He made money as the great depression unwound into the second world war, by investing in, essentially, every penny stock on the NYSE.
He made money in every decade since, averaging 16% per year from 1954 through 1992, with his "Templeton Growth Fund", the grandfather of all Globally diversified mutual funds.
Even after he retired, just prior to the dot com bubble, (when everyone else was saying "it's different this time") he predicted most of those companies would soon go bankrupt, and abruptly made over $80 Million dollars shorting most of them. He said it was "the easiest money I ever made". He is a legend in investment circles and here are his 10 secrets to successful investing:
- 1. Invest for real returns: "The true objective for any long-term investor is maximum total real return after taxes."
2. Keep an open mind: "Never adopt permanently any type of asset or any selection method. Try to stay open minded and skeptical. Long term top results are achieved only by changing from popular to unpopular the types of securities you favour and your methods of selection."
3. Never follow the crowd: "If you buy the same securities as other people, you will have the same results as other people. It is impossible to produce superior performance unless you do something different from the majority. Buying when others are despondently selling and selling when others are greedily buying requires the greatest fortitude and pays the greatest reward."
4. Everything changes: "Bear markets have always been temporary. And so have bull markets."
5. Avoid the popular: "When any method for selecting stocks becomes popular, you will need to switch to unpopular methods."
6. Learn from your mistakes: "'This time is different" are among the most costly four words in market history."
7. Buy during times of pessimism: "Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell."
8. Search worldwide: "To avoid having all your eggs in the wrong basket at the wrong time, you should diversify. When you search worldwide, you find more better bargains than when you monitor only one nation. You also benefit from more safety thanks to diversification."
9. Hunt for value and bargains: "Too many investors focus on outlook and trend. Therefore, more profit is made by focusing on value. In the stock market the only way to get a bargain is to buy what most investors are selling."
10. No-one knows everything: "An investor who has all of the answers doesn't even understand the questions."
Sir John, as well as legendary investor Warren Buffett, have most of their best stock picks when there was blood in the streets, at the point of maximum pessimism.
Basically, if you invest with the crowd, you will get the returns of the crowd. If you can step outside of that box, when everyone else is panicking and selling, you just may be following in the footsteps of the best investors who ever lived.