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Mobius Remembers Templeton on His 100th

Friday, 30 Nov 2012 11:06 AM

Investors today need to be both frugal and humble like the late pioneer Sir John Templeton, who would have turned 100 this week, said Mark Mobius, executive chairman at Templeton Asset Management’s Emerging Markets Group.

“I learned many things from the late Sir John, but I think the most important was humility. He always said that we have to be humble, because without humility we won’t be able to learn and adapt to changing environments. And he didn’t just talk about those things, he really led by example,” Mobius writes in a note on the firm’s website.

Templeton was known for his frugality, too, another trait of a good manager.

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“One of the things that I always found most interesting about Sir John was that even though he was a wealthy man, he lived and worked very simply. He didn’t spend a lot of money, and he abhorred waste,” Templeton wrote.

“For example, rather than discard note paper that had been used, he would cut it up and use the opposite side instead of purchasing new notepads. He was thinking green before recycling became widespread!”

Templeton was frugal with office space as well, Mobius remembers, pointing out the Templeton office years ago was located in the attic of a small shopping center.

“I remember some Japanese investors came to meet with Sir John and they were shocked that, given the amount of money he was managing, he worked in such a modest office,” Mobius recounts.

Templeton Emerging Markets Group is now 25 years old, and today, Mobius is considered a guru when it comes to investing in emerging markets.

In a previous note, Mobius points out that emerging markets today are better prepared to handle shockwaves from events taking place in the industrialized world.

Take the U.S. fiscal cliff, the one-two punch of tax hikes and spending cuts due to take effect at the same time at the end of this year.

The nonpartisan Congressional Budget Office has said failure on the part of Congress to steer the economy away from the fiscal cliff could contract the economy by 0.5 percent in 2013, which would technically constitute a recession.

A congressional deal on tax and spending reforms that avoids recession could still dampen growth next year if taxes go up in select portions of the economy as opposed to an across-the-board fashion, which could crimp imports from many emerging markets.

Still, the nature of the global economy is different today, Mobius points out.

“Dependence on exports to the U.S. has generally been declining in Asia and the emerging countries over the past decade,” Mobius wrote recently.

“The absolute dollar figures for total exports have been rising, but emerging market countries have been diversifying their export base to include countries beyond the U.S. and Europe, the latter of which, as we know, has been suffering from a debt crisis of its own.”

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