Topic: How To Invest

What is Pat’s commentary for the week of September 15, 2015

Article Excerpt

John Templeton, one of history’s most successful investors, played a big role in my investment education. One of Templeton’s most valuable investing guidelines is, “Invest at the point of maximum pessimism”. It’s also among the easiest Templeton quotes to misunderstand, and one that’s often misapplied. Note that Templeton didn’t say, “Invest only at the point of maximum pessimism”. Yet many investors take this quote to mean that you should hold your funds in T-bills or a bank account until you see “blood running in the streets” (a quote from another famed investor). That would be problematic to say the least. Pessimism is an open-ended condition. Pessimism never gets so bad that it can’t get worse. Maximum pessimism is easiest to spot in retrospect, since you can then measure it against subsequent events. One good example occurred in February 2009. A prominent Toronto investment figure, known for strong long-time views on stocks (bearish) and gold (bullish), convened a meeting in a downtown Toronto…