The Unity movement said a major part of happiness was "thought control." Here, one focuses on things that are positive and productive. "Physical healing, wealth, inner peace-almost anything is possible if your mental processes are in tune with the great divine principles of the universe," Templeton told Proctor. Templeton was different in everything he did, even his religion.
Although a devout Presbyterian, he wanted to learn about all religions. "Why shouldn't I go to Hindu services? Why shouldn't I go to Muslim services?" he asked. "If you're not egotistical, you will welcome the opportunity to learn more."
Armed with a superb education and a strong mind nurtured by enlightened parents, Templeton was ready for more triumphs. But it would be a success that flouted investment conventions. Templeton's bargain philosophy argued that, if one buys a good company cheap enough, the cards would be stacked in one's favor. And there were conditions in which one could buy even so-so companies and do well.
The late 1930s, when Templeton was in his late 20s, was such a time. The stock market and the economy, after a decade of various failed inflationary recovery programs tried by the Hoover and Roosevelt administrations, were in the doldrums. Nazism was triumphant in Europe as World War II began. The U.S. initially watched from the sidelines as the Allies went down one by one until only Britain was barely standing. Templeton made several brilliant bets that were the foundation of his fortunes.
They were all based on his later stated philosophy: "The time of maximum pessimism is the best time to buy." Also, Templeton stressed that outstanding returns require independent thinking: "It is impossible to produce a superior return unless you do something different from the majority."
With noninterventionist, or what some would call isolationist, sentiment running strong in the United States in the late 1930s, Templeton took a different view: He concluded that the United States would be inevitably drawn into the war. Believing that the war would revive the stock market, he also predicted that the biggest winners would be the weakest companies that had been the biggest losers in the 1930s. He bet that they would gain the most statistically, but they would also have something else going for them that would greatly improve their after-tax returns.
Since they had been the biggest losers in the 1930s, Templeton reasoned, they would escape the excess profits taxes that would surely come with the war! Templeton understood how taxes, both explicit and implicit, affected performance.
Templeton hit the mark on all these bets. In the midst of the war, he started a money management firm with a few thousand dollars of borrowed money. He borrowed $10,400 and had his broker buy every stock that was below $1.
Four years later he had made some $40,000 on his daring moves. Templeton sold and later admitted he probably sold too soon. His bargain philosophy called for generally selling after four years and finding better bargains. Four years after he found these bargains, he believed, they would no longer be so cheap.
Templeton had done something dramatically different and won. Still, his against-the-grain approach was often met with skepticism. Templeton, who began trolling abroad for more bargains after World War II, started his Templeton Growth Fund in 1954. He became optimistic about Japanese stocks back when many Americans made fun of the Japanese and their products. Later on, as Americans would discover these Japanese stocks, Templeton would move on to other more profitable places. But Templeton also knew how to avoid disaster.
In 2000, he warned that tech stocks were overpriced. A new generation of mesmerized investors-many of whom had never heard of the Nifty Fifty or the investment disasters of the 1960s and 1970s-frankly thought that Templeton's best years were past.