This past month of volatile global stock market performance takes me back to my book shelf. In this business, I’ve always found that looking back helps me ground myself in a stronger fundamental stance. Then I can look forward with clarity again.
Looking back at 2008 YTD performance, “Global Macro”, as the Street likes to call it, is back! Some investors out there with a rational global fact finding process like Peter Thiel at Clarium capital, are taking advantage of the confusion that seems to be breeding contempt all of a sudden in the momentum oriented levered long community.
Looking back, this is not a new investing “style” of course. On Wall Street, global macro has come and gone out of favor for a generation. One of the pioneers of the global macro trade, John Templeton, passed away this past month, at the age of 95.
The”Fast Money” folks who “buy high, and sell higher” wouldn’t have got along very well with Sir John. One of his classic principles of investing was “to buy when others are despondently selling, and to sell when others are greedily buying.”
John Marks Templeton was born in 1912 in rural Tennessee. He was not only the 1st Yalie from his home town; he was the first to attend college. After finishing 1st in his Yale Class here in our offices’ stomping grounds in New Haven, Templeton went on to become a Rhodes Scholar. Then he obtained his Law degree from Oxford. At the age of 27, he famously bought 100 shares of 100 stocks on the NYSE that were trading under a buck. In 1954 he founded the Templeton Growth Fund, and the rest is history.
Templeton was a man who professed fortitude and “open mindedness”. He didn’t follow the Wall Street crowd. He wasn’t into social climbing or “owning stuff” either. He lived in the Bahamas, drove his own car, and until is later years was often sighted power walking in the ocean against the tide. An Investor’s Business Daily article from 1998 quoted him as saying that he hadn’t watched more than 84 hours of TV in his life.
According to the obituary ‘The Economist” wrote about him on July 19th, 2008, “late in life he favored market neutral hedge funds… he disliked speculation, and any instrument over-geared to make money.”
Templeton liked the idea of hedge funds actually being hedged, and didn’t like leverage – fancy the complexity of that.
God Bless John Templeton’s soul. Wall Street needs to be rebuilt with men and women of principle like him.