Maximum Pessimism — The Point of Greatest Opportunity

John Templeton famously declared: "Bull markets are born on pessimism, grown on scepticism, mature on optimism, and die on euphoria." He built his fortune by identifying exactly when pessimism had reached its maximum point — and having the conviction to buy aggressively when others refused to look.

Why This Matters

John Templeton pioneered global contrarian investing from the 1950s onward, becoming one of the most respected practitioners of the 20th century. His defining investment philosophy was simple in articulation and extraordinarily difficult in execution: the best time to buy any asset is when the largest number of people want nothing to do with it. His most famous early demonstration came at the outbreak of World War II in 1939. While most investors viewed European stocks as catastrophically risky, Templeton bought 100 shares of every stock trading below $1 per share on the New York Stock Exchange — 104 companies in total — with borrowed money. His reasoning was that of the 104 companies, enough would survive the war and recover to make the basket profitable. He was right: 100 of the 104 positions made money, and the overall basket appreciated dramatically.