Man with Midas touch: Story of one of the greatest stock investors

As an investor, we always like to idolise successful investors, and hence, many investors follow the footsteps of the ace investor, Warren Buffett. However, there is one investor, who’s not much popular. So, in this article, we will not only unfold the story of this successful investor but also, share insights on what kind of strategy he followed in his investing journey. Moreover, this investor was quite popular for investing in penny stocks. So, if you are someone who prefers investing in penny stocks, then grab a cup of coffee and enjoy this story!   

We are talking about Sir John Templeton, who was one of the greatest investors but not many are aware of him. Sir John Marks Templeton was born on November 29, 1912, in the small town of Winchester (Tennessee). He had started out with nothing but ended up being a billionaire. He strongly believed that ‘it is impossible to produce superior performance unless you do something different from the majority’.   

Templeton started his Wall Street career in 1938 and thereafter, never looked back as he went on to achieve new milestones one after the other. However, one of his best bets, which is always talked about on Wall Street is the one he made during the year 1939 when Germany invaded Poland. And in the next few months, Norway, Holland, and Belgium surrendered to the Nazis. When the war in Europe has sent shivers down the spine of most investors, panic at rampant conventional wisdom suggested seeking safety in more defensive assets such as cash, gold, or land. However, Templeton was not conventional as he believed in the ideology, “the time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”   

Templeton opened Wall Street Journal and identified 104 American companies that had experienced ‘such a terrible depression’ that their stocks traded at USD 1 or less. After a couple of days, he called a stockbroker and asked to invest USD 100 in each of those companies. Broker remarked, “This is a very unusual order but we’re going ahead with it but we’ve eliminated thirty-seven companies that are already in bankruptcy”. On this Templeton said, "don’t eliminate those" as he was so sure of his judgement that he convinced his ex-boss to lend him USD 10,000 to fund the bet.  

Fast-forward to 1942, the market stopped falling and soared like a phoenix and when Templeton liquidated his holding, he has profited on 100 stocks out of 104 and what was more astonishing was the fact that he had made five-time of his money.  

Certainly, he was the man with the Midas touch especially when it comes to penny stock investing.  

If you wish to read about more such investors, do tell us in the comment section. We would surely extend this series.   

Note: Some content has been referred from Richer, Wiser, Happier by William Green.