Lauren is the author of Investing the Templeton Way: The Market-Beating Strategies of Value Investing’s Legendary Bargain Hunter, and a Portfolio Manager. She is the niece of Sir John Templeton.
Lauren Templeton, Lauren Templeton Capital Management – ‘John Templeton Legendary Value Investor’s Market Beating Strategies’
* Background
o Father’s example – saved 50% of income and invested
o Taught her to pick a ‘stock a month’ as a young lady and covered bedroom wall with the certificates
o After college, Sir John Templeton seeded her hedge fund with $30M
* Sir John Templeton’s 15 personal attributes
** Self reliance
** Reasonable risk taker
** Sense of stewardship
** Drive to diverse
** Bargain hunting mentality
** Broad social and political awareness
** Flexibility
** Large time to study
** Ability to retreat daily (mid-day ocean walk, lunch, nap)
*** Extended network of friends
*** Patience
*** Thought control
*** Positive thinking
*** Simplicity
*** Great intuitive powers
* Academic idea of homo economicus – always making the rational decision in a given situation
o People are not always rational (Las Vegas odds, lotteries, credit card balance and money in a savings account)
o James Montier ‘The Little Book of Behavioral Investing’
* X System (Dr. McCoy)
* Quick process, short cuts
* C System (Mr. Spock)
* Logical, think through
* Crisis Happens – Time of opportunity
o Post September 11th, 2001
* Airlines stocks plummeted, with Sir John, bought the 3 that dropped 50%
o Swine flu epidemic of 2009
* Mexican airport operators hit extremely hard
o Over time, stocks 14% more volatile than fundamentals justify
* Sir John – guidelines
o Hold reserves
o Develop a ‘wish list’
o Place good till cancel orders 20% below current price
o Be optimistic about the innovation and ambition of others
o Managing money away from Wall Street led to better erturns
o Investor returns do not match market returns.
* (3) broad categories applicable to investing
* Traditional (exploit information)
* Quantitative (better model)
* Behavioral (Irrational, herding, fear)
* Sir John core beliefs
o Avoid countries trending toward socialism
o Favor savers &enterprising citizens
o Well positioned firms with growth are best long term
* Q&A
o European Financial Crisis?
* Bought Richemont (luxury watches)
* Emerging market citizens hungry for status items
Value Investor Conference: Omaha, Nebraska
Dustin Hunter, SunRift Capital Partners (www.sunriftcp.com)
(These notes are to the best of my recollection.)
