Sir John Templeton at 100

Monday, 03 Dec 2012 08:38 AM

By David Skarica

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One of the great investors of our time and one of my mentors, John Templeton, would have turned 100 on Nov. 29. Templeton’s way of investing and his life influenced me a great deal. In more ways than I could have ever imagined.

For most of my investment career, I have been a gold bug. Back in the mid-1990s, I read books on the U.S. debt situation and how the U.S. Empire could go the way of the British Empire. This got me into hard money or gold investing. Gold is the universal currency and a way to protect yourself against economic mishaps and devaluations.

However, during the past few years, my investment techniques began to evolve. One of the game changers was the financial crisis of 2008. My long-term view of gold and precious metals being a great way to protect yourself during the international debt crisis and unlimited money printing we are seeing from the European Central Bank and the Federal Reserve has remained unchanged. However, these are long-term trends. Gold is up over 500 percent since its low in 2000, whereas the Standard & Poor’s is down 7 percent during the same period.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

Shorter term though, moves in the market can affect gold. In 2008 gold sold off with everything else. At the bottom of the market in 2008 and into 2009, I started to see great bargains show up. However, many of these bargains were not just in gold and precious metals. At the time, I was reading “Investing the Templeton Way” by Sir John’s niece. The book was about his investing philosophy of buying maximum pessimism — buying cheap undervalued assets that are out of favor.

After reading this book, I began to look at markets around the world. I saw many cheap sectors and stocks. I used the teachings of Templeton to buy Tata Motors. It was in a booming market (India) and had fallen over 80 percent in price. The stock soared nearly 1,000 percent in the two years after I bought it.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

In the past few years I have bought more depressed assets. For example, a recent maximum-pessimism trade in the Financial Braintrust Alliance led to a more than 60 percent gain in a just a few months.

Templeton’s life also had a big impact on my own. At his memorial service in Nassau, Bahamas, four years ago I sat next to Christopher Ruddy. This is how I began to write for Moneynews.com and Gold Stock Adviser. So on what would have been Templeton’s 100th birthday let us remember his investing prowess and how he changed our lives for the better.

About the Author: David Skarica


David Skarica is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes the Gold Stock Adviser. Discover more by Clicking Here Now.

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