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TIP594: Contrarian Investing & Sir John Templeton w/ Scott Phillips

Dec 22, 2023

01:21:24

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Scott Phillips, Chief Investment Officer at Templeton and Phillips Capital Management, discusses the investment lessons he learned from studying Sir John Templeton's career. They cover the importance of independent thinking, teaching children about money, generating excess returns, diversifying away from the dollar, investing in China, and shorting market bubbles. They also explore Templeton's upbringing, contrarian investing approach, and recognizing irrational optimism.

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Episode notes

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Quick takeaways

Sir John Templeton's independent thinking and upbringing shaped his investment philosophy.

Living through the Great Depression taught Sir John Templeton valuable lessons about financial stability and preparedness.

Sir John Templeton's career highlights the importance of patience, persistence, and a long-term investment approach.

Deep dives

The Influence of Sir John Templeton's Upbringing

Sir John Templeton's independent thinking and willingness to stray from the crowd can be attributed to his upbringing. His parents, who were successful and ambitious in their own ways, provided role models of self-reliance and individualism. Growing up in a rural setting, he was not influenced by social conventions and compared himself to others less often. This upbringing fostered a sense of independence, self-confidence, and the ability to think for himself, which later shaped his investment philosophy.

Introduction

2min

Sir John Templeton: Early Influences and Drive for Learning

13min

Teaching Frugality and Countering Consumerism

12min

Contrarian Investing and Sir John Templeton

14min

Taking Advantage of Market Sell-Offs

8min

Finding Bargains: Sir John Templeton's Investment Philosophy

21min

Sir John Templeton's Approach to Investing and Recognizing Irrational Optimism

16min

On today’s episode, Clay is joined by Scott Phillips to discuss how to invest during times of max pessimism. Scott is married to and manages money with Lauren Templeton, who is Sir John Templeton’s great-niece. Sir John was one of the greatest international investors of the 20th century and the master of finding pockets of the market that were most distressed and offered the highest level of asymmetric returns.

Scott Phillips is a Principal and Chief Investment Officer at Templeton and Phillips Capital Management, LLC. Mr. Phillips also serves as a Managing Member to the Templeton and Phillips Partners Fund, LLC.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro.

03:02 - What helped Sir John Templeton think independently and have the courage to stray from the crowd.

10:01 - Sir John’s lessons living through the Great Depression.

15:24 - How Scott works to teach his children the values around money that Templeton embodied.

22:20 - The investment lessons that Scott learned from studying the career of Templeton.

35:09 - The three ways to generate excess returns in the markets.

43:48 - How Scott’s fund capitalized on the market panic in March 2020.

49:25 - Areas of the market Scott deems to be significantly undervalued.

56:30 - Why US investors should consider diversifying away from the dollar.

56:48 - Scott’s current thoughts on investing in China.

01:10:27 - How Scott thinks about shorting the occasional bubble in the market.

01:18:21 - Scott’s thoughts on continuing to be optimistic about the future.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Check out Templeton & Phillips Capital Management.
Scott’s books: Investing the Templeton Way, The Templeton Touch, & Buying at the Point of Maximum Pessimism.
Sir John Templeton’s book: The Templeton Plan.
Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
Related Episode:TIP585: Concentrated Value Investing w/ Shree Viswanathan or watch the video.
Check out all the books mentioned and discussed in our podcast episodes here.

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