Trading Wisdom Via John Templeton

*There is only one long term investment objective, maximum total after tax return.
*Success requires study and work. It’s harder than you think.
*Outperforming the majority of investors requires doing what they are not doing.
*Buy when pessimism is at its maximum, sell when optimism is at its maximum.
*Therefore, buy what most investors are selling.
*Buying when others have despaired, and selling when they are full of hope, takes fortitude.
*Bear markets aren’t forever. Prices usually turn up a year before the business cycle hits bottom.
*Popularity is temporary. When a sector goes out of fashion, it stays out for many years.
*In the long run, stock index prices fluctuate around the EPS trend line.
*Stock index earnings fluctuate around replacement book value for the stocks in the index.
*Buy what other people buy and you will succeed or fail as other people do.
*Timing: buy when short term owners have finished selling and sell when they’ve finished their buying, always opposing the fashion.
*Stock prices fluctuate more than values. So stock indexes will never produce the best total return performance.
*Focus on value because most investors focus on outlooks and trends.
*Invest worldwide.
*Stock price fluctuations are proportional to the square root of the price.
*Sell when you find a much better bargain to replace what you are selling.
*When your method becomes popular, switch to an unpopular method.
*Stay flexible. No asset or method is forever.
*Stock market investing takes more skill than any other kind of investing.
*A person can outperform a committee.
*If you begin with prayer, you will think more clearly and make fewer mistakes.
*I can’t say I’m familiar with Templeton’s work, but his name is infamous with investing. I’m up for any words of wisdom from those who came before me.