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OBITUARIES : John Marks Templeton, 1912 - 2008

Investment pioneer funded spiritual efforts

July 09, 2008|Josh Friedman | Times Staff Writer

John Marks Templeton, a pioneer in the investment industry and a champion of spiritual research who founded the annual Templeton Prize, died Tuesday of pneumonia at a hospital in Nassau, the Bahamas. He was 95.

Templeton created one of the first internationally diversified mutual funds in 1954, when most U.S. investors were reluctant to put money in foreign stocks, and became a billionaire. He devoted his latter years to philanthropy and the promotion of religion. In 1999, Money magazine described Templeton as "arguably the greatest global stock picker of the century."

He launched the annual Templeton Prize -- first given to Mother Teresa of Calcutta in 1973 and later to the Rev. Billy Graham and Soviet dissident and writer Alexander I. Solzhenitsyn -- with a guarantee that the award, now worth $1.6 million, would always surpass the Nobel Prizes in monetary value. According to the Templeton Prize website, the award's purpose is to honor "a living person who has made an exceptional contribution to affirming life's spiritual dimension."

In 1987, Templeton established the John Templeton Foundation, which hands out about $70 million a year to support academic research into the universe's "big questions."

The Tennessee-born Templeton, who took British citizenship after moving to the Bahamas in 1963 and was later knighted by Queen Elizabeth II for his charitable works, "was a man of principle, determination, intelligence and wisdom," said Charlie Johnson, chairman of investment management firm Franklin Resources Inc., which bought Templeton Mutual Funds in 1992 for $440 million. "His brilliance as an investor was second to none."

Born Nov. 29, 1912, in Winchester, Tenn., Templeton graduated from Yale University in 1934 and won a Rhodes Scholarship to attend Oxford University, where he earned a master's degree in law. He returned to the United States in 1937, taking a job on Wall Street. Two years later, the 27-year-old Templeton borrowed $10,000 to buy stock in 104 companies that were all trading for less than $1 a share. When he sold the stocks five years later, he had a profit in 100 of the 104 companies.

He started a small investment advisory firm in 1940. He launched the Templeton Growth Fund in 1954, seeing international stocks as both a tool for portfolio diversification and an opportunity to find overlooked bargains: companies trading at discounts to their assets or earnings potential. It was one of the first mutual funds focusing on companies generating most of their income outside the U.S.

"People today are investing abroad like never before, and they are much better off for it, but it's been a long climb since he opened that fund," said Russel Kinnel, director of mutual fund research at investment advisory firm Morningstar Inc.

Templeton, known as a patient and disciplined investor who consistently worked against conventional wisdom, was a strict adherent to the buy-low, sell-high philosophy. He was among the first foreigners to see the potential of Japanese stocks in the late 1950s and '60s, when they were largely ignored even as the country was emerging as an exporter of high-quality industrial goods.

"Some people buy out-of-favor stocks. He became extremely rich by buying [in] an out-of-favor country," said Paul Merriman, editor of the FundAdvice.com website.

Templeton sold those positions before the Japanese bubble burst in the late 1980s. His flagship fund grew at an annualized rate of about 15% through his retirement in 1992 -- considered one of the best long-term records on Wall Street.

After selling his family of mutual funds to Franklin, Templeton devoted his full attention to his philanthropic activities, saying he hoped to help build the world's "spiritual wealth."

"We are trying to persuade people that no human has yet grasped 1% of what can be known about spiritual realities," he told Financial Intelligence Report. "So we are encouraging people to start using the same methods of science that have been so productive in other areas."

Although he lived in the Bahamas, he was known for his thrifty lifestyle and often noted that he was content to fly coach and drive his own car.

In 2007, Time magazine named Templeton one of its "100 Most Influential People" under the heading of "power givers."

Even so, the Templeton charities have engendered controversy over the years for their support of research into such topics as character development, forgiveness, free enterprise and the role of prayer in medical healing.

Detractors have argued that the grants back flimsy science aimed at promoting religion and right-wing causes. The online magazine Slate called Templeton "a conservative sugar daddy" whose ultimate goal was "the reunification of science and religion."

He is survived by two sons, a stepdaughter, three grandchildren and three great-grandchildren.

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josh.friedman@latimes.com

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