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Templeton's 22 Principles For Successful Investing

Sunday, June 05, 2005 | 11:15 AM
in Investing | Markets | Psychology/Sentiment

Templeton's 22 Principles For Successful Investing

1. There is only one long term investment objective, maximum

"One of the brightest minds
and irreverent voices on Wall
Street today. . .truly is one
Wall Street's important
thinkers and rising stars."
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"Making the world of finance
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Prices, Wind Power
Read it here first: Implode-O-
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The End of a 20-Year Energy
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Quote of the Day: Citibank
after tax return.
2. Success requires study and work. It's harder than you think.
3. Outperforming the majority of investors requires doing what
are not doing.
4. Buy when pessimism is at its maximum, sell when optimism
maximum.
5. Therefore, buy what most investors are selling.
6. Buying when others have despaired, and selling when they ar
hope, takes fortitude.
7. Bear markets aren't forever. Prices usually turn up a year bef
business cycle hits bottom.
8. Popularity is temporary. When a sector goes out of fashion, it
out for many years.
9. In the long run, stock index prices fluctuate around the EPS t
line.
10. Stock index earnings fluctuate around replacement book val
the stocks in the index.
11. Buy what other people buy and you will succeed or fail as ot
people do.
12. Timing: buy when short term owners have finished selling a
when they've finished their buying, always opposing the fashion.
13. Stock prices fluctuate more than values. So stock indexes w
never produce the best total return performance.
14. Focus on value because most investors focus on outlooks an
trends.
15. Invest worldwide.
16. Stock price fluctuations are proportional to the square root o
price.

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The Big Picture | Templeton's 22 Principles For Successful Investing Page 2 of 14

on Glass Steagel 17. Sell when you find a much better bargain to replace what yo
Pending Home Sales Index selling.
Falls 14.6% below May 2007 18. When your method becomes popular, switch to an unpopula
Five phases to the current method.
down-cycle 19. Stay flexible. No asset or method is forever.
Pricing in a Bush Presidency 20. Stock market investing takes more skill than any other kind
Rubin: Economy Facing investing.
`Extended Difficulties' 21. A person can outperform a committee.
Open Thread: Hedonics - or 22. If you begin with prayer, you will think more clearly and ma
"Dedonics" ? fewer mistakes.
Federal Reserve RSS Feed
I first came across this list in Charles Ellis book, The Investor's Antholo
Ideas from the Industry's Greatest Minds. Its also online here: William
JULY 2008
The Templeton Touch (1983).
Sun Mon Tue Wed Thu Fri Sat

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John Magee: Technical

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Fredric Dannen: Hit Men:

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Stephen Jay Gould: Hen's

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Graham Chapman: The

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