Sir John Templeton - Contrarian | Documentary

this is the story of john templeton a boy from tennessee who was taught to think differently to see the world in terms of what was possible instead of what was not iconoclast legendary investor [Music] spiritual traveler seeker of god [Music] contrarian [Music] harvey and bella templeton of winchester tennessee welcome their new son john in november of 1912. from early on fella instilled in john as well as his older brother harvey a great sense of adventure and curiosity bella is a well-educated woman which was a little unusual for sort of uh down home tennessee she took them on trips across country new york and philadelphia and down the coast she had an adventurous spirit and clearly this influenced uncle john vela gave the boys both of them free reign and the means to do with the world what they wanted to do in winchester at that time you could go into a hardware store and buy sticks of dynamite and they would walk down the street and go blow stumps out of the field kaboom was great i think what he loved most about his mother was the fact that she allowed him to be independent [Music] john's father harvey templeton was a serial entrepreneur john's father was a kind of a self-made lawyer he created a cotton gin business he was involved in lots of different business ventures certainly my grandfather was very entrepreneurial his office was up above the bank that overlooked the courthouse when property came up for auction he would buy it very cheap then he talked to the farmer i'd like you to stay there don't move i own it but this is your home and i think uncle johnny learned a lot from his father about that john followed in his father's footsteps hunting for bargains and displaying the beginnings of great entrepreneurial spirits his first business of note was at the age of eight he used to buy a lot of firecrackers and sell them to his friends he sent away to ohio through a major production plan and got three giant boxes back and he sold them for three times what he paid for [Music] he also dabbled in automotive interest rebuilding a broken down forward purchased for ten dollars when he was twelve and his friends were driving way before they were 16 years of age they bought a hutmobile and then they found another automobile that they could take parts from they combined them all into one vehicle and ended up with a car that would go to callan six miles away every third try and at the age of 17 john's entrepreneurial spirit extended into the production of a not too delectable but otherwise serviceable tennessee wine they bought a keg of raisins and the keg of raisins come the sticker on it it says warning do not add water and sugar to these raisins or it will turn to wine literally the sign said that they slipped out there one night to sample their their goodie and pulled the lid off of it and stuck a ladle down in there and uncle john took a big sip he said this it's got lumps and stuff in it it was full of bugs john's father tapped his entrepreneurial spirit promising the young templeton cotton bales in exchange for good grades grandfather had promised dad that if he got in all a's in every report card he would be given on credit a bale of cotton and that was real money in those days when it came time to think about college john with his steadily growing single-mindedness decided only one college would do uncle john asked a local farmer where the best college in the world was the man said yale college one of the things that was required was a math course which they didn't offer so john went to the principal of the high school and said sir i need this course and the principle is well john marx if you can get five other students and if you teach the course and if you all pass the final exam then i will certify the course we taught the course they all learned it and they passed tests on it [Music] from a very early age he was identified in tennessee for having a kind of maturity about him and a farmer who must have been 70 walking down the road said are you john marx's boy i said yes sir he said well you know that john marx he was born old there was a kind of a wisdom and a foresight and a future mindedness in john templeton he seemed to have direction he didn't necessarily know what was at the end of the road but he had a strong sense of direction [Music] having worked so tirelessly to earn his place in new haven it soon looked like the depression would send him right back home because john's father could no longer afford tuition my grandfather was not the world's best businessman he speculated on the futures market in chicago and then he lost everything lost it all they were bust [Applause] after his first year in college his parent called him up and said he couldn't support him anymore so he had to work his way through the rest of yale my grandfather had to work three jobs in order to pay for school he always wanted savings he believed in thrift he didn't want to be unstable like his father john also developed another source of income to support himself uncle johnny was gambling his way through yale to make ends meet he was able to make a lot of money you know playing poker with some of the more wealthy kids that he had his intelligence and mathematical abilities were such that he really understood probability he wouldn't have gotten a clue out of his face his poker face would be next to nobody she didn't know what he was thinking poker taught him the importance of taking measured educated risks i wanted to make a big investment one not two and if it was today they probably would not let him gamble at the casinos through these efforts john learned enough to pay his tuition through the rest of his years at yale and amazingly almost in spite of them did so well academically that he went on to become a rhodes scholar [Music] john tried to study business at oxford but was told that gentlemen do not study business so he studied law instead but what was most notable about his oxford experience was that he was able to travel extensively travel which was financed with poker winnings his travels took him to the 1936 olympics he took a trip around the world the middle east the far east china japan he went to various countries on deck passage so he didn't pay for even a hammock because it was cheaper he ran out of money in south france and went to monte carlo he financed the rest of his his trip he'd been gone for so long his mother actually thought he had died but he came back with this great bedrock of knowledge he had come from this small town in tennessee and really hadn't seen the world his eyes were opened [Music] when he returned to the united states john had more than just a new global outlook he was secretly engaged to judith dudley folk a wellesley college graduate and debutant from nashville she was a charming and beautiful southern belle who had once earned the title most dated her dance card was always filled he found judith's date book and on one saturday she had seven different dates she was very popular at wellesley he had received a letter from someone when he was in oxford that he better come home right away because if he wanted to marry her this was the time where she was going to go off with somebody else friends were writing to say you know we've found that judith is engaged to three other men he always said but i won so he was determined you know he was i think quite the romeo when uncle johnny and judith were dating they would get in the car and drive around in a stutz bearcat it was a pierce arrow which was a four-seat convertible didn't sing violate me and violent time violate me in violent time in the vilest way that you know ruin me ravage me utterly savage me on me no mercy show it was a great song he was very fun loving [Music] judith agreed to move into a six-floor walk-up outside of harlem with john to save money they were in a cold water flight in new york they would save 50 cents on every dollar furnishing their house largely by going around and finding stuff on the streets if they decided they wanted a really comfortable stuffed chair well they went to goodwill they didn't care one toot whether it fit any decor or anything like john judith was not bound by convention she worked full full-time in advertising which was unusual in those days for women she had her job he had his she's gone to college and she felt like she wanted to use it he was really enamored with the kind of person that she was dad was proud that she was someone who wanted to carve out her own way i believe that he viewed women as fully capable as men [Music] john started his financial career at the investment firm of fener and bean the predecessor firm to merrill lynch just prior to world war ii john looked at the market he figured that many of the underperforming stocks would gain value if war were to break out [Music] [Applause] his first major stock purchase was putting ten thousand dollars into 104 penny stocks right before world war ii he asked his boss at the time to front the money for him boss thought it was a bad idea but he trusted john by 1944 that 10 000 was worth 44 000. he was always trying to find things that were out of favor in 1940 he purchased a small investment firm which only advised five families um and it was called templeton dabrow advance when he really started his investment management company he didn't pay himself anything for three years nothing but then the business began to prosper and he decided to surprise judith with their very first vacation i remember the christmas of 1950 i got my toys my mother was looking around let me see a box and he says look up in the tree it was a two week vacation to bermuda [Music] they had motor scooters she was behind him [Music] and a truck coming the other way clipped on the side of the head she was at the hospital and died two hours later it was a it was a tragic accident [Music] it's difficult for a child to pick up how he was responding to those events because he wouldn't reveal anything in the most painful parts he would not have said anything to others judith's death affected uncle john very deeply i don't know that he ever got over that [Music] after judith's death john threw himself even further into his work it was his son kit who brought the next love into his life irene butler well we lived two houses away a kid used to go over there after school and have cookies and milk irene was pretty considerate it was the one who invited my mother to tea and so that kind of set the stage she loved him um long before he was wealthy she loved him for who he was john and irene were married in 1958. the family now included irene's two children malcolm and wendy as well as john's three kids jack candy and kit and in an unusual move designed to bring them all together the newlyweds decided to take the entire family including several cousins on their honeymoon we went on the queen mary to europe and we were all between the ages of 11 and 19. at the start of the trip he told us this is the amount of money that you have to spend on the trip and if we ran out of money it was just going to be too bad we wouldn't be eating then my parents sat in the back of the bus for eight weeks holding hands probably clutching hands we stayed in youth hostels and we ate a lot of bread and cheese that was a very valuable lesson in [Music] thrift thrift and looking for bargains both home and abroad would become hallmarks of john's investing career which included the advent of the templeton growth fund the fund was unique in that it looked all over the world for investments it didn't confine itself to any market he pioneered global investing he was not parochial about being in the united states his ability to look elsewhere made him really extraordinary he used common sense he was very inquisitive he could absorb knowledge like a sponge common sense ain't that common anymore in the late 1960s john sold his advisory firm but the buyer didn't want to purchase the templeton growth fund because it was too small so he kept it now in his mid-50s he decided once and for all to get away from the herd mentality of wall street john was kind of the ultimate contrarian he moved you know from manhattan to the bahamas and one of the reasons to do that was he removed himself from the crowd many people counseled him against this i was his first employee in nassau so it was girl friday and he just then of course he only had the templin fund the first templeton office in the bahamas was located in an attic space over the police station and a liquor store one of the things he said was it's the safest place i could be who's going to break into a store that's right alongside the police station everyone else had a skylight that leaked [Music] in 1974 john galbraith joined templeton john galbraith said look let's work together i'll distribute your funds it had some 13 million dollars in it so it was a teeny tiny fund that was a very very important development for the success of the business and i said to john i'll take on the marketing of this fund and in 10 years i'll have it up to 100 million that's when the talent started to come into the firm that was the beginning with galbraith at the marketing wheel money under management began to skyrocket along with john's fame and reputation he began appearing on the cover of forbes and the lewis rukhizer show john templeton remarked the other day i am no wiser than i was 20 years ago just better known then everything expanded you know soon the phone didn't stop ringing john was entrepreneurial by always doing what nobody else was doing when we were trading in thailand and singapore and countries that people didn't know exactly how we were even going to settle the trades we were in the forefront john templeton was way ahead of his time in the emerging markets he was investing in korea before people are invested in korea japan the early 70s was an emerging market americans thought japan could only make rinky dink paper toys that's when john was building up his portfolio of japanese stocks he had significantly underweighted the united states and at that time that was almost you know heresy in the early days i couldn't understand why he was going to these god forbidden places but he certainly was right there you go the rest is history john is always looking around corners for opportunities sometimes in the most unusual of circumstances and often at the point of what john called maximum pessimism my stepfather had silver buried in an apple orchard in ontario during the height of the cold war he went to the bank and got as many silver dollars as he could he buried any of us got to it we would have something to get food and supplies with i received a letter my first year of college and in the letter it gave me instructions on how to get to the farm via the sewers every crisis john tumbleton was in the midst of it there was the maximum pessimism that was the buy signal john saw every downward turn in the market as an opportunity if a company is undervalued he wanted to own it john's whole theory was you buy bargains buy stocks that nobody else is buying nothing presented a better opportunity for john than a market meltdown i was there in 1987. the market's down 15 people were panicked beyond comprehension we'd never seen anything like it john came down to the trading floor it's unbelievable john john what do we do and he said let's go find stocks to buy he was a quintessential american in a number of respects and one of those is his built-in optimism the glass was always that full with search on he was never flustered he's very disciplined and he was very patient as an investor stocks we bought we held for a long time the length of a hold on a security will average five years today the average stock on the new york stock exchange he's bought and sold in 28 seconds he was able to delay gratification in a way that really doesn't come naturally to many people at all but he could really take it to a different level the late 90s brought another opportunity for john technology stocks were going through the roof everyone was buying but not john he started betting against the market shorting tech stocks which simply meant that he would only profit if the market soured it's very scary shorting a stock in a market like that it can conceptually go up forever so your losses are infinite it was a little bit like standing in front of a train it was frightening even though his paper lost his mountain john stook to his convictions and doubled down he ended up doing incredibly incredibly well but he knew that the bubble would burst he predicted the crash of hawaii and the housing bubble bursting even then he had the vision john always reminded me a little bit of yoda in spite of his extraordinary financial success john never wavered from his commitment to thrift he was not interested in the trappings of wealth we lived very humbly very simply he traveled the economy he would not go over and beyond where it wasn't necessary he never dressed like a millionaire or a rich man he probably wore the same lime green suit for about 24 years john was one of the very early adopters of light sensors there were timers on the lights in the bathroom lights would just go out you just could not reach that sensor from where you needed to turn the light on i think anybody in america that grew up in the depression in some ways changed your dna i wish uncle johnny's thrift would rub off on my children my wife says no i'm not thrifty i'm cheap i once asked him why are you so vigilant when it comes to savings and he said well for opportunities of course it gave him the funds necessary to take advantage of volatility in the stock market he always had ready money thrift was only one of john's many principles the key templeton principles that john templeton really defined for an entire generation of investors were one don't follow the crowd buy low and sell high by the point of maximum pessimism for years people even sophisticated analysts from wall street would say what is your investment approach and he said well i just searched for bargains which is perfect tennessee talk he had a way of making things very clear that were very complex i asked uncle john one time i said now when's the best time to invest when you've got the money well what's the market kind of do it's going to go up and down the ability of communicating this philosophy and how it was so commonsensical to people attracted investors he had the golden touch everybody wanted to come and see him i once asked my uncle if i could see him he said well i can give you a half an hour between 9 30 and 10 about three months down the road so first time i've got is april 2nd at 8 35 not 8 30 8 35 everything was very regimented he was all concentration it was work work work he was very conscious of the value of the dollar and i'm not wasting a dollar or a minute of time i finally talked him into going fishing and all of a sudden he disappeared we looked around to find him and he was back in the cabin reading the wall street journal he defied conventional wisdom in terms of how much you could get done in a day in a week in a year in a lifetime [Music] he maintained a pretty uh disciplined schedule he was prompt to be at the office at 8 30. he would leave at 11 o'clock he would leave promptly at 11 30. lunch was to commence at 12 10 adhering to a strict schedule i know of many dinner parties where dessert hadn't been served and it was nine o'clock and he would get up and leave who says time to go check please it didn't matter where he was he could be eating with the queen and so if you ask where he was i'd tell you exactly and be accurate it was that punctual [Music] he had a practice of walking a mile in a shoulder deep water marching against the current up and down the beach walking back and forth maybe 50 yards i do remember when we were real little holding on to him and he would drag us through the water he would put on pretty much the same outfit every day it was her regular sight he had a couple of bands on his chest he said the bigger fish had been biting me but i've taken care of it i'm having them removed and i thought here we are in the ocean he's going to have the fish removed it turns out very practical solution he went to spear fisherman and he said i'll pay you so much for each fish so he solved this problem every time you think you had him pegged he would surprise you john striff work ethic and practical approach was reflected in what was becoming a remarkable track record he started to attract investors of all stripes and colors the first annual meeting was in toronto and we got one chair one person showed up and then by you know the mid 80s it was getting up in to 10 000 people it was though a rock star had arrived on stage when he came out it was really an amazing event i was absolutely blown away they were truly pilgrimages we'd always start with a prayer he sits at the side of the stage and he start answering questions about any topic you can possibly imagine somebody would ask about general motors but then you'd have people ask about what advice can you give me about raising my children it was just the most extraordinary thing that i've ever seen you could have heard a pin drop in that room it was almost as if nobody was breathing because they were hanging on every single word john spoke from the heart he told it straight if we'd had a bad quarter he would tell them exactly that he often said i'm wrong one-third of the time and i'm right two-thirds of the time unfortunately that carries us he was the first really kind of rock star investor where people would travel all the way to toronto to hear what he had to say john's record speaks for itself ten thousand dollars invested in 1954 would have grown to over two million dollars by the time he retired in 1992 john allowed ordinary investors to achieve financial goals that they otherwise didn't have the opportunity to achieve shareholders would say after 30 years my kids went to college they got graduate degrees you've really transformed my life [Music] when you see the many scandals in the investment world and then you look back and you see the long career of sir john and it's so so principled he was honest john galbraith in all the years they had worked together they never had a legal written document there was not any contract he was careful to be very honorable he trusted people and when you looked him in the eye and he looked you in the eye and you agreed on something then that was good enough the word was his bond and that was deeply important and i remember in 1985 and the whole due diligence process to go public in london was extremely in-depth the auditors could not believe that the firm had never been sued legendary managers out on wall street it meant a lot to them to get an allocation from john templeton not for the business but because of what his standards were and what he represented as an investor i remember being in tennessee and lying under the stars and i wrote to dad and said why do i exist he wrote back and said those are much too busy questions to deal with you should deal with other things he was just an extremely busy man traveling all over the world uncle john had a very demanding high pressure job he was always working discipline controlled his life so much that it was hard for him to allow emotion john was not a talking person so to speak he bottled up everything men of that generation were taught to keep their emotions in check even though he didn't always seem to know how to show affection john loved his children no question about it i was walking with him one day i said you know papa your children really love you a whole lot and he stopped and said you really think so he was very complex he was aloof but he was totally kind in 1972 i got married he said i'll drive you and i'll drive your bride [Music] i mean a white man driving a black man to get in it was unbelievable never heard of it [Music] love was one of the many big questions and mysteries of life that began to consume john he brought his trademark open-mindedness and rigorous analytical thinking to these questions to religion and even to god it was really in the 70s that he started to become more spiritually curious john's spiritual exploration like many things started with his mother a devout christian vela thought beyond the traditional and encouraged her son to do the same to ask hard questions john was a real skeptic about conventional theology i traced some of this back even to his boyhood he was in tennessee where religion was a very confining captive thing the biggest game in town were the revivalists they were very restrictive in what you may or may not do they found that the framework was very confining his mother was listening to teachings from the unity school of christianity from the radio unity is a freer more liberal approach to the message surrounding god the religions i know are full of thunderbolts and fiery chariots and unity is kind of pastel the pink blends into the purple and so on armed with his mother's expansive thinking john began searching i would say uncle johnny's most important question would be why are we here the big questions were always bigger than big was heaven possible he was a tennessee mystic he loved big bang theory he loved quantum physics said him one time you're interested in very big things and very little things cosmology and atoms i've rarely met somebody who had more curiosity than me [Music] john came to the conclusion that although scientific advancement was accelerating exponentially religion and theology were stuck in the dark ages but centuries ago religion and science progressed and advanced together and in glove the first hospitals were built by the church many doctors were monks and priests at the end of the 19th century science religion tended to go their separate ways science became more dependent upon what you can see what you can measure if i'm a scientist i'm not going to touch religion if i'm original i'm scared of science many people today unfortunately think that science religion are still in some kind of conflict or warfare with each other science can seem to be atheistic and religion can seem to be dogmatic and stuck in old paradigms john felt that if you could get people who are very intelligent atheists theologians hardcore physicists mathematicians if you could get them all together talking that that new information would emerge so we have here someone who knew that you couldn't answer the big questions in the conventional way so he wanted to gather around him heretical unusual imaginative thinkers to think with him about the great problems to help attract and recruit the brightest scientists and theologians john turned to the same method that his father had used to engage and inspire his own mind so many years ago money establishing the templeton prize the goal was to examine some of the big questions in life why are we here does god exist can forgiveness be studied how about love john saw that alfred nobel had forgotten this area and he felt it was so important he made sure that the prize was always larger than the nobel prizes templeton prize winners have included a broad array of people including mother teresa writer and activist alexander solzhenitsyn physicist charles towns and his holiness the dalai lama john templeton did his most important work after he got his gold watch john earned a tremendous amount of money decided he was going to devote that money to answering the big questions the prize was going to be after his will and irene his wife said why are we doing it after you're dead let's start now [Music] lots of times the scientific community would say oh you know john you can't possibly do scientific research on love what are you thinking or forgiveness there's just nothing there he expected some criticism some flack for doing this somehow scientists feel that something strange has gone here that this is some fifth column you know bringing religion back into sounds there were critics who said he must have an ideology john knew that not all of society would understand and if that didn't phase him it had a parallel about his investing when he invested in a company if the market didn't see it and the prices went down so much the better he once said to me criticism is the fertilizer we grow in and that means bring it on it took a long time for people to to begin to take into serious life i think he was willing to be open to all discoveries no matter what it was john templeton was an explorer he insisted always on having good scientists doing good science he never said here's what i want you to find out he was a contrarian somebody who did not follow the sheep john templeton stuck to his convictions through hell in high water john templeton was a value investor [Music] and not just when it comes to stocks he selected principles and virtues with the same kind of diligence and that means that when he invested he invested for the long haul he's made a bet that there's much more that we could learn dad loved science because he felt that scientists do ask probing questions why is the world built the way it is why is gravity the way it is do you want to understand why is it this way and you realize that that cannot be completely supplied by science alone could we be alone is there life elsewhere is the universe going to stop and end or crunch at some point in the far future he got scientists and theologians who in the past had never spoken to each other had just felt that they were enemies really dialogue he's encourage everybody to think carefully about religion and science origin asks you know how did the world begin what creative and science says how does it work but it all boils down to that last question why are we here he said who can know who knows do i think it'll be in my lifetime no do i think it can ever be answered i have no way of knowing that how little we know how eager to learn how did life begin what are the implications of that perhaps e.t life did you say e.t i did you know what we'll learn to find out there is enough work being done that we can hope to have significant or substantial quantum leap in answering this question within the next century it's almost guaranteed at the end of that they'll have four new big questions they couldn't have thought of at the beginning [Music] ever the contrarian john decided to make one last overarching bet against conventional thinking he dedicated his entire fortune to the exploration of these big questions to advancing spiritual discovery nobody was interested in this kind of information before john templeton started looking at these subjects and saying what more can we learn so no one would have worked on virtue courage well-being positive emotion gratitude forgiveness 15 years ago john got the field going and that was the big question whether or not if you funded these great minds whether or not they would come and ask questions which they would have considered embarrassing a decade before he cared about doing something that could have a major revolutionary effect on how people understood themselves psychology biology the social sciences have been all about what's wrong with people if you will original sin forms of science and where does original sin lead to a human future well no place but if you believe that alongside our capacity for evil is a capacity for good which sits there independently and has a very different evolutionary stream then there is a possibility of a positive human future john's legacy was to combat the idea that the scientific answer which you might find out in your lab you know the one you can publish in the scientific journal is where sans finishes john would see that as where science begins that's a neat legacy to kind of do what nobody else is doing john's gonna be recognized as a renaissance man in our own time and there are very few people like that i think when i made and they broke them all he will never be forgotten and he will never be outdone

Channel: Investor Archive

Views: 22,870

Keywords: Investing, Stocks, Economy, Finance, Stock market, Business, Capital, Value, Tax, Debt, Insurance, Profit, Equity, Cash, Securities, Dividend, Bonds, Asset, Liability, Growth, Loan, Bank, Wealth, Obligation, Fund, Earnings, Currency, Portfolio, 401k, Interest, Retirment, Debit, Credit, Corporate, Enterprise, Analysis, Real estate, Inflation

Id: K__WTucylzk

Length: 43min 19sec (2599 seconds)

Published: Sun Nov 29 2020