Scouring the world for cheap stocks | The Edge Markets

Scouring the world for cheap stocks | The Edge Markets: "“Buying energy stocks today when everybody dislikes them… that is Templeton’s philosophy. Similarly, we bought European financial stocks in 2012. [At the time, European banks were trading at distressed levels on the back of the European debt crisis, which threatened to break up the eurozone.] That was a ‘buy when there is blood on the streets’ situation. That paid off but it took a while to work,” says Boersma, who likes the European equity markets where he still sees good stock-picking opportunities."

 His most famous bargain-hunting feat was in 1939, when he invested US$100 in every stock in the New York Stock Exchange that was trading for less than one US dollar a share. He made a killing years later when US stocks recovered from the Great Depression.To be successful in value investing, investors need to have patience and discipline in their buy and sell decisions, according to the CIO. “You have to keep your emotions in check. We have a discipline in the way we invest and value companies. Markets are volatile and investors are emotional. Prices tend to move around based on fear and greed. When everything is going well and everybody is making money, investors tend to get greedy. When the world is coming to an end and everybody is worried, people will be fearful. Usually, the reality is somewhere in between those two things, and there is where we see opportunities.” To be sure, value investing has its fair share of criticism, Boersma admits. “You can be way too early selling out on the greedy stuff or buying in on the fearful stuff.” But over the longer term, value investing has stood the test of time in terms of its effectiveness in making money from stocks, he argues. “Through my experience, it has worked over and over again. But you have to be patient.” This means stock investments undertaken by Boersma and his team may take years to pay off. This could be the case for energy stocks.

“When markets undergo a difficult period, staying the course is important. What I would tell my people is to quit looking at the Bloomberg terminals, find a stock that they are really interested to invest in and study it carefully. Focus on that and forget about everything else,” says Boersma, chief investment officer of Templeton Global Equity Group, the valuefocused international equity division of global fund house Franklin Templeton Investments.



“The biggest mistake you can make is being a deer on the road, getting mesmerised by the headlights and doing nothing. There is always going to be some risks and opportunities in global investing. You have to figure out what they are and do something about them as opposed to sitting there, worrying and doing nothing,” adds the 57-year-old Bahamas-based Canadian in an interview with Personal Wealth when he was in town recently.

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