Their portfolios were hammered. They forgot the words of the great sage: "The time of maximum optimism is the best time to sell."
And it is also the best time to short. Templeton invested $185 million, making a huge short bet on Nasdaq stocks early in 2000. He made a $90 million profit on that investment, according to his grandniece, Lauren Templeton, a hedge fund manager.
Once again, Templeton was proved right. But he had been right again and again. His close to 40 years of running the Templeton Growth Fund could be likened to the dynasties of the New York Yankees or the Montreal Canadiens. From 1954 to 1992, the fund delivered a 14.5% annual return. A $10,000 initial investment would have grown to $2 million when Templeton sold to Franklin.
Franklin paid some $900 million, much of which would go to Templeton's various foundations. Templeton would be acclaimed as one of John Train's great "money masters." Train praised him as an incredible bargain hunter. "He insisted on buying only what was being thrown away," Train wrote. Templeton's own brand of bargain hunting should never be thrown away by those seeking outstanding returns.