What kind of investors will not miss this wave of rising market and have frequent 'magic hands' in long-term investments?

John Templeton is hailed by the media as one of the greatest stock investors of the 20th century. In September 1939, he caught the bottom of the US stocks and made three times the profit in the following four years. If an investor invested 0.01 million USD when Templeton founded the fund in 1954, it could grow to 2 million USD by the time of Templeton's retirement in 1992, with an annualized return of 14.5%, outperforming the market by an average of 3.7%.

Warren Buffett, in summarizing his investment experience, said that the main components of luck are hard work and careful planning, in addition to common sense and imagination. Luck belongs to those who "work one more minute". Luck means that you face hardships and difficulties without hesitation, meaning that you work hard into the late night, and also means that you never break an appointment or miss a train.

Create your own good luck

In September 1939, Templeton caught the bottom of the US stocks. At that time, the stock prices of more than 100 companies on the New York and other US stock exchanges fell below 1 USD. The then 26-year-old Templeton borrowed 0.01 million USD from his boss and bought 100 USD worth of each stock.

About four years later, Templeton sold all the stocks, and the initial 0.01 million USD capital appreciated to 0.04 million USD.

However, this will be attributed to luck by most people. In fact, Dunton's bold moves stem from his hard work and careful planning.

As early as two years ago, Dunton had conducted a comprehensive analysis and research on stocks priced below $1. He found that as long as the performance of these companies remained stable compared to the past, the likelihood of loss was not significant. Secondly, he also noticed that demand for various commodities was very strong during wartime, allowing even inefficient companies to profit. Although the USA had not yet entered the war, it was believed that the USA would support the Allies and might indirectly enter the war for a quick and decisive victory.

Dunton said: "Many people think that good luck is entirely determined by tossing a coin. Of course, everything is related to opportunities, but good luck always comes when you work hard. Without sufficient preparation and hard work, luck is just a word without practical meaning."

In fact, luck is created by all possible choices. Always be prepared, ensure that your homework is done, ensure that the results are worth your effort, only then will you have the opportunity to become the luckiest one.

Put in one more effort.

Dunton found that there was little difference in the sweat shed between someone with slight achievements and someone with remarkable achievements. Both put in almost the same level of effort, with the only distinction being the latter putting in "a little bit more." However, the results and quality of achievements were significantly different.

As an investment advisor, Dunton found that by searching through thousands of companies, he could identify the lowest cost producers for each commodity. This is a worthwhile task. To find the most successful investment projects, you must research and analyze the available information. Without data collection, you cannot make accurate assessments, understand which companies will thrive, which companies can safely navigate economic downturns, and which companies can provide high-quality products. To obtain this type of information, you must adhere to the belief of putting in one more effort and combine it with careful advance planning.

In order to establish and promote the work attitude of putting in one more effort, Dunton paid his employees' salaries more than 20% above the industry average over a period of more than 30 years. Dunton definitively pointed out that this was not out of charity. He believed that as long as salaries were 20% above the normal level, you could gradually build an outstanding team. Spending an extra 20% of money, team efficiency will be 50% higher.

Being thrifty and waiting for the best investment opportunity.

Dunton likes to quote Dickens on the viewpoint of thriftiness: 'Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds six pence, result misery.'

After the economic crisis in 1929, thriftiness became a matter of life and death. The life in the 1930s fully confirmed one thing: to survive and prosper, it is necessary to save and invest wisely. Saving funds for optimal investment is the foundation for success and security.

Back then, Dunton and his wife always insisted on saving 50% of their income, which was not an easy task, requiring willpower, perseverance, and a sense of responsibility for the future, qualities necessary for success.

Dunton learned a lot about saving money from farmers when he was young. He observed them carefully. Most people in dire straits were burdened with debt, while worry-free individuals had no debt. During prolonged economic downturns, debt-free farmers could reduce their expenses, relying on their farms to make a living without the fear of losing their land. However, those in debt found their debts soaring, and many ended up using their land to clear the debt, losing their land and even their place to live.

The principles Dunton learned from Tennessee farmers also apply to the stock market. Many people bought stocks on margin, and when stock prices fell, they didn't have extra funds to cover the margin, forcing stockbrokers to liquidate. Those without debt who refused to buy stocks on margin could weather the economic downturn unscathed, avoiding long-term damage. This once again shows that thriftiness is the antidote to adversity, paving the way for success.

Dunton's lessons on the correct and incorrect use of money did not solely come from the most basic economic activities. He also studied the lives of figures such as Benjamin Franklin and John D. Rockefeller. Rockefeller's quote about wealth deeply resonated with Dunton: 'To be a real billionaire, you must make money work for you. Compared to making money on its own, personal earnings are minuscule.'

"Do not borrow or lend money to others. When you lend, you often lose both money and friend; borrowing can make you forget about thriftiness." Shakespeare's words were of great significance to Dunton, and he always followed these principles. Through observation and learning, Dunton achieved great success both materially and intellectually.

In summary, Dunton attributes his long-term outstanding success to 'belief', successful investment is a product of one's life and the overall relationship with the universe, virtues such as diligence, hard work, willingness to give, and optimism are the keys to investment success.

(This excerpt is from 'Dunton's Golden Rule', Author: John Max Dunton, Translators: James Allison, Ying Shaoquan, Su Zhimin, etc.)

Editor/Somer