Mukherjea framed his argument around a simple behavioural flaw: that investors are wired to repeat past successes rather than seek balance. “Our brain’s craving for dopamine makes diversification really hard,” he said, noting that investors who profit from a familiar asset often struggle to deploy capital into uncorrelated ones. That instinct, he argued, has been elevated into doctrine, celebrated as “sticking to your circle of competence” or, in its retail form, “home country” bias.
Against that backdrop, Mukherjea traced the origins of a truly global investing mindset to Sir John Templeton (1912–2008), whom he described as “the first investor to invest globally on a serious scale.” Long before diversification became academic orthodoxy, Templeton was deploying capital across continents, decades ahead of modern portfolio theory.
A career built on looking elsewhere
Born in a small town in Tennessee during the early 20th century, Templeton’s formative years were shaped by scarcity and self-reliance. According to a profile cited by Mukherjea, he worked his way through Yale during the Depression, partly funding his education through poker winnings, before earning a Rhodes scholarship to Oxford. Extensive travel followed, an experience Mukherjea argued proved critical in shaping Templeton’s global worldview.
When Templeton began his career as an investment adviser in New York in 1937, he saw a gap others ignored. “I couldn’t find any counsellor who specialised in helping people invest outside America. So I saw a wide-open opportunity,” Templeton said of his early years.
That outlook defined his most famous early decision. In September 1939, as war broke out in Europe and markets collapsed, Templeton borrowed $10,000 to buy 100 shares each in 104 US-listed companies trading at $1 or less, including dozens in bankruptcy. All but four eventually made a profit. He later explained the logic succinctly: “During war, everything that was in surplus, and therefore unprofitable, becomes scarce and profitable.”
Templeton would later distil that philosophy with characteristic bluntness: “When people are desperately trying to sell, help them and buy. When people are enthusiastically trying to buy, help them and sell.”
Five principles that defined Templeton
Drawing on books and historical accounts, Mukherjea outlined five principles that, in his view, defined Templeton’s success. The first was global diversification. Well before Harry Markowitz formalised the benefits of diversification, Templeton was allocating capital across countries with low correlation to each other. His flagship Templeton Growth Fund, launched in 1954, would go on to outperform a global stock index by an average of three percentage points a year over his career, according to material cited by Mukherjea.
Second was contrarian investing, buying at “points of maximum pessimism.” Templeton invested in European companies during the darkest days of World War II and was among the earliest American investors in post-war Japan, later rotating out as valuations became stretched.
The third pillar was classical value investing. Despite the “growth” label, Templeton avoided stocks he considered expensive, defining that as a five-year forward price-to-earnings ratio above roughly 12–14 times. He held undervalued companies until they approached fair value, viewing ownership beyond that point as speculation rather than investing.
Fourth came emotional discipline. By maintaining a stable life outside markets and relying on quantitative signals developed as early as the late 1930s, Templeton avoided the anxiety that drives poor timing. Those signals, Mukherjea noted, helped him exit technology stocks before the dotcom bubble burst.
Finally, Templeton placed deep faith in historical patterns. He warned against assuming that current conditions were fundamentally different from the past, arguing that markets repeatedly punish that belief.
Relevance for investors today
Mukherjea argued that Templeton’s philosophy remains particularly relevant for Indian investors. A portfolio tilted towards the United States, he said, is “NOT a country pick” but exposure to the world’s most consistent sources of corporate profits and innovation, including artificial intelligence, cloud computing and semiconductors.
For Mukherjea, the enduring lesson from Templeton is not tactical but behavioural. Diversification, contrarianism and discipline rarely feel rewarding in the moment. History suggests they are rewarded over time.
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