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.
Similarly, Sir John utilized the Golden Rule as a guide to investing and life—he even wrote books about it. I can hear you protesting that the Golden Rule has had nothing to do with Wall Street and corporate America lately. Indeed, it has been the fad in business schools to preach the concept of “shareholder maximization,” or taking the greatest care of the shareholder without consideration of “stakeholders,” or employees, customers, future generations, and so on. Even Jack Welch, once considered a high priest of that concept, recently deemed shareholder maximization one of the “dumbest” business ideas ever.
Sir John actually told business educators that many years ago when he said: “My advice to a school of business management is to teach the businessperson to give unlimited love and he or she will be more successful.” Sir John saw unlimited love as an element of the Golden Rule. Sir John certainly took care of his shareholders. And he certainly did well for the foundations he funded.
Yet the paradox was that his financial success was an indirect reward of his ethic of seeing how his investments related to others, particularly “the least of these” in developing countries. John’s business as the dean of global investing was established as he believed developed nations have a moral responsibility to invest in developing nations.
He made it a practice to avoid speculation, holding his stocks five times longer than the typical mutual fund manager even back then and avoiding financing companies engaged in the production of potentially harmful products he wouldn’t consume himself. Contrary to most financial practitioners, Sir John always maintained the ethic of being “client and other focused” rather than self-centered, and it actually enhanced his returns. Sure, he may have missed a winner or two each year. But he thought the discipline demanded by the ethic would prove rewarding overall and over the long term. Who can argue with his track record?
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.