cheap.
Markets are competitive. What works today will not work tomorrow, because many clever financial analysts will discover it. Always change a winning game.
He worked 60 hours/week. Sometimes 80.
Valuing businesses is hardest; few do it, so it's most rewarding.
He worked 60 hours/week. Sometimes 80.
Valuing businesses is hardest; few do it, so it's most rewarding.
How to estimate the value of a hotel?
Study:
What do similar hotels sell for?
How many rooms?
Cost to rebuild?
Rates?
Trends?
Management?
Spend time and ask experts. Not an easy matter.
Therein lies the edge of doing fundamental valuation.
Study:
What do similar hotels sell for?
How many rooms?
Cost to rebuild?
Rates?
Trends?
Management?
Spend time and ask experts. Not an easy matter.
Therein lies the edge of doing fundamental valuation.
Precision is impossible. Find assets trading at the lowest price in relation to value. This could be 1/4 of true value. Sometimes they're growth stocks, sometimes mature businesses. Value migrates internationally.
Use common sense.
Buy the best value and wait.
Use common sense.
Buy the best value and wait.
When to sell?
Sell when you find a better bargain. Must be 2x better, i.e, half the valuation. Otherwise they're too often wrong. Even then, the trade underperforms over subsequent year 1/3 of the time.
4 year average hold. Often longer. Patience is key.
Sell when you find a better bargain. Must be 2x better, i.e, half the valuation. Otherwise they're too often wrong. Even then, the trade underperforms over subsequent year 1/3 of the time.
4 year average hold. Often longer. Patience is key.
