Piedmont Street Management: Registered Investment Adviser
85 Piedmont Street
San Francisco, CA 94117
(415) 731-2944
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Tough Times Build Character

The cliche is true: Tough times build character. The best thing that ever happened to me was when the Great Depression hit, and my father couldn't give me one more dollar for college. In order to return to school, I had to learn to be self-reliant, resourceful, and diligent. I took several jobs -- the most lucrative of which was playing poker with rich boys -- and I was able to pay my college expenses. When dealt a bad hand, you learn to play smarter.

Given the changing economy, many young investors today are probably looking at their first bad hand. The smart players will learn from history. The wildly insane Internet bubble wasn't so different from previous bubbles that I've studied in my 88 years. In almost every case, within a year after the bubble burst, people were eager to buy again. Invariably, it was too soon. Think about the great stock-market collapse of 1929. After a few months, stocks began to climb, and people jumped in again, thinking the downturn was over. But it lasted for three years. You'd be surprised how low the market can go and how long it can take to recover. If you had bought on the top day in 1929, you wouldn't have seen a net profit for 17 years. The lesson? Don't buy too soon.

Investment advice aside, I'm a big believer that those who do good do well -- in any economy. Simply put, the storekeeper who offers low prices and top quality will draw more customers and beat his competitors. The employer who focuses on giving employees better opportunities and benefits will attract and retain talent. If you're genuinely enthusiastic about helping people, you'll rise above these difficult times -- and be better off for it.

-- Sir John Marks Templeton
Chairman of the John Templeton Foundation
Founder of the Templeton Growth Fund
Nassau, Bahamas
Quoted in Fast Company Magazine, May, 2001


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