John Templeton’s $22 Billion Secret

Templeton

Simple is Hard

Simple is very difficult regardless of what you want to win at. Health. Marriage. Kids. And simple is especially hard when there is a lot riding on being right. Like if your future economic stability is at risk via your investment portfolio. It’s no wonder people often make bad decisions at the very moment their lives need the best decisions made.

Get Good at What Matters Most

Bruce Lee went up against the status quo in a big way. First, he taught “white people” Chinese martial arts. A big no no Bruce. But even bigger Bruce challenged all martial arts. He saw that many of them were only good in certain situations. And most completly failed in real-life situations. 

So Bruce started his own martial art, Jeet Kune Do. The idea behind his approach? Just do what works and keep it simple.

One of Bruce’s most repeated quotes:

I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

Why?

The fighter that gets world-class at only a few moves is dangerous and to be avoided.

90% of Investing is Knowing the Answer to One Question

In the case of investing that “one kick practiced 10,000 times” is knowing whether you should be in or out of the stock market. That’s it. One question. One action. One move. BUT knowing when to make that move is why that one move is often the only investment move to master. 

So how can investors become a “one question master” of investing?

Knowing which side of complexity the investor is investing from is an important nuance that most investors get wrong.

What Side Of Complexity Are You Investing From?

Look at Picasso’s early work and you see a skilled painter but nothing more. There were hundreds maybe even thousands of painters with a similar skill set when he started his career.

There’s no differentiation in his early work. And this makes sense. People start off copying their peers, people mimic others before they find their own look (if they are even able to find their own).

The painting below was painted early in Picasso’s career. Would you have said, Picasso painted that? Most wouldn’t. It’s clearly an impressionist’s work but Picasso? Come on.

And then Picasso’s career made the move few artists (investors) are able to make. There’s this point where Picasso passes through complexity and gets to the other side of it. And then, and only then do you see Picasso. The paintings you know as Picasso.

Simple is only found on the other side of complexity.

Picasso got to the other side of complexity. He figured it out. And people realized it. That’s why his paintings often sell in the tens or hundreds of millions. He got to the other side of complexity and the world rewarded him for it. The world always rewards people who make it to the other side.

Below is a painting much later in Picasso life. Now, that’s a Picasso.

Van Gogh Found Simplicity Too

The same thing for Van Gogh. You look at his early work and it’s like every other painter during that time. It’s beautiful and difficult and most people couldn’t do it. But there were hundreds or thousands of people who could. Again there was no differentiation between his early work and anyone else’s.

You can see what I mean by looking at one of his first public works. Good painting. I couldn’t do it. But nothing stands out. He wasn’t “Van Gogh” yet. 

But then he figured it out. He passed through complexity and found simplicity. And then… VAN GOGH!

The work below is one of the most famous paintings in the world. Starry Night was a painting he completed within a year of his death. Van Gogh was powerfully simple. 

John Templeton Figured It Out Too.

When Sir John died he was worth $22 Billion. He figured out what to do. He figured out early in his career that he couldn’t “pull the trigger.” So what did he do? Shame himself. No. Go to a decade of Tony Robbins Seminars? No. Give up? No.

He recognized who he was. Who he really was. He was just like Bruce Lee, or Van Gogh or Picasso and passed through complexity. He found himself. A guy that could create a great investment strategy – not that big of deal. A guy that can create a powerfully simple investment strategy and implement it? That’s power. 

I was talking to client about how the brilliance of John Templeton wasn’t that he came up with his investment strategy but his brilliance was noticing that he wasn’t going to be able to implement it. Brilliant. So what did he do? Quite. No, he literally taught a “kid” in his twenties to implement his system for him.

Most Men Shame Themselves But Not John, Bruce, Pablo or Vincent

Why is simple so powerful?

Because it’s easy for men to make excuses when the approach is complicated. “Oh, I don’t have time/skill/ability/fill in the blank,” the male investor will say.  But when the approach is powerfully simple, it’s hard to hide behind excuse.

And then the growth begins (both money and life).

The powerfully simple approach allows the investor to get clarity, consistency and stability. You get it? 

Investor’s Brains Don’t Handle Uncertainty Well

And that’s why I rail against the pick of the month newsletter industry. They give the investor 30 or 40 ticker symbols to invest in, and THEN they give a new one each week/month to trade in or out of. All to create what… growth? But its not. It’s creating uncertainty for these investors. 

Science is very clear that a human can only handle seven conscious things at once plus or minus 2.

AND when that conscious brain is under stress then that human cannot handle 7 things (investments) at once plus or minus two. That brain can probably handle one… and maybe not even one. Now image if the investor’s brain was under real stress? Like the market falling hard with that person’s life savings on the line. In that case, the only chance of something working for that person is a powerfully simple investment approach.   

Again, an investor’s brain cannot handle 30 to 40 ticker symbols whether or not the “sky is falling.” Not going to happen.

The brilliance of Bruce Lee, Pablo Picasso, Vincent Van Gogh and John Templeton was their ability to be powerfully simple.

Do you get it?

Powerfully simple actually looks different.

Go back and look at the before and after of each painter. They don’t even look like they came from the same guy in the same century.

Powerfully simple is clear when you see it or hear it.

In Your Corner,

RCPeck-Dig Signature.JPG     
RC Peck, CFP

 

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