Okay, so how is the current bear market an opportunity, especially for our China Stock Digest subscribers? Well, we have to carefully analyze the investment opportunities and then selectively make investments that we believe are poised for a turnaround. Eventually, this stock market should reverse course and start a new bull market and we’ll try to take advantage of that.

SIR JOHN TEMPLETON, ONE OF THE GREATEST INVESTORS OF ALL TIME, and later in his life, a generous philanthropist, passed away last week at the age of 95. In honor of his passing, here are a few of his investing insights that we’ll remember long after he’s gone:

• Be a contrarian. In a 1995 Forbes interview, Templeton said, “People are always asking me where the outlook is good, but that’s the wrong question. The right question is: ‘Where is the outlook most miserable?’” He was a firm believer in investing at the point of “maximum pessimism.” An avowed value investor, Templeton liked to buy when everybody else was selling and sell when everybody else was buying. It was his way of “buying low and selling high.”
• Don’t be afraid of big bets. When he felt confident, Templeton was not afraid to put a significant amount of his money in one area. For example, back in the 1960s, he was highly concentrated in Japanese companies because he felt they were extremely cheap. Of course, big bets can turn into big risks if you make a bad decision. Fortunately, for Templeton, his bad bets were few and far between. By buying stocks that were low priced and out of favor, he had a built-in “margin of safety.”
• Don’t worry about the direction of the stock markets. According to a 1978 Forbes cover story, Templeton said, “I never ask if the stock market is going to go up or down because I don’t know, and besides it doesn’t matter. I search nation after nation for stocks, asking: ‘Where is the one that is lowest-priced in relation to what I believe it is worth?’ Forty years of experience have taught me you can make money without ever knowing which way the market is going.” For Templeton, it all boiled down to finding stocks that had value and could go up regardless of what is happening to the broad stock market.
• Remain humble. From humble roots, Templeton never let success go to his head. He said, “An investor who has all the answers doesn’t even understand all the questions. The wise investor recognizes that success is a process of continually seeking answers to new questions.” We’ll never bat 1,000%–nor do we have to. We do our best and then try to learn from our mistakes.
  • Don’t panic or be too negative. Templeton’s advice here is quite timely (especially to our China Stock Digest subscribers). He said, “There will, of course, be corrections, perhaps even crashes. But over time our studies indicate, stocks do go up and up. In this century or the next, it’s ‘buy low, sell high.’”

AND THE MOST IMPORTANT ONE OF ALL:

Like wise grandparents, we can learn from our elders. Templeton is certainly one of the all-time greats and his words are worth listening to.