I was recently reminded of a legendary investor who pre-dated Warren Buffett by two decades. Sir John Templeton was American-born but rescinded his citizenship in favors of becoming British in 1968. His sage comments were eminently quotable. He pontificated on many subjects during his long and successful career. My favorite is “be fearful when others are greedy and be greedy when others are fearful”.
Sir John’s philosophy is a worthy one and still relevant today. I rather suspect the world’s current economic mood would lead him to be confident about the future and seeking opportunities.
Wise investors establish where opportunity exists but do not just buy stocks willy-nilly. Whatever investment circumstances prevail, there are superior opportunities and situations to avoid.
As a thought-provoking and hopefully profitable strategy, we have looked at the world of investing from a totally different perspective. Let us make no mistake; we do live in a global village. When Wall Street rises it is very rare that other stock markets do not follow (a situation that has prevailed for a century). Today more things move in tandem than ever before. Many factors beyond the basic strength of economies should be included in your reasoning. They include level of debt, inflation, interest rates, currencies and commodity prices.
The world is a witch’s cauldron stirred by politics, spiced with commodities, laden with debt and at the whim of interest rates. Dip your ladle into it selectively. I believe there are certain features you should seek when investing in an individual economy. They are political stability, a sound currency, local investors and sound economics. All are difficult to fmd. Other pointers to success are global themes that transcend borders. Energy, water, food, technology and pharmaceuticals fit into this spectrum. I hope we shall provoke gainful thought.