John Templeton
Global Bargain Hunter
John Templeton hunted bargains globally decades before international investing was respectable, insisting that "if you search worldwide, you will find more bargains and better bargains than by studying only one nation." His signature move was buying at the point of maximum pessimism — famously purchasing 100 shares of every NYSE stock trading under $1 in 1939, and backing Japanese equities in the 1960s when almost no Western investor would. He demanded real value behind the price: low multiples on earnings and assets, conservative balance sheets, and businesses whose earnings power endured. The Templeton Growth Fund compounded at roughly 15% annually from 1954 to 1992, turning a $10,000 stake into more than $2 million.
Methodology fidelity
Thematic proxySources reviewed 2026-08-24Templeton’s global search, price discipline, maximum-pessimism stance, diversification, and willingness to change methods are well documented. He did not publish this eight-rule U.S.-filing screen. The P/E, leverage, price-to-low, book, dividend, margin, 5-of-8 verdict, and relative-value formula are app proxies. Filing form is not revenue geography: a 20-F is evidence of foreign domicile, while a U.S. filer’s global reach remains unknown.
Valuation Method
Relative Value
App modelTempleton valued businesses against their own history and against comparable bargains worldwide rather than through elaborate projections. This method mirrors that: a conservative multiple of normalized five-year earnings, capped at a market-average 15x so an expensive stock can never look cheap by its own inflated standard.
Screening implementation (8 criteria)
| # | Criterion | Metric | Threshold | Data Source |
|---|---|---|---|---|
| 1 | Bargain P/E | Price / EPS | < 12x (fixed ceiling; proxy for the cheapest 40% of the market) | Market Price, EPS (diluted) |
| 2 | Point of Maximum Pessimism | Price vs. Trailing Low | <= 120% of trailing low (post-2025 live price window) | Market Data -> monthly closes |
| 3 | Earnings Growth | 5-Year EPS CAGR | > 0% annualized | Income Statement -> EPS (diluted), multi-year history |
| 4 | Conservative Leverage | Total Debt / Shareholders’ Equity | < 1.0 (fixed cap; proxy for below-sector-median leverage) | Balance Sheet -> Total Debt, Shareholders’ Equity |
| 5 | Global Reach | Filing Form Type | Foreign filer is evidence; US-filer reach is unknown (current scorer marks it unverified) | SEC filing metadata -> form type |
| 6 | Asset Backing | Price / Book Value per Share | < 1.5x | Market Price, Balance Sheet -> Equity, Shares Outstanding |
| 7 | Dividend Record | Years Paying Dividends | Paid in >= 4 of last 5 fiscal years | Cash Flow -> Dividends Paid, multi-year history |
| 8 | Margin Durability | Operating Margin Trend | Non-negative over 3 years | Income Statement -> Operating Income / Revenue, 3-year history |
Intrinsic Value Method
Templeton Relative Value
App model5-year average diluted EPS × min(15, own median live-window P/E)Normalizes earnings over five years to look through single-year swings, then applies the lower of the company’s own median market multiple (observed over the live price window) and a 15x cap. Refuses when the earnings history is negative, too short, or straddles a share-basis restatement.
Verdict Logic
Quantitative screen across price, pessimism, growth, leverage, reach, assets, dividends and margins. Passes with 5 or more of the 8 criteria. Two thresholds (P/E ceiling, debt/equity cap) are fixed-value proxies for the cross-sectional screens Templeton actually ran, and are labeled as such in the criterion text.
What Would John Templeton Buy Today?
Sources
Investing the Templeton Way
secondary2008Lauren C. Templeton & Scott Phillips
Written by his great-niece, documents the bargain-hunting method: maximum pessimism, global search, and the 1939 purchase of every NYSE stock under $1 — 104 companies, 37 of them already in bankruptcy, held ~4 years for roughly a 4x return.
View source →16 Rules for Investment Success
primary1993John Templeton
Templeton’s own distillation: invest for real returns, buy value not market trends or outlook, buy at the point of maximum pessimism, search worldwide, and never adopt permanently any type of asset or selection method.
View source →Templeton Growth Fund record
primary1954–1992Franklin Templeton
The fund Templeton ran for 38 years compounded at roughly 15% annually, among the best long-run records ever achieved, built substantially on non-US holdings — including heavy Japanese positions taken in the 1960s at single-digit P/Es.
View source →