Uncommon Sense: Sir John Templeton on Long-Term Investing, Counting Blessings, and Seeing the Big Picture
"If you look back on the history of Templeton Growth Funds, you will find that our success was built on bear markets — not bull markets."
On February 8, 1988, Sir John Templeton spoke to The Canadian Club about long-term investing. But, coming just a few months after the devastating Black Monday crash, he surprised the crowd with a lengthy sermon on gratitude and optimism.
Templeton’s speech neatly divides into two parts. The first half a heartfelt call for the modern generation to show a little gratitude that it lives in a time when “centuries of human enterprise are now miraculously bursting forth into flower” — while the second half shifts into practical investing advice and other economic topics of the day.
And, despite some fanciful predictions from Sir John on future economic growth and the enduring popularity of mutual funds, there is much to learn from his remarks.
(For those short on time — or just in a TLDR mood — I pulled out the fifteen most important lessons from Templeton’s speech down at the very bottom.)
Sir John Templeton: I promised to speak today on long-range investing — and I must emphasize that it is long-range. This is a topic that can't be discussed without talking about the context of the world in which investing occurs.
So let’s just spend a few moments describing the context we find ourselves in now in Canada and what is likely for the future.
Much of the discussion we hear recently focuses on the effects of the decline in stock markets and the problems of America and of Canada and of the financial community. But, remember: Everyone has problems. Every person has problems. Every family has problems. Every nation has problems. Always has had and always will have problems.
But these problems are not always solved — and I have never been smart enough to know how to solve these problems — and some are never solved. But I can say that I believe there are less problems today than in any one of the 48 years since I became an investment counselor. Not that we don’t have problems, but if you carefully consider each previous year there were equally numerous and, in general, more serious problems than there are today.
To concentrate on problems makes people blind to the big picture. There is something strange in human nature that makes us want to dwell on bad news, on catastrophes, on problems. But what we really ought to do is to carefully think through the blessings we have. Because for every problem you or the nation has, there are ten blessings.
We are blessed today as no other generation in history has ever been blessed.
Just think about it: no longer are the people of the world terrorized by tuberculosis, leprosy, bubonic plague, yellow fever, smallpox, syphilis, dypyheria, diabetes, or polio. Life expectancy has doubled in the past 200 years in North America — and possibly worldwide. Records are kept by Yale University that show that students now average ten inches taller than they did two centuries ago — probably because of better health.
There has been great progress in the field of medicine. In fact, 50% of all that is known in the field of medicine has been discovered just in the last twenty years. And 90% has been discovered in this century. About half of all the medical research scientists who ever lived are alive today.
For the first time in world history, there are more people now suffering from eating too much than from eating too little. Also for the first time in world history, there are more people suffering from too much entertainment than from too little.