Monthly Archives: March 2009

Sir John Templeton, arguably one of the greatest investors ever, died last year. His value investing philosophy and philanthropic values made a lasting impact on me. For those who don’t know about him, Sir John Templeton basically founded international investing in the U.S. in the 1950s and the 1960s through his Templeton funds, which were eventually bought out by the Franklin Funds. He was a regular on Wall Street Week with Louis Rukeyser, a show I watched every week when I was growing up (I have been stock obsessed for a very long time).

One of his key tenets of investing was that the best time to invest in stocks was during periods of maximum pessimism. He consistently used times of maximum pessimism to buy companies for a fraction of their value. If you had invested $10,000 with him when he started his Templeton Growth Fund in 1954, you would have over $2 million by the time he stepped down from active management in 1987. (Be sure to read the book Sir John’s great niece, Lauren Templeton, wrote called “Investing the Templeton Way”)

I would argue that if we aren’t at a point of maximum pessimism then we are very close. I have been getting some panicked calls and emails not from investors in our fund, but from people who know I invest for a living. I have been emailed survival guides for the end of the world, watched videos of the end of America and responded to emails about liquidating IRAs and going to cash.

I think that if Sir John Templeton were alive now, he would be very excited and would be preaching that now is the time to invest, now is the time to be optimistic, not pessimistic.

This has to be seen to be believed, but BMW in all of North America sold 10 of their expensive Series 7 sedan cars in February. 10 cars for ALL OF NORTH AMERICA IN AN ENTIRE MONTH. That was a 99% decrease from last year’s number of 1502.

Here is the link:

BMW sales plummet

I think this blog post by John Hempton at Bronte Capital is probably the best blog post I’ve read all year and a must read analysis of GE. Here is one section that I loved:

Speaking as an outsider I have to agree – America at its best is a wonderful place. It is amazingly productive. The degree of specialisation of people and the cities they live in is wondrous. The innovation is jaw-dropping and it has changed the world.

Silicon Valley is a wonder of the modern world. But so are half a dozen fecund places in America.

So is General Electric.

America has plenty to recommend it – and if I did not love Australia so much you would see me on the plane yesterday.

But the accounting sucks. It sucked when the broker certified the taxi driver’s income at $350 thousand for the purpose of the no-doc loan and it sucks when Immelt certifies the reserves in GE’s accounts.

Here is the link: