John Templeton
Referenced as the canonical contrarian investor — 'Maximum pessimism is the best time to buy'
Biography
Sir John Templeton (1912–2008) was an American-born British investor and philanthropist who built one of the greatest long-term investment records of the 20th century through disciplined global contrarianism. He founded the Templeton Growth Fund in 1954 and ran it until 1992, generating returns of approximately 14.5% annually — consistently above the market over nearly four decades.
Templeton was born in Winchester, Tennessee, attended Yale (graduating near the top of his class), studied at Oxford as a Rhodes Scholar, and built his early investment career at a New York brokerage. He became famous in 1939 for buying 100 shares of every company on the New York Stock Exchange trading below $1 — 104 companies, most of them in bankruptcy — and profiting from almost all of them as the wartime economy recovered.
He later pioneered global diversification at a time when American institutional investors rarely considered foreign markets, building positions in Japan (before it was fashionable), Europe (before it recovered), and emerging markets (before they were an asset class). He sold his mutual fund business to Franklin Resources in 1992 and spent his remaining years on philanthropy, endowing the Templeton Prize for progress in science and religion.
Templeton appears in 9 Oaktree memos with 23 total mentions. His famous maxim — "The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell" — is the single most frequently cited non-Marks quote in the corpus at crisis junctures.
Key Stories
The 1939 Trade — In September 1939, as war broke out in Europe and markets collapsed in panic, Templeton borrowed $10,000 and bought 100 shares of every company on the NYSE trading under $1 per share. Of the 104 companies he bought, 34 were in bankruptcy. He made money on all but four. This single trade defined his career and his philosophy: buy when pessimism is maximum, because maximum pessimism creates maximum mispricing.
The Japan Trade — In the 1960s, long before Western institutional investors considered Japan a credible investment market, Templeton built substantial positions in Japanese equities. He held them through 25 years of Japan's post-war economic transformation. By the time Japanese stocks became the hottest investment globally in the late 1980s, Templeton had sold most of his position. He bought at maximum pessimism and sold at maximum optimism — the full expression of his maxim.
The Maxim That Marks Quotes — Templeton's most famous observation — "The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell" — appears in Marks' memos at the most consequential moments: October 2008 as the financial system appeared to be collapsing, March 2020 as COVID closed the global economy, and repeatedly during the peak credit optimism of 2006-2007. The maxim is not just a slogan for Marks — it is an operational instruction for cycle-based portfolio management.
The Spiritual Investor — Templeton was deeply religious (he was knighted for his philanthropy to science and religion) and believed his investment philosophy was connected to his spiritual practice: humility in the face of uncertainty, patience as a virtue, and long-term perspective over short-term reward. Marks occasionally references this broader context — the observation that great investing requires qualities that are fundamentally character-based rather than purely analytical.
Impact on Marks' Work
The Contrarian Archetype: Templeton is Marks' primary historical archetype for successful contrarianism at scale. His record demonstrates that buying at maximum pessimism — in markets, geographies, and sectors that the consensus considers uninvestable — can produce extraordinary long-term returns.
The Pendulum in Practice: Templeton's career is the best long-run demonstration of the pendulum framework: systematically buying at one extreme and selling at the other, across multiple geographies and asset classes, over nearly 50 years.
The Operational Definition of Courage: Marks uses Templeton's actual trades — the 1939 bankruptcy purchases, the pre-everyone Japan trade — to illustrate what contrarian courage looks like in practice. It is not theoretical willingness to buy at lows; it is the demonstrated capacity to do so when the consensus is overwhelmingly against you.
Key Passages From Marks' Memos
"John Templeton said: 'The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.' He built a 50-year record proving he meant it. Most investors know this and cannot do it. Knowing and doing are completely different problems."
— Now What? (2008)
"In late 2008, I kept returning to Templeton's maxim. Not because it told us where prices would go, but because it told us where we were: maximum pessimism. And at maximum pessimism, the analytical case for deployment was the strongest it had been in a generation."
— Now What? (2008)
"Templeton bought Japanese equities in the 1960s when no one wanted them and held for decades. He sold when the Japanese market was the most expensive in the world. That is the simple statement of the strategy. The hard part is the psychology: buying when no one else will, holding for years without validation, selling when the crowd is still buying."
— Mastering the Market Cycle (2018)
Referenced In
Source: Howard Marks Knowledge Base — Oaktree Capital Management memos 1990–2025