In as series of two posts, Gary Moore reflects on the religious perspective John Templeton brought to the investing world and how it shaped his investing decisions.
Sir John Templeton thought that belief was crucial to his success as a money manager, businessman, father, and so on. Thirty years ago, in its November 27, 1978 issue, Forbes magazine shared this quote: “Religious views are important to whatever anyone does—investing, writing articles, anything. How you see yourself in relation to yourself and others and your Creator, why, it’s the most important thing there is because you think most clearly if you are at peace with yourself and your Creator” (emphasis his).
Things seem to fall in a natural order once you answer that really big question for yourself, regardless of what you do. For example, consider the field of investment management, in which both Sir John and I practiced. Considering the current state of Wall Street, one might assume one’s relation to the Creator and others has been totally irrelevant during recent years. Nothing could be further from the truth.
For example, it has been fashionable in even our most prominent business schools the past thirty years to teach that markets are rational. Yet I know of no religion that has taught humankind is rational with money. Some actually teach that humankind grows its greatest distance from the rational mind when dealing with the stuff; Mammon, filthy lucre and all that.
So after the Bible, the first book Sir John suggested we all read was: Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay. Sir John even had Templeton Press print a special edition of it. As you can guess from the title, it’s not required reading for professors who teach that investors and businesspeople are “rational pursuers of self-interest” and the “efficient market hypothesis.”
Understanding that reality about human nature helped Sir John avoid the mania for Internet stocks at the turn of the century. Despite investors having more financial education, media information, and research tools available than at any time in history, Sir John thought that was the single greatest bubble of irrational behavior in the history of markets. In short, Sir John’s religious instincts, honed to razor-sharpness during his youth, told him investors are not angels, much less the rational mind.
We will continue Gary Moore’s reflections in our next post.
Gary Moore was a senior vice president of Paine Webber before starting his own investment practice. He has written five book about spirituality and wealth management, including Spiritual Investments and Faithful Finances 101 (Templeton Press). He lives in Sarasota, Florida.