How A Small Town Tennessean Won Mutual Fund Fame, Even A Knighthood

John Templeton took the buy low, sell high mantra to its most extreme and prospered as a result. Image Source: Templeton.org

Selling fireworks and homemade wine in Winchester, Tennessee is not the classic path to becoming a Wall Street superstar, but that’s how John Templeton got his start. The mutual fund pioneer died a few years ago, but the story of his life is the subject of a documentary airing tonight on business channel Bloomberg TV.

John Templeton was a gambler. As a teen, he bet that raisin wine-yes, raisin-would be a hit in Winchester. It wasn’t. But he used poker winnings to pay for a Yale education and a trip around the world. And in the heart of the Depression, he bought shares of a hundred companies at the absolute bottom of the market. All but four rebounded and made Templeton a wealthy man. That cemented a market philosophy, which he described in 1990.

“Each day we buy that thing that is most depressed in price, and eventually, most of them recover.”

And for more than a quarter century, that’s how he managed some of the world’s highest-performing mutual funds. He’s described in the documentary as investing in small markets around the world that most Americans weren’t even watching.

“Americans thought Japan could only build rinky-dink paper toys.”

“That’s when John was building up his portfolio of Japanese stocks.”

When Templeton left Tennessee, he left it for good. He even left the United States for the Bahamas, going so far as to change his citizenship. Templeton always said it was easier to make bold moves far away from the big financial centers. Of course, the taxes were a lot less, too.

In his later years, John Templeton wrote extensively about life’s biggest questions: is God real, what is love, why do we exist? With his fortune, he established a foundation and the Templeton Prize, to encourage examination of those ideas. His idea was that the prize would be equivalent to the Nobel in importance—and dollar value. Queen Elizabeth knighted Templeton for those efforts.

Templeton was a frequent guest on Wall Street Week, including this appearance shortly after the 1987 stock market crash.