That single idea is precisely what turned John Templeton into a legend in investing.
When a market is clearly doing well, it means everyone can see it, and prices have already reflected that optimism. Everything has been priced in. In other words, you’re no longer buying at a good price. In fact, what once looked attractive may now be High Risk with Low Return.
By distancing himself from the crowd, Templeton searched for opportunities where things were bad or very bad in the present, but had a chance to become less bad or even good in the future. He applied this strategy in 1939, right as World War II broke out and market sentiment was extremely pessimistic. That was the beginning of a legend.
Now, back to the main topic. What stood out this week?